Are you considering buying or selling a home in the East Bay? Are you wondering if now is a good time to make a move, or if you should wait, and if so, for how long? Are you curious how quickly your home might sell, or, if you’re in the market for a new home, how much above asking price your offer needs to be? All of these questions can be better addressed by looking at Red Oak’s housing data. Having just wrapped up the second quarter of the year, we’ve got a good snapshot of where things are, and where we might be headed.
Typically, the second quarter is the strongest time of year for the East Bay real estate market because it coincides with the end of the school year. That means properties — and especially bigger homes — sell more quickly and for a higher amount than during any other time of the year. To get the most accurate picture of the market, we compare data from the second quarter of 2017 to the same period last year, looking at Albany, Berkeley, El Cerrito, Kensington, Oakland, and Piedmont. Here are some noteworthy trends:
- Limited inventory: The second quarter usually sees more homes on the market, but this year the number of homes sold decreased 3%, from 991 to 964. That may not sound like a huge decrease, but it reflects the continued trend of very limited inventory. (And low inventory drives prices higher.) Demand is especially tight in Berkeley, where just 236 houses sold (a 6% decrease from 2016).
- Prices continue to rise: The median sale price for a single family residence jumped 10%, from $832,000 to $918,000, which is a historic high. Five years ago, the median price was $475,000. In Oakland, the median price is now $760,000, and in Berkeley it’s $1.2 million.
- Sale prices are much higher than the list price: The average sale price over list price held steady at 16%. But that’s just the average. As you can see from the graphic above, many areas of the inner East Bay and San Francisco end up closer to 20% over asking.
- Homes sell very quickly: The average days on market remains at just 19 days. That’s incredibly fast! And homes above $2 million are selling in just 17 days on average, partially because of all-cash buyers. With the number of cancellations also at their lowest point, it’s clearly an excellent time to sell a home in the Bay Area.
- Affordability is scarce: Unfortunately, only 21% of East Bay residents can afford to buy a home in the area. And between the first quarter and second quarter of 2017, there was a 10% increase in inventory of $1 million-plus homes and a 7% decrease in inventory of homes below $500,000.
- Homes close very quickly: On average, it takes just 27 days to close, another historic low.
Yes, the market looks intimidating and out of reach to many potential buyers, but there are still opportunities in the East Bay. And data shows that Bay Area real estate tends to appreciate in value. Before you make a move, find out what your options are and make an informed decision. Our agents can tell you even more about the market and how to successfully buy or sell a home here. Contact us for more information.