San Francisco Bay Area housing market showed further signs of recovery in the third quarter behind strong demand for homes and an acute shortage of inventory that may present a window of opportunity for potential home sellers if it continues, according to an analysis of MLS data by the research division of Better Homes and Gardens Mason-McDuffie Real Estate.
Across the nine-county Bay Area, 14,340 existing, single-family detached homes changed hands during the third quarter, up 2 percent from 14,044 homes sold in the third quarter of 2011 but down 7 percent from this year’s second quarter, when 15,540 homes were sold. All nine Bay Area counties experienced slower sales compared with the second quarter, but six of nine reported higher sales on an annualized basis.
A shrinking inventory of homes on the market was behind the softer-than-anticipated sales figures. How severe is the shortage? On the final day of last year’s third quarter, 18,343 homes were listed for sale in Bay Area counties. On the same day this year, only 6,334 existing detached homes were available for purchase – a 65 percent difference.
The listings shortfall also helped reduce the average time it took to sell a home in the third quarter. For the Bay Area as a whole, homes were on the market an average of 61 days, down from 63 days a year ago. On a countywide basis, average days on market ranged from a low of 34 days in Santa Clara County to a high of 109 days in Napa County.
Although multiple offers remained commonplace due to the lack of available homes, the median sales price of a Bay Area home declined slightly from $577,546 in the second quarter to $577,358 in the third quarter. Even so, the third quarter figure was up a healthy 15 percent from $501,008 a year ago – welcome news for homeowners watching for signs of a healthier real estate market.
Locally, six counties recorded higher home prices on a quarterly basis while all but Marin County experienced higher sales prices compared with a year ago. Napa County set the pace with a 21 percent year-over-year increase in the median price of a home sold during the third quarter, followed by Contra Costa and San Mateo counties (+17 percent) and Alameda and Santa Clara counties (+16 percent).
Observers are optimistic that the third quarter figures are a clear sign that the Bay Area real estate market is on the mend but cautioned there are likely to be ups and downs along the way. With fewer homes on the market, homeowners with equity who have been waiting for signs that home prices are on the rise may find a window of opportunity to sell if their home is in a high-demand location, in excellent condition and competitively priced. An experienced REALTOR® can help evaluate local-market opportunities.
According to Rich Casto, San Francisco Manager, Better Homes and Gardens Mason-McDuffie, “With no signs that the inventory shortage will be relieved anytime soon, traditional homebuyers with lender financing are likely to continue to face competition from investors with cash and the flexibility to offer a higher price.” As is the case with potential home sellers, buyers are well-advised to seek the counsel and assistance of a local REALTOR® experienced in navigating the ins-and-outs of a home purchase in a competitive market.
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