In the second quarter of 2018, the Santa Cruz County market remained very healthy. Compared to the second quarter of 2017, sales were up 9% and sold more quickly, with days on market reduced by 24%, mirroring the same activity in the first quarter of this year. Inventory is still low and trending down, continuing a pattern of limited selection for buyers. The median price also rose again, up 4% in the second quarter and 5% year-to-date.
The Santa Clara County real estate market continued to be very strong through the second quarter of 2018. The early spring multiple-offer market has continued in specific marketplaces, but inventory has increased in most of our communities, taking some of the pressure off home buyers. The single-family median sales price for Santa Clara County now stands at $1,250,000 (up 29% year-to-date!), and the average sales price is approximately 106% above asking price. There may be good news for buyers on the horizon though, as inventory has continued to be added to the market and the available-to-purchase inventory level has improved to almost 50% over this same time last year. The increased available inventory probably won’t translate into a softening of prices as much as it will allow buyers more options in their quest for the perfect home in our valley.
While unit sales have slowed slightly in San Mateo County, there doesn’t seem to be relief from the ongoing trend of continued price increases. In the majority of San Mateo County cities in the second quarter of 2018, there were fewer properties sold than the same period in 2017, and on average, properties were on the market fewer days, while the median price rose 11% countywide.
The San Francisco market remains consistent with drastically low inventory. Nearly exact parallels can be seen between drops in days on market and increases in price. Most notably the districts in the southwest corridor are red-hot — Bernal, Mission, Excelsior, and Bayview are leading the way in demand and increases in price. These lower priced neighborhoods offer excellent freeway access to the Peninsula and Silicon Valley. In the more established higher-end districts, many homeowners see great equity in their market value, but are resistant to list and sell their homes since they do not want to become buyers in a seller’s market and want to avoid the probable higher property taxes and capital gain. The overall quarter-over-quarter price gain for San Francisco is strong, but many fear the sustainability of increases at this pace.
The Napa County real estate market continues its steady stabilization after the frenzy of previous years. Countywide, sales were down 13% from the same period in 2017, and inventory loosened considerably, with months of inventory increasing 31%. Median price showed a healthy but stable increase, up 5% quarter-over-quarter and 4% on the year.
As a whole, the Monterey Peninsula real estate market is strong, with both sales and median price increasing nicely over the same period in 2017. The other two markers of a strong market – days on market and months of inventory available – are both on the decline which also indicates strength. Comparing the first half of 2018 to the first half of 2017, there is a steady upward trend in both number of sales and median sale price. Carmel Valley and Pacific Grove did have a slight decline in the number of sales, but this was due mostly to lack of inventory. In general, things continue to look rosy for Monterey County.
Activity in the second quarter in Marin County caused 2018 to slip further behind 2017, with 2% fewer sales over the same period from the previous year. The median home price did continue to rise, up 10% from $1,100,000 to $1,205,000 in the first half of the year. However, this steady increase shows much more stable growth when compared to the increase of 57% from 2012 to 2017. Even though sellers do not want to see the value of their homes soften, some flattening of the market will reduce the possibility of a precipitous drop, such as that we saw from 2008 to 2012.
In the second quarter in Sonoma County, the months of inventory (the time it would take to sell all of the active listings given the concurrent rate of sale) increased to over two months – a 26% improvement over the “pre-fire” second quarter of 2017, and the result of a decline in new sales. The median price rose 9% in the second quarter over the same period from the previous year, from $599,000 to $653,000 countywide, and 11% year-to-date.
In the second quarter of 2018, Contra Costa County continued to show signs of a loosening housing market, with months of inventory increasing, up 9% over the same period in 2017. Sales were down just slightly, and median price showed a healthy boost, up 8% from $600,000 to $650,000 countywide. The year-to-date numbers at the county level echo the same, indicating a normalization to a healthy and stable market.
As in the previous few quarters in Alameda County, inventory is still very tight, sales prices have generally risen (from 4% in Piedmont to 16% in Albany, year to date), and days on the market have continued to decline. While affordability remains an issue, its effects have been dampened by the sheer lack of inventory that might otherwise have led to a more moderate price rise.
Similarly, though interest rates have begun to increase, hovering in the 4% range, buyers have intensified their pursuit, knowing that rates are likely to rise even further.
Our outlook for the remainder of the year is for more of the same.