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  • Writer's pictureKevin Peterson

June 30th: Real Estate Trends In The SF Bay Area


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  4. Shop interest rates - I love helping my clients save $$$

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Executive Summary

Did everyone go on vacation? With an average of 2.18 million passengers departing SFO every month for the last 12 months....

  • June saw 2.4 million passengers leave,

  • December 2024 (2.5 million) and November 2024 (2.4 million) are the only two other months that saw similar levels.


Despite families going on vacation, the housing market demand remains strong here in the SF Bay Area!! Home prices and list to ask prices cooled off slightly from May while average days on market increased by 1-2 days, month-over-month.


Mortgage rates stayed fairly constant with a slight increase all month. As such, we saw desirable homes receive over 4-6 offers.


KEY TAKE AWAYS....

  • SALES PRICES? Both condos and single family home sales prices are slightly down, month-over-month.

  • SALES VOLUME? Sales peaked in April 2024 and has dropped in May and June, though the number of sales remain significant.

  • MORTGAGE RATES? Mid-May experienced a bottoming of rates around 7% while in June rates stayed consistently around 6.9%.

  • LIST TO ASK PRICE?

    • Sellers have been listing single-family homes and condominiums at higher prices in June compared to May.

    • Sellers have listed townhouses at slightly lower prices in June compared to May.

  • What sold over asking?

    • San Jose sold the most over asking across condos, single family homes, and townhouses.

    • 66% of single family homes sold over asking (compared to 75% in May).

    • How many homes sold over 110%?

      • 9.1 % of condos

      • 29.8% of single family homes

      • 10.9% of townhouses



  • What took the longest to sell? San Francisco single family homes between $3.8M to $4.3M took over 70 days to sell.

  • Is now a good time to sell or buy?

    • For well marketed and well priced homes, expect multiple offers. End of summer many will be back and will be our next best time to sell this year, prior to elections.

    • Buyers are flush with cash and are searching for homes in earnest.

    • Investors are gobbling up fixer uppers at 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 two of my latest blogs for how to sell your home in a high interest rate environment and 6 key questions to ask when selling your home in 2024.


Off Market Properties:

  • San Mateo (Beresford) (2300 sqft) - 4 bedroom, 3 bath, 2-car garage

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

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

  • ....

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

 

Table of Contents:


 

How Are The San Francisco Bay Area Real Estate Markets?


Overall, the latest SF Bay Area real estate trends show the sales prices increasing. Inventory levels are still relatively low due to seller's "Golden Handcuffs", aka cheaper mortgages they purchased or refinanced in the sub 4% levels.


This is causing a limited amount of inventory, especially at the lower price points where many investors are also competing with first time home buyers. The below graphic shows all pending home types and the price levels that sold the most per county highlighted in yellow.


San Francisco Bay Area June 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 highlighted cells indicate items keeping prices up in comparison to previous month's metrics. Red highlighted cells indicate the opposite, i.e downward pressure on sales price which favor Buyers more.


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






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 - 20 Years vs. 10 Years

  • 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.

  • We are starting to increase above historically low inventory levels and Condos active inventory is starting to build up in supply. This volume could affect the rate of price increases as we head into summer.

  • The graphs below show both a 20 year and 10 year time horizon.




Months of Inventory - 20 Years vs. 10 Years

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. In the last 10 years, we mostly been in a Seller's Market except for the 2008 Great Financial Crisis.


  • 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 is more demand for single family homes than condos.

  • Despite the rising inventory, we are clearly in a seller's market for both single family and condos.




% 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.


The strength of the tech industry is impacting the demand, as we anticipated earlier this year.




Sales Price - 20 Years vs. 10 Years

In general, single family home prices have doubled every 10 years in the SF Bay Area since the 1980s. Condos in general have tripled in value since 2012. Due to the local economy of the SF Bay Area, we anticipate these values to remain high, especially as inventory levels are still near historic lows.


Month over month, we are seeing sales prices continue to go up due to the above key metrics.



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

  • Inflation and jobs are still not where the FED wants, resulting in the delay of rate cuts. The CME Group now predicts the FED to LOWER interest rates possibly starting in September but more likely in November 2024.

  • Mortgage rates had a slight downward trend for buyers, from 7.17% to 7.07% for a 30 year fixed mortgage.

  • The S&P500 and most tech stocks had a nice increase throughout June, enabling tech buyers to cash in on stock options.

  • Layoffs are relatively low compared to the last two years.

  • 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 10/6 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
SF Bay Area Real Estate Trends - Unemployment
 

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 10/6 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.




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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