One would think that the coronavirus (Covid-19) restrictions would put a damper on home sales in the Bay Area. Surprisingly, just the opposite happened in April. There were several quick sales and a robust market that led to home prices being higher in April than in previous months.
Zillow analyzed the median home prices in seven East Bay and Silicon Valley counties. Alameda County saw a seven percent price jump, and Santa Clara County saw a six percent price jump when compared to April 2019. A single-family home had a median sale price of $896,000 in the Bay Area.
Home sellers were understandably reluctant to have strangers tour their homes during the pandemic. This led to a reduction in homes that were up for sale. However, the homes that went on the market were quickly purchased with a speed reminiscent of the housing boom scene between 2017 and 2018.
These numbers reflect the fact that the value and prices of single-family homes in the Bay Area have remained consistent. The Bay Area is home to many residents who work in the tech field and that is a sector of the economy that has not been as affected by the coronavirus. Couple that with unprecedentedly low interest rates and a small but coveted home inventory and it’s easy to see why prices have continued to rise for homes in this area despite pandemic restrictions.
When you look at Santa Clara County and Alameda County, you see that home prices rose to $1.27 million and $940,000 respectively. This reflects what we see throughout the Bay area. San Mateo saw homes rise 3.1 percent to have a median value of $1.49 million. Contra Costa benefited from a 2.2 percent increase, bringing the median cost of a single-family residence to $666,300. San Francisco also benefited thanks to a 3.6 percent increase, bringing the median cost of single-family homes to $1.59 million.
All of this increase should not lead one to believe that buyers and sellers in the Bay Area have thrown coronavirus health cautions to the wind. The volume of single-family homes on the market in the area took a steep 21.4 percent dive in Santa Clara, with similar numbers being seen in Contra Costa and Alameda. San Francisco faced a nearly 50 percent reduction in the number of homes that went up for sale in April.
Record low interest rates have played a part in keeping the housing market from collapsing during the pandemic. Recent months have seen the 30 year fixed mortgage rate dropped to a mere 3.1 percent based on information provided by Freddie Mac. However, Zillow confirms that the median price of a single-family home in the United States went up by 4.3 percent in April.
Real estate agents working in the Bay Area have expressed surprise by the resilience of the housing market throughout the lock down. At first, real estate agents were completely restricted from showing homes. Slowly, government restrictions have been pulled back, allowing agents to first show vacant units and now show units that are occupied if the home’s occupants are not present.
Guidelines have limited the number of visitors who can see for sale real estate to two people plus the agent. Social distancing, the use of masks, and appropriate cleaning procedures are a must. Open houses are not an option.
Some agents are making use of technology like 3-D tours and videoconferences to sell homes. It is not uncommon for homes to hit the market and then be sold just a few days later. In April 2019, homes in the Bay area took around 36 days to sell. April 2020 saw homes in the same area selling in seven to nine days. The level of demand is remarkable.
Safety concerns mean that real estate agents have had to seriously vet buyers. Only buyers who qualify to purchase the home and are serious about purchasing the home have been allowed to enter. This has led to an increased workload for real estate agents. Still, many agents comment that they have been out on appointments almost every day.
Buyers want something different from homes now than what they wanted in the past. Working on a fixer-upper through the quarantine and with social distancing restrictions has become more of a problem than it is worth for many home buyers. People just don’t have the time to focus on their career, home school their children, work remotely, move, and work on a fixer-upper.
Most people are looking for a turnkey home. In the Bay area, homes in the $1.7 million to $2.5 million range are what two-income families are looking for. Many real estate agents expect buyers to become more comfortable with the social distancing requirements. This could lead to real estate agents seeing an increase in activity as the spring and summer months continue.