We’re still seeing bidding wars, frustrated buyers, happy sellers and a sense of anxiousness for the summer. But we’re starting to see some trend lines heading the right direction, which makes me cautiously optimistic that what we’re seeing is part of a larger trend toward recovery, at least in some of the Bay Area.
Inventory Sees Steady Recovery in Some Counties, Plummets in Others
Through most of the Bay Area, the inventory managed to find a way to fall again for another month. However, San Francisco County was the bright spot, with inventory of single-family homes up 5.8% from March, although still down 38.9% year over year. Still, that’s month-over-month increases every month this year. On the other end of the spectrum, the number of homes for sale in Solano County dropped by almost a quarter (24.4%) from March, and 64.8% year over year.
Note the trend below, that for two counties that started out so different in terms of homes for sale, Solano County now has fewer for sale than San Francisco last April.
Prices Up Across the Board (Almost)
Granted, the median price per square foot isn’t as sexy as the median sale price, but it’s a better gauge of how prices are doing, because it isn’t thrown off by a few big-ticket homes selling in a given month. For single-family homes, the only county in the Bay Area where per-square-foot prices fell month over month in April was Monterey County, which dropped 5% for the month, but was still up 1.2% for the year to $171 per square foot. San Francisco County was up 8.3% from March and up 7.7% from April 2011, to $533 per square foot.
And since everyone wants to know how much the new Facebook millionaires are going to have to shell out to be close to work, per-square-foot prices are down 1.1% for the month and 3.9% for the year in Menlo Park, home to Facebook HQ. However, the median sale price is still above $1.3 million.
Buyers are Giving it 110% (Almost)
We don’t usually talk much about the sale-to-list ratio here, which is the percentage of the asking price a home finally sells for and can be a good measure for demand. For April, we have to talk about it. Five counties in the Bay Area had sale-to-list ratios above 100% for single-family homes: Alameda County (100.1%), Contra Costa County (107.6%), San Francisco County (103.9%), San Mateo County (100.2%) and Santa Clara County (100.4%). When sale to list is over 100%, it usually indicates that bidding wars are happening, driving the prices up over asking, and that supports what we’ve been seeing.
Listed by Andrea Szekrenyi, Keller Williams Benchmark
San Jose
Beds: 3
Baths: 2
Sq. Ft.: 1,300
Listed: April 5, 2012
Closed: Pending
Asking Price: $350,000
Final Sales Price: Pending
# Offers: 53
“My client offered $375,000 with 20% down, and was willing to cover $20,000 for a low appraisal with ten-day contingency, said Redfin agent Frank Wong. “The seller got 53 offers on the home, and the listing agent finally had to tell people to stop submitting offers.”
Listed by Duojia He, Bay One Real Estate Investment Corporation
Cupertino
Beds: 4
Baths: 2
Sq. Ft.: 1,685
Listed: March 27, 2012
Closed: April 26, 2012
Asking Price: $879,000
Final Sales Price: $1,050,000
# Offers: More than 50
“This was a well-maintained 1972 home being sold by the original owner. My clients offered $927,000. Sellers had more than 50 offers and sold to an all-cash buyer for more than $1 million.”
Listed by Edna Eng, Alain Pinel Realtors
San Jose/Campbell
Beds: 2
Baths: 2.5
Sq. Ft.: 1,622
Listed: April 10, 2012
Closed: April 24, 2012
Asking Price: $475,000
Final Sales Price: $540,000
# Offers: 16
“This townhouse was listed for $475,000 and has a $389/month homeowners fee,” said Redfin agent Miawand Bayan. “My clients offered $486,000, all cash with no contingencies and a ten-day closing. The result: The home was pending after seven days with 16 offers. It went to an all-cash buyer for over $520,000 with a seven-day closing and no contingencies. That’s $40,000-$50,000 over asking on a townhouse with a $400 per month HOA.”
Listed by Chris Iverson, Intero Real Estate Services
South Palo Alto
Beds: 2
Baths: 1
Sq. Ft.: 971
Listed: March 27, 2012
Closed: April 26, 2012
Asking Price: $948,000
Final Sales Price: $1,350,000
# Offers: 12
“It’s a nice 971-square-foot home, but I wouldn’t have guessed it was $1.35 million-nice,” said Redfin agent Brad Le. “We offered all-cash at $970K, but with 12 offers, anything can happen and it sold for 42% above asking price.”
