Majority of San Francisco, San Mateo County Home Sales Above the $1 Million Mark

Bay Area property prices continue to enjoy double-digit-percent annual increases, even as appreciation slows across the rest of the Golden State. And in Silicon Valley, homebuyers seem to have no shortage of cash at their disposals.

PropertyRadar’s most recent Real Property Sales report puts the September median price for a California home at $405,000, down 2.4 percent from August and up 3.3 from one year earlier. On a monthly basis, the median price fell in 21 of California’s 26 largest counties, though it remains near an eight-year high statewide.

In a statement accompanying the report, PropertyRadar Director of Economic Research Madeline Schaff noted that while appreciation is cooling across the state, Bay Area gains are still holding strong.

“Home prices in the Silicon Valley corridor, consisting of San Francisco, San Mateo and Santa Clara counties, continue to buck statewide trends and are experiencing double digit price appreciation,” she said. “The increased demand from plentiful well-paying jobs, exorbitant rents and fear of higher mortgage interest rates has sent home prices into the stratosphere.”

The report says that home prices in Santa Clara County increased by 13.8 percent year over year in September while rising 11.3 percent in San Mateo County, among the highest growth rates in the state. Extraordinary demand for Silicon Valley real estate appears to also be fueling appreciation in nearby Santa Cruz County, with prices there climbing by 18.3 percent on an annual basis in September, the highest rate of growth in California.

Silicon Valley homebuyers seem like they are swimming in cash, with all-cash deals accounting for 21.5 percent of transactions in the region so far in 2015 and nearly two-thirds of buyers dropping down payments of at least 20 percent. “At median price levels bouncing off of a million dollars, that is an impressive statistic,” Schaff said. In fact, more than half of all home sales in San Francisco and San Mateo counties in September exceeded the $1 million price point.

A graphic accompanying the report shows that the median sales price in most of Palo Alto and Los Altos actually appears to be above $2 million. Schaff doesn’t see price gains in the region slowing until buyer demand subsides or lenders become more tightfisted.

(Photo/Flickr: Alan O’Rourke)

Bay Area's Dubious Distinction: Tightest Housing Supply in California

The supply of homes for sale in the Bay Area remained exceptionally tight in July, with no other region in California even close to our constricted inventory levels. The limited supply had predictable results: Sales prices were up solidly from a year earlier, and the Bay Area remained the only region where multiple offers pushed final prices above list prices.

The California Association of Realtors said in its July 2015 sales and price report that the months’ supply of inventory (MSI) for single-family homes held steady at 2.0 across the nine-county Bay Area, compared with 3.6 in the Los Angeles metro area, 3.9 in the Inland Empire, and a statewide average of 3.3.

San Mateo and Marin counties had the tightest housing supply in the state, both with an MSI of 1.5. They were followed by San Francisco (1.6), Alameda and Santa Clara counties (1.8), Contra Costa County (2.2), Sonoma County (2.6), Solano County (2.7), and Napa County (3.2). An MSI of 6.0 to 7.0 is typically considered to be a balanced market, with larger numbers favoring buyers and smaller numbers favoring sellers.

The median sales price in the Bay Area was $831,290 in July, down 0.2 percent from June but up 9.1 percent from a year ago, outpacing the state’s annual home price growth of 5.4 percent. July sales were down 0.2 percent from June but up 5.2 percent from a year earlier.

“While July home sales rose at the statewide level, the market is still constrained by low housing affordability and a tight supply in areas where job growth is robust, such as San Francisco and San Jose,” said CAR President Chris Kutzkey in a statement accompanying the sales and price report. “Neighboring regions such as Napa, Solano, and Sonoma are experiencing strong sales due to their affordability and proximity to job centers. However, housing affordability could become a bigger issue in these areas if housing demand continues to grow but supply can’t keep pace.”

On an annual basis, median sale prices rose in all but one of the nine Bay Area counties, led by San Francisco, up 19.9 percent to $1,312,500; followed by San Mateo, up 16.4 percent ($1,300,440); Alameda, up 12.2 percent ($810,640); Santa Clara, up 12.1 percent ($965,000); Sonoma, up 11.8 percent ($570,190); Solano, up 7.4 percent ($360,690); Marin, up 2.7 percent ($1,057,140); and Napa, up 0.9 percent ($655,610). Contra Costa posted the only year-over-year price decline, falling 5.8 percent to $746,040.

The Bay Area is home to the six most expensive counties in California: San Francisco, San Mateo, Marin, Santa Clara, Alameda, and Contra Costa.

Homes statewide sold at a median of 98.8 percent of the list price, except in the Bay Area. Homes here sold at a median of 5.2 percent above the list price, up from a 3.4 percent premium a year earlier, but down from a 6.3 percent premium in June.

San Francisco had the highest price per square foot in July at $804, followed by San Mateo County ($748), and Santa Clara County ($574).

(Photo: Flickr/Woodleywonderworks)