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  • Writer's pictureKevin Peterson

January 31st: Real Estate Trends In The SF Bay Area

Updated: Feb 2


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  3. I make calls and knock on doors weekly to find off market properties

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Executive Summary


December home buyers were able to buy some good deals as price per square foot had bottomed and are now increasing again in the January data.


The majority of homes that closed in January were those that hit the market in December. Because of the holidays, days on market elongated. Despite being longer on market, homes still went above list price with the exceptions of condos in San Mateo, San Francisco, and Mid-Peninsula. In general, prices are still above 2019 levels around the SF Bay Area.


The highest volume of homes sold in each property type category (i.e. single family homes, condos, and townhouses) saw modest price per square foot increases, while the lower volume price points saw price per square foot decreases.


This next month we anticipate mortgage rates to stay stable. Demand will remain strong as the tech labor market is stabilizing after 10 years of growing, especially during the COVID pandemic.


KEY TAKE AWAYS....

  • LOWEST SALES IN RECENT HISTORY - January was the 2nd lowest volume of sales on record since before the year 2000 at 1,272. When was the last time it was this low?

    • January of 2023 (FED increased rates at historic speed) =  1,266

    • February of 2008 (Great Recession) = 1,743

  • 30 year mortgage rates held stable month-over-month around 6.7%.

  • What sold the most over asking? In terms of price points, the Mid Peninsula homes sold the most over asking at 115%, specifically at the $800K - $1.3M price range. The next highest over asking was 108%, for a single family homes between that same price point ($800K - $1.3M).

  • What is taking the longest to sell? San Francisco condos and Mid-Peninsula condos at roughly 51-53 days.

  • What is happening to sales prices? In general, prices are above 2019.

  • Is now a good time to sell or buy?

    • Sellers still have very little competition and can expect multiple offers for well priced homes. Now is a great time to test the market with an "Off Market" listing before the Spring hits. This strategy keeps your Days On Market (DOM) low while you test what buyers like.

    • Buyers are starting to get back to their home searches after the holidays, heating up competition, but not yet a frenzy.

    • Investors are gobbling up fixer uppers at fairly aggressive sales prices. This will mean the After Repair Values (ARV) will need to be strong in the near term if planning to sell.

    • Check out one of my latest blogs for more prediction on 2024 and 6 key questions to ask


Off Market Properties:

  • San Mateo (4 PLEX) Two 1 bedrooms, two studios

  • Santa Cruz (1622 sqft) 4 bedroom, 5 bath, 1-car garage on oversized lot

  • Belmont / Redwood Shores (1770 sqft) 3 bedroom, 2 bath townhouse

  • ....

  • Want the full list? Feel free to reach out directly to me (650.451.8763).

 

Table of Contents:


 

How Are The SF Bay Area Real Estate Markets?


Overall, the San Francisco Bay Area real estate markets are maintaining sales prices. Inventory levels are low due to seller's "Golden Handcuffs", aka cheaper mortgages they purchased with or refinanced. This is causing a limited amount of inventory, especially at the lower price points were many investors are also competing with first time home buyers.


San Francisco Bay Area December 2023 real estate trends by sales price per square foot, days on market, and number of pending


SF Bay Area Real Estate Trends - Month over Month (MoM)


The charts below are month-by-month heat maps of pricing in the SF Bay Area. They are grouped by county and property type (Condo, Single Family Home, Townhouse). The metrics are Price Per Square Foot, Days On Market, how many sold, and the List To Sales Price Ratio. Green indicates items keeping prices up in comparison to previous month's metrics. Red indicates the opposite, i.e downward pressure on sales price towards a Buyer's Market.


(Click on each county's data to make larger). Make county / location bigger than MoM.






SF Bay Area Real Estate Trends - Year over Year (YoY)

Here's the data to support the year over year price growth (supply versus demand) we are currently experiencing.



Inventory -

  • Every year we see active and sold inventory go up then down, a predictable cadence. How high or low is dependent on the next metric, Months of Inventory or the rate of change in inventory being sold.



Months of Inventory -

This metric tells us how long it would take to sell all the homes on the market if no new listings were added. Five to six months is considered a balanced market, anything less is a seller's market.


  • As active inventory goes up and the rate of sales goes down, this key performance indicator (KPI) will continue to tick upward. This metric is telling us that there are less buyers for condos right now.




% Over Asking vs. DOM -

Related to Months of Inventory and the rate of change are these next two KPIs - how much over asking a home sold for and how fast it was sold, i.e. Days On Market.


December holidays are now behind us but the data is still showing home sales have not picked up across the SF Bay Area completely, but rather in pockets..




Sales Price -

If you were a buyer in January 2024, you experienced multiple offers on a property and had to go at or slightly above asking to win.



Please reach out to schedule your free consultation to discuss your home price or home search.


 

What's Selling The Most RIGHT Now?


Here are the pending details.


SF Bay Area Real Estate Trends
SF Bay Area Real Estate Trends - Pending volume by Price Range and county

 

FED, Mortgage Rates & The Stock Market

  • FED - THE CME Group revised their prediction to LOWER interest rates in March downward from 75% to 61.5% chance do to inflation popping its head back up.

  • Mortgage rates are holding steady at 6.7% this month.

  • Stock market has been off to a great start with a small pull back in mid-January.

  • Layoffs have tapered down since November but much of tech had been overstaffed so companies have been "righ sizing". Almost 19 of 20 dfferent sectors reported new jobs.

  • When will the next Recession occur? Check out my infographics in this blog post for a brief primer. Then we can discuss the rest over our next coffee.

  • At KPeterson.realty, we know not every lender is created equal and we work with lenders who's rates today are around 6% for 10/1 ARMS. Our lenders also may value your RSUs better than others. Reach out and tap into our network.


SF Bay Area Real Estate Trends - Tech Layoffs by employee count and company count since 2022
 

How We Help Our Buyers

  • We work with the best lenders who are able to beat the current interest rates (some as low as 6% on a 10/1 ARM).

  • Search For Homes by customizing your financial situation before contacting a lender to determine what you can afford.

  • Investing or not sure which areas to look in? Explore Markets to generate reports that analyze a city by days on market, average home price, price per square foot, average number of bedrooms / bathrooms / square feet in YOUR price point.


How We Help Our Sellers

  • We have a $0 down / 0% renovation program in which you don't need to pay back for one year, giving you flexibility on when to sell. The goal is for every $1 spent on renovations to net (on average) a $2 to $4 return on investment. Every family has a unique real estate scenario based on their needs and circumstances. Feel free to schedule a consultation with me today.

  • Click "What's My Home Worth" to find out the rough value of your home and automatically monitor it monthly. It also shows you various options for your equity (refi, home equity line or loan, etc).

  • If you'd like a more specific valuation of your home, give me a call.


Check out our last few or peruse all of them at https://www.kpeterson.realty/blog



SF Bay Area real estate trends - days on market versus sale price to list price ratio - single family homesSF Bay Area real estate trends - KPeterson.realty

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