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  • Writer's pictureKevin Peterson

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

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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.


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Executive Summary


Finally, the HOT summer seller's market is starting to cool off. There is slightly more inventory and less buyers which is resulting in less competition over the last couple of weeks. Average days on market as a result has also gone up and the percent over asking is coming down. Single family homes month over month sales prices held constant while condos (3+ bedrooms) saw a dramatic increase.


Key take aways ....

  • LESS SOLD - Just like last month, inventory is ticking up yet unlike last month, slightly less properties have actually sold (3,253 in Aug vs. 3,152 in Sep)

  • Days on market (DOM) UP - This metric crept up again despite sales prices going over with fewer multiple offers. Condos have less demand than single family homes.

  • Interest rates climbed aggressively all month to a 23 YEAR HIGH, 7.55%.

  • Price per square foot - Most homes below $3M list price saw month over month price increases. Townhouses saw a drop in price per square foot month over month.

  • What sold the most over asking? San Francisco single family homes listed between $2.3-2.8M sold at the highest percent over asking (121%).

  • What is taking the longest to sell? San Francisco condos and townhouses had the longest days on market.What could we see in October through February? 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:


 

PROBATE SALES


What is a probate sale?

Probate is a court-supervised process that serves several critical purposes but in the context of real estate, probate ensures a seamless transfer of property ownership with a clean title.


How does it work?

The person responsible for overseeing the probate process is known as the estate representative (ER) who can be an executor (if the decedent had a will) or an administrator. The ER ensures the home sale is advertised in local newspapers, and a public confirmation hearing is scheduled thirty days later.


At the confirmation hearing, typically ten to fifteen minutes total, the judge takes center stage to announce the purchase price. But here's where it gets interesting: the floor is open for any member of the public to swoop in with an overbid for the property.


Who is the ideal buyer?

While probate sales may not be suitable for every buyer, they offer unique opportunities, particularly for investors and contractors willing to perform due diligence in advance. If an overbid is successful, the original purchaser receives a refund of their deposit, ensuring minimal risk.


For more details, check out my full blog post on Probate Sales here.

 


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 -

  • Single Family Homes - Record low inventory. Sales volumes were lower in January 2023, but we are trending to be lower come this winter.

  • Condos - Inventory is starting to build.



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. Where did we end up in September?


Both condos and single family homes are ticking upward, which means less buyers are now in the market, but nothing like the 2008-2009 Great Financial Crisis.



% Over Asking vs. DOM -

Demand is still strong yet rising interest rates this last month started cooling off the market. Homes are still going over asking price but the percentage is declining (105%) while the average days on market are increasing (21 days). Luxury end condos, single family homes, and townhouses saw more days on market than last month.


The biggest drop below asking? San Francisco single family homes between $3.8M-$4.8M at 90% of asking.


The longest on market? Santa Clara homes over $5.3M sat for an average of 124 days before going into contract.



Sales Price -

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



If you are looking for your specific home value, please schedule a free consultation with me.


 

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 August ...

  • Price per square foot increased across all counties, except for Mid-Peninsula condos, Contra Costa townhouses, and San Mateo townhouses.

  • Days On Market - San Francisco, Alameda, and Contra Costa markets on average became shorter, i.e. became even hotter seller markets.


Here are the pending details for those interested.


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 has been dragged down due to mortgage rates. Year to date, early July 2023 had seen the most mortgage pain but then came August at 7.40% for the 30-year fixed mortgage then September at 7.55%.

  • August saw weakening in the stock market and September continued that trend of weakening. Yet despite this, the tech sector remains stronger than the broader economy.

  • When will the next Recession occur? Check out last month's infographics 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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