Northern California continues to experience a healthy sellers’ market with median and low priced properties and, in some areas, with reasonably priced luxury properties. Due to the limited inventory and high demand for median priced properties, most reasonably priced listings receive multiple offers above asking price.
According to the National Association of Realtors® (NAR), in March there was a 0.8 percent decline in the Pending Home Sales Index based on contract signings from February to March, but there was a 0.8 increase in the Pending Home Sales Index based on contract signings compared to March 2016.
“Sellers are in the driver’s seat this spring as the intense competition for the few homes for sale is forcing many buyers to be aggressive in their offers,” said Lawrence Yun, NAR chief economist. “Buyers are showing resiliency given the challenging conditions. However, at some point—and the sooner the better—price growth must ease to a healthier rate. Otherwise sales could slow if affordability conditions worsen.”
Competition is high in most of Northern California because there is an abundance of buyers seeking affordable family homes, which are in low supply. Most open houses for new listings are seeing attendance as high as 50 people on weekends. The low inventory is also keeping some sellers from listing their property out of fear that it will sell before they are able to secure a new home.
According to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), “Even with a strong performance in March closed escrow sales, a shortage of available homes and robust price growth that’s eating away at affordability stifled pending home sales for the third straight month.”
Unless inventory remains low, buyers may find some relief in the coming months as the Spring Market continues to bring new listings to the market in hopes of meeting the high demand.
Here’s what was happening in the North Bay:
With only 187 active residential listings in Santa Rosa, the market is tightening again. Many homes are receiving multiple offers and time on market is decreasing. Open homes are busy, indicating that the buyers are here and are looking around hoping to find more sellers. Average days on market for March fell 14 percent from February. For Sonoma County wide, the number of new listings fell more than 10 percent in the first quarter. There is a lot of new inventory that came on to the luxury market. There was a 40 percent increase in listings in the luxury market from February to March. Pending sales increased by approximately 40 percent and closed sales for the first quarter this year compared to 2016 are up 31 percent. The market remains ultra-competitive in the lower middle to the upper middle price ranges. There are still more buyers than sellers. In the luxury end of the market, it is still competitive but there’s not quite the sense of urgency as in the lower price levels. Sebastopol is seeing an increase in available properties, but they are all going quickly. Because they have been priced out of the market, buyers are relocating from the Bay Area and are attending various open houses. The market is currently down 7 percent in listing inventory and 29 percent in sold listings compared to last year. However, the average sales price is up 17.04 percent. The Southern Marin office closed the highest price listing ever in Mill Valley at $7,200,000 and the highest price per square foot ever at $1,650 per square foot. The luxury market is strong. About 25 percent of homes listed over $2 million are under contract. This percentage typically runs between 10 percent and a max of 20 percent. The general market continues to experience a strong seller’s market. With 75 percent receiving multiple offers, this market will continue as is until there are more listings. In downtown San Mateo, listings are increasing and sales are getting stronger.