October 26th: Real Estate Trends In The SF Bay Area
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  • Writer's pictureKevin Peterson
    • Oct 26, 2023
    • 6 min read

October 26th: Real Estate Trends In The SF Bay Area

Updated: Oct 30, 2023


How can I help you?


Please reach out if...

  • You know anyone interested in buying, selling or investing.

  • You want more data regarding your specific market - I'm the data realtor.

  • You have home improvement questions - I'm the home improvement nerd.

  • You are looking for off market properties - I knock on doors weekly.

  • You want to compare interest rates - I love finding the best deals.


Lastly, if you find this newsletter useful, please share with a friend.

 

Executive Summary


Mortgage rates had a brief tumble from our annual highs then soared to new heights not seen since early 2000s. Some saw an opportunity and pounced on the limited inventory, where prices are still sitting above 2020 levels.


Key take aways ....

  • LESS SOLD - Similar to last 2 months, inventory is ticking up yet less properties have actually sold (2,629 in Oct vs 3,152 in Sep)

  • Interest rates declined from prior month's 23 YEAR HIGH of 7.55% in early October. Then rates sprinted even higher to 8.03% by the end of October. This impact both Days on market (DOM) and price per square foot; there was a mix of increases and decreases. Overall, home values held fairly steady

  • What sold the most over asking? A Sunnyvale single family home sold in As-Is condition, was listed at $1.1M. Then it sold 182% over asking (all cash) at a cool $2M.

  • What is taking the longest to sell? San Francisco condos had the longest days on market, especially those between $2.3M to $2.8M.

  • Better buying opportunities this winter? Based on the above metrics, we anticipate a softening in prices this winter. Now could be a great time to be a buyer!


Off Market Properties:

  • San Mateo (2003 sqft) 3 bedroom, 2 bath, 2-car garage in Beresford

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

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

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

 

Table of Contents:


 

SAVE MONEY ON ENERGY


Advantages to energy efficiency in the SF Bay Area?

  • Improve indoor air quality and safety

  • Reduce your energy bill

  • Help the environment


Upgrading appliances or your home?

If you are looking to switch out or upgrade older appliances, make energy efficiency upgrades or repairs to your home, read my article on rebate programs available to you at the federal, state, business level for single family, multi-family, and small to medium businesses.


Where to look for tax savings / incentives?

Check out this website called Switchison.org to find the latest rebates and tax credits from California and Federal along with local service providers like PG&E.


 


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 resulting in potential buyers competing against limited inventory.


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 -

  • Both Single Family Homes and Condos are trending towards a record low inventory sold, similar to January 2023 yet active inventory is ticking upwards due to mortgage interest rates currently at multi-decade highs of 8%.


Months of Inventory -

This metric basically 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) continues to tick upward. This is telling us that there are less buyers now in the market, but nothing like the 2008-2009 Great Financial Crisis.



% Over Asking vs. DOM -

For the first half of October, rates fell. The other half of the month rates grew above September's multi-decade high rates.


  • Single family homes are still going over asking price but the percentage is declining (105%) while the average days on market held steady (21 days). San Mateo luxury homes over $3.8M sat longer with their DOM to between 30-55 days.

  • Most assets are going above asking except for Contra Costa single family homes above $3.3M.


The biggest drop below asking? A condo in San Francisco listed at $1.2M and sold for $815K or 68% of asking.


The longest on market? San Mateo retirement community off of Baldwin Avenue with HOA fees of almost $7K / month. It sold after 883 days on market for $700K (90% of asking).



Sales Price -

For both Condos and Single Family Homes, we are still above 2020 pricing.



Aggregated data at this level is for overall market sentiment so if you are looking for your specific home value, please reach out to schedule your free consultation.


 

What's Selling The Most RIGHT Now?


We evaluated the Mid-Peninsula and five SF Bay Area counties to see what price ranges are moving, what their average price per square foot was, how long they sat on the market, and for those that closed - what percent over or under asking was achieved.


Those that are pending, i.e. just went into contract....


SF Bay Area Counties - Pending Sales for Condos, SFRs, and Townhouses
SF Bay Area Counties - Pending

When compared to September, those who just got into contract saw ...

  • Price per square foot decrease across all counties, except for San Francisco where it saw price increases.

  • Days On Market - Saw many price points take a few days longer than prior month.

  • However, still a hotter seller markets.


Here are the pending details.


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


 

Mortgage Rates & The Stock Market

  • FED is keeping its finger poised on another rate hike before the end of the year due to mixed metrics on inflation but market is anticipating a pause next month and rates to stay higher throughout 2024.

  • Demand in October at first saw the receeding of rates followed by a whiplash of higher rates by the end of the month. Rates maxed out at 8.03%, highest we've seen since the early 2000s.

  • Stock market continues to decline amidst earnings report misses.

  • 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 6.15% for 10/1 ARMS. Our lenders also may value your RSUs better than others. Reach out and tap into our network.


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 6.15% 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

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