How hot is the San Francisco Bay Area housing market?
So hot that the area’s median home sales price has risen 45 percent compared to a year ago—up 7 percentage points in the last two weeks alone. So hot that 18 percent of listings are selling in seven days or less. So hot that half of all listings sell in 14 days or less.
According to data from ZipRealty Inc.’s latest Housing Trends Report, at the end of last month, the median sales price for a San Francisco Bay Area home was $534,000. That compares to $369,000 a year ago.
The Bay Area has the tightest housing market in the country, Zip said, based on data from more than 24 U.S. markets including Los Angeles, San Diego, Washington, D.C., Dallas and Boston encompassing 45 percent of the U.S. population.
The Bay Area inventory of for-sale homes has fallen 56 percent in the last year—the largest decline of any market that Zip tracks save Sacramento, where the decline on a percentage basis was the same. In the Bay Area, that’s the difference between 12,701 homes on the market for sale on the last day of March 2012 and 5,599 homes on the same day this year.
Bay Area median housing prices also are rising fastest in the country followed by Las Vegas, Sacramento and Phoenix with increases of 35 percent, 31 percent and 30 percent respectively.
“I think that this market will cool off, but I think it cools off to a pretty healthy clip of growth for the next several years,” said Lanny Baker, ZipRealty chief executive and president.
Buyers are pouring into the marketplace after waiting years to see housing prices find a bottom and start to recover. “The best time for a seller is when you have 10 buyers,” Baker said. “The depth of buyers is really helpful in propelling this kind of market.”
Bay Area homes are selling nearly as fast as they can be listed, with 7,702 single-family homes, condominiums and townhomes on the market as of March 31 compared to not quite 6,400 pending sales, according to Zip. Homes are selling for nearly 3 percent over list price.
Emeryville-based ZipRealty, founded in 1999, is a full-service online brokerage that does business in 20 major U.S. housing markets with more than 1,500 Realtors. The company touts its technological prowess and counts its software, which it sells as a service, as one of its “core competencies.” ZipRealty.com attracts approximately 2.4 million unique monthly visitors, according to the company’s filings with the Securities and Exchange Commission.
Zip promises homebuyers and home sellers “the most accurate and relevant data on homes currently for sale.” It uses its proprietary technology to serve its own agents and sells it to others, while promising competitive brokerage rates for customers borne on the efficiencies of the Internet.
Bay Area housing markets did not experience the housing boom and bust equally, Baker said. East Bay communities as a group experienced declines on the order of 50 percent, much deeper than either San Francisco or Silicon Valley. In recovery, the markets are acting more than same, and across the region median sales prices are up 30 percent, Baker said.
In the East Bay, that means home prices are still well below their peak. But homes in some Silicon Valley neighborhoods are hitting prices that exceed those established in 2006 and 2007, he said. San Francisco overall is strong but not above its mid-decade highs. “What’s helping in San Francisco is that there are parts that were less desirable and those have become hip and trendy, and values there are up tremendously,” he said.
Baker does not expect median home prices to continue their torrid climb, but he does expect them to continue to rise. While the housing bubble pulled demand forward, he believes some buyers have kept themselves out of the market for as long as five years, creating tremendous pent-up demand.
“As I look out over the next couple of years, I see smaller year-over-year increases in median prices, but that is still pretty good.”
Data and graphs provided by ZipRealty