Supply of Homes Tight in Bay Area, But Buyers Are Eager — and Determined
Much of the reporting on the 2012 housing recovery has focused on the tight supply of homes on the market, often blamed on homeowners without enough equity to move into more expensive properties or holding out for higher prices to recover their investments.
But there’s another part of the story that’s received far less attention: Homebuyers are snapping up properties at a pace we haven’t seen in at least six years.
We first noticed an uptick in sales in the early spring, and the pace has accelerated since then. Today, people who stood on the sidelines during the recession and housing market collapse are busy writing offers and counteroffers.
STRONG DEMAND FOR HOUSING
Across the Bay Area, home sales have skyrocketed. In the third quarter of 2012, sales in Pacific Union International’s Marin County and East Bay regions were up 26 percent from the same time last year. In San Francisco, condominium sales soared 33 percent.
All seven Bay Area regions, plus Tahoe/Truckee, saw hefty increases in home sales in the third quarter, up an average 14 percent, while the number of homes for sale dropped precipitously, falling an average 26 percent:
- Contra Costa County single-family homes for sale fell 31 percent, while homes sold rose 10 percent.
- East Bay single-family homes for sale fell 28 percent, while homes sold rose 26 percent.
- Marin County single-family homes for sale fell 18 percent, while homes sold rose 26 percent.
- Napa County single-family homes for sale fell 21 percent, while homes sold rose 12 percent.
- San Francisco single-family homes for sale fell 29 percent, while homes sold rose 1 percent.
- San Francisco condominiums for sale fell 22 percent, while homes sold rose 33 percent.
- Sonoma County single-family homes for sale fell 27 percent, while homes sold rose 10 percent.
- Sonoma Valley single-family homes for sale fell 24 percent, while homes sold rose 10 percent.
- Tahoe/Truckee single-family homes for sale fell 19 percent, while homes sold rose 10 percent.
BIDDING WARS ARE BACK
The demand for homes is a strong show of faith in the current recovery, although the combination of tighter supply and sharply higher sales has created a perfect storm for homebuyers. Today, bidding wars have become the norm in California, particularly in the Bay Area.
The California Association of Realtors reported last month that 57 percent of all home sales in the state received multiple offers in 2012, the highest level in at least 12 years. In some parts of the Bay Area that number approached 70 percent as eager buyers compete in a market with significantly fewer homes for sale.
Multiple offers have helped push home prices higher, although many homes are still a bargain compared with their pre-recession values. With prices gradually rising and pent-up demand for homes showing no sign of slowing, 2013 looks to be an active year for Bay Area real estate.
(Photo courtesy of Greg Balzer, via Flickr.)