The Bay Area is and has been one of the hottest real estate markets in the country. The influx of money from the tech industry and the attraction of growth opportunities for many individuals and start up businesses makes the Bay Area a very attractive place to live. The demand for housing has continually exceeded the amount of inventory available, causing a sharp rise in home values that existing home owners love, but new home buyers wish would end. Whichever side you may be on - either an owner or a potential buyer - in some East Bay Area cities, you’re likely going to build some equity at a great rate.
I compiled all of the 2019 MLS sales data from Bay East Association of Realtors for all East Bay Area cities’ detached homes to figure out which of them experienced the highest value growth from the previous year. The results might surprise some. In fact, the average detached home median value in two cities experienced growth of 9% or more. What a great investment!
Atop the list of East Bay Area cities is Lafayette, which saw the average detached home median value increase by 16.59% ($1,659,167) in 2019. The average sales price increased by 10.16% ($1,856,797), however the average price per square foot saw a slight decline to $667, down 3.59% from 2018. If you already own a home in Lafayette, you’ve been a beneficiary of substantial growth for three consecutive years now. As a prospective buyer in Lafayette, you may see slightly lower prices between the months of June though August. Data trends show sold prices to be slightly lower during that time of the year. If you’re looking for a time to negotiate, sold prices between the months of September through December can drop to nearly 2% below the list price on average.
Second on the list is the city of Alameda. The average median sold price of a home here increased by 9.04% ($1,151,167) from the previous year, while the average sold price went up by 6.63% ($1,193,119). Alameda also saw an increase to the average price per square foot of a home by 3.86% ($688), which is $21 more than Lafayette.
If you’re considering buying a home in Alameda, be prepared to pay more than the list price. On average, buyers are paying an extra 9.33% over the home’s original list price, which is also more than 8% higher than buyers in Lafayette. Granted, the average total price of a home in Alameda is considerably less than one in Lafayette by $500k or more. Alameda is one of three East Bay cities that experienced an increase in its median price, average price, price per square foot, and the amount over list price that buyers are paying. The others are Alamo and Berkeley.
Next on the list are the cities of Clayton, San Pablo, and Richmond. Clayton’s average median sales price was up 4.92% ($869,895) in 2019. The average sold price increased 6.78% ($899,237) while the price per square foot dropped 3.13% to $381. Despite the price increases, buyers are paying almost 1.5% less than a homes original list price on average, which is the second lowest rate in the East Bay behind Alamo (-2%).
The cities of San Pablo and Richmond are the most unique ones on the list. Both cities rank top 5 in the East Bay for having the most growth in value, while ranking as the bottom two for both median and average sales price, making them the two most affordable cities in the East Bay. San Pablo’s average median sales price increased by 4.37% in 2019 to $479,397 and its average sale price went up by 4.68% to $491,688. Richmond’s average median sales price rose by 2.48% ($556,292) and the average sales price jumped 4.76% ($594,658). Despite the affordability in these cities, buyers are still paying a slight premium over list price for homes. In Richmond, buyers are paying just over 5% on average while buyers in San Pablo are paying slightly above 2.5% the list price.
2019 was a great year for these East Bay Area cities for growth in value. Other cities that saw positive growth were: Alamo, Berkeley, Castro Valley, Concord, Danville, Oakland, San Lorenzo, San Leandro, and Walnut Creek. However there were actually some cities that experienced a steep decline in home values. Stay tuned for the article on that information, as I will be sharing it soon.
If you would like to learn more about home values in a particular city that you’re interested in, please contact me directly at LLee@famileerealty.com or (510) 828-2711. I’d also be happy to share the detailed reports with you.