The supply of available homes is shrinking across California, as prices surge and the affordability crisis deepens as a statewide concern.
In August, the median price of a single-family home rose 7.2 percent year-over-year to $565,330 in California, its highest level in a decade. That’s according to the latest report from the California Association of Realtors.
Naturally, the Bay Area gets special mention: Region-wide, prices rose 10.2 percent year-over-year across the nine counties to $856,200.
In Santa Clara County, the median price of a single-family home jumped a daunting 17.9 percent year-over-year to $1,150,000. Yet the region’s prices were highest in San Francisco, where the median — $1,380,000 — was up 9.7 percent year-over-year. Right behind was San Mateo County, where the median rose 10 percent to $1,375,000. Alameda County’s median price of $867,500 was up 11.9 percent, while Contra Costa County’s median of $627,860 was 10.2 percent higher than a year earlier.
The story behind the price increases, of course, is the lack of inventory. Statewide, active listings fell 11.9 percent from the year before. Every county in the Bay Area and Southern California experienced a drop in unsold inventory, as did most of the Central Coast and Central Valley, the report said.
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And what’s available sold faster than ever. The median number of days required to sell a single-family home in California in August was 18, compared to 28 one year earlier. Locally, San Francisco homes spent 15 days on the market in August, compared to 25 days the year previous; San Mateo County homes spent 11 days on the market, compared to 14; Santa Clara County homes lasted 9.5 days on the market, compared to 15 in August 2016.
It’s all a function of supply and demand.
Buyers fight over the few available homes and prices keep rising: “Even the most affordable markets are facing rising prices,” the report said. “California is no longer home to a single county with a median price below $200,000, and only 10 of 58 counties have a median price lower or equal to the national median price of $258,300.”
In Santa Clara County, buyers essentially are competing “over scraps,” said Sereno Group agent Kevin Swartz, who is based in Saratoga. “There’s nothing for them to buy. Clients that I’m working with — it used to be the case, even at this time of year, that there’d probably be two or three homes to see in a given week, and now there’s often not even a single home that works for them.”
Despite the low inventory, sales rose 1.3 percent year-over-year across the state — a modest increase, but significant given the few homes available.
In the Bay Area, the sales increase was more robust: 6.5 percent, year-over-year, despite the chronically tight housing supply.
The pressure-cooker market is most extreme among lower-priced homes, because they are particularly “inventory constrained,” said California Association of Realtors President Geoff McIntosh. In other words, the supply of affordably priced homes keeps contracting, leading “to weaker sales growth, faster rising prices and fierce competition for the few homes that are listed.”
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That’s been exactly the fallout in Sunnyvale, where a modest house — under 2,000 square feet — recently sold for $2,470,000. That was $782,000 over its listing price.
When prices are computed on a per-square-foot basis, the Bay Area again leads the state in prices, the report said: “San Francisco had the highest price per square foot in August at $871 per square foot, followed by San Mateo ($863), and Santa Clara ($668). Counties with the lowest price per square foot in August included Siskiyou and Lassen (both at $129), Kern ($135), and Tulare ($136).”