Listed by Minxue Qian, Intero Real Estate Services
Cupertino
Beds: 4
Baths: 2
Sq. Ft.: 1,659
Listed: March 28, 2012
Closed: April 25, 2012
Asking Price: $998,000
Final Sales Price: $1,105,000
# Offers: 8
“My clients offered $1 million,” said Redfin agent Brad Le. “The seller had eight offers quickly, and sold for more than $1.1 million. It was only on the market seven days before going under contract.”
Listed by Deborah A Rossetto, LEGACY Real Estate & Associates
Fremont
Beds: 3
Baths: 2
Sq. Ft.: 1,849
Listed: March 9, 2012
Closed: April 20, 2012
Asking Price: $599,950
Final Sales Price: $615,000
# Offers: Approx. 7
“We knew this home would go for more than asking price, so we offered $605,000, which put us in the middle of the pack of six or seven offers,” said Redfin agent Miawand Bayan. “The sellers counter-offered $610,000 to all of the top four offers. My clients didn’t want to lose the house, so I recommended they actually counter-offer above the seller’s counter. We offered $615,000 and my clients got the home.”
]]>For the full source data behind this post, hit the S&P/Case-Shiller website. For a more detailed explanation of how the Case-Shiller Home Price Index is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – December data is released in February).
Here are the basic Case-Shiller stats for the Bay Area* as of January:
January 2012
Month to Month: Down 2.5%
Year to Year: Down 5.9%
Prices at this level in: December 2001
Peak month: May 2006
Change from Peak: Down 42.5% in 68 months
Low Tier: Under $302,275
Mid Tier: $302,275 to $549,932
Hi Tier: Over $549,932
Month to Month: Down 2.5%
Year to Year: Down 5.9%
Prices at this level in: December 2001
Peak month: May 2006
Change from Peak: Down 42.5% in 68 months
Low Tier: Under $302,275
Mid Tier: $302,275 to $549,932
Hi Tier: Over $549,932
Sixteen of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between December and January (one less than between November and December): Washington DC joined Phoenix and Miami with an increase. No data was available for Charlotte in January. Oddly, San Francisco had the largest drop at 2.5%.
Here’s a look at the latest local tiered data, back through 2000:
And here’s a closer look at the recent changes, with the vertical and horizontal axes zoomed in to show just the last year:
All three of the Bay Area’s tiers fell in January. Month to month, the low tier was down 0.7%, the middle tier fell 1.0%, and the high tier decreased 2.5%.
In this next chart, I’ve visualized the month to month trends of all twenty Case-Shiller-tracked cities. Green and above the horizontal axis if they were increasing in the month charted, red and below the axis if they were decreasing. I’ve excluded 2000 through 2004 since they looked largely the same as 2005 (mostly green).
Another gain here, with the best January showing since 2006, when 11 markets were increasing.
Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves:
Here’s our peak decline chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.
Eight cities hit new post-peak lows in January: Tampa (not shown above) at 47.9% off peak, Atlanta at 37.4% off peak, Chicago at 35.9% off peak, Las Vegas at 61.6% off peak, New York at 25.3% off peak, Cleveland (not shown) at 22.4% off peak, Portland at 30.3% off peak, and Seattle at 32.4% off peak. The 10-city and 20-city composites both also hit new lows, both at 34.4% off peak.
Methodology: The Case-Shiller index tracks price changes in sets of homes of similar size and style to better determine changes in what people are willing to pay for the same home over time. If data is available from an earlier transaction for the same home, the two sales are paired and treated as a “repeat sale.” Repeat sales that are too far apart, sales between family members, lot splits, remodels, and property type changes (e.g. from single-family to condos) are excluded from the calculations. All remaining repeat sales are totaled together and weighted based on the time between each sale, then the data for the most recent three months is averaged together to create a given month’s index value (i.e. – September’s index represents the average of the data from July through September).
The three price tiers plotted in the charts below simply represent the top, middle, and bottom third of all sales, based on the initial sale price. In other words, if there were 3,000 sales in the three-month period, 1,000 of them would be in the low tier, 1,000 in the middle tier, and 1,000 in the high tier, by definition.
*[Case-Shiller defines the San Francisco Bay Area as the San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area, which includes all of the following counties: Alameda, Contra Costa, Marin, San Francisco, and San Mateo.]
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Besides the Bay Area, Open Book for Sellers is now available in Boston, Chicago, Seattle, Southern California and the Washington DC area.
* The median sale price of a single-family home in San Francisco in February 2012.
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