Demand-Supply Rift Causes Bay Area Home Prices to Soar
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Lack of housing inventory and buyer rush have created a demand-supply rift, resulting in high median prices for the Bay Area. For single homes, the Bay area median prices have risen by 8.6% (sitting at $950,000) in July, piggybacking on price surge in Contra Costa and San Mateo.
The performance is largely due to the first home buyers sitting out the pandemic and luxury buyers grabbing the high-price deals. Freddie Mac believes that the Bay Area is among the top housing markets in the country and its notable performance can be put down to fearless buying by tech professionals in the times of economic drag.
Low mortgage rates, also, have definitely helped the cause of the buyers. Sellers had virus apprehensions in spring and it led to a lot fewer home tours, leading to a sale drop. But the sellers, clearly, have given up, looking at the aggressive buying spirit of high-salaried techies (among others).
Compass agent Matt Rubenstein suggested that “I’ve seen some ridiculous offers.” Buyers are not bothering about the pandemic red flag and raising prices and making preemptive bargains.
Cupertino agent Alan Wang said that “It’s been extremely busy,” Wang further suggested that “You would have thought it would have slowed down. Tech is one of those unique industries. It’s a little strange, for sure.”
According to CoreLogic, the year-over-year single-family home prices have shot up by 25% in Marin County, 15% in Sonoma County, and 11.3% in Napa County. Year-over-year median sale prices for resale homes hiked by 16.7% in Contra Costa, 10.3% in San Mateo, 8.2% in Alameda, and 2.7% in San Francisco.
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