Many prospective Bay Area home buyers have had their fingers crossed in hopes that the latest economic concerns would create a dip in real estate prices. If they continue to wait, their fingers might lose circulation.
As a country we’ve experienced two of the worst economic downturns in our history. Between the stock market crash and the closing of businesses due to the shelter in place, there has been a major financial impact to many people. However, in the Bay Area, this has yet to have a real effect on the housing market.
Based on MLS sales data from Bay East Association of Realtors, detached home prices have not seen a decline during this time period. In Many East Bay Area cities, the final sales price of a home has actually INCREASED from the previous month and year over year. Take Oakland for example: the median, average, and price per square foot of detached homes here have steadily increased since January of this year. In the month of April, buyers in Oakland still paid 113% over asking price on average.
The only city to experience a decline in the last 3 consecutive months is Clayton. In February, the median sales price of a detached home was $960k. In March it dropped to $910k and even lower to $890k in April. Average sales prices were at $981k in February, dropped to $936k in March and down to $910k in April.
The only glimpse of hope for prospective buyers is that some cities are experiencing a slight drop in the percentage of the amount paid over asking price. Hayward has dropped from 104.21% in February down to 103.27% in April. Berkeley went from 119.32% in February to 114.88% in April.
On the contrary, the majority of East Bay Area cities are still experiencing an increase of this number. Homes in Concord dropped to 94.84% below the asking price in February, but are now back up to 103.16% over asking in April. Alameda prices were 104.46% above asking price in February and shot up to 109.5% as of April.
At this rate, it doesn’t look like there will be a dip in home prices any time soon. Things can change, but after enduring these latest catastrophic economic events, Bay Area real estate has still been holding firm. There still remains very limited inventory in most markets while there are plenty of eligible buyers. Until this flip flops, or at least nears an equilibrium point, prices will remain as they are or continue to increase.
For some, there is still a strong case to be made for buying a home now. Interest rates are at record lows and the market is stable. Clearly, there are many people that agree and have been active in their pursuit and acquisition of property. If you’re considering purchasing a home, feel free to contact me directly at: LLee@famileerealty.com or (510) 828-2711 for more information on an area you’re interested in. I’d also be happy to share the detailed sales data reports with you.