Bay Area Homes Receiving Multiple Offers

The news remans good for home sellers int eBay Area: low inventory has kept the competition fierce with 60 percent of homes selling over the asking price.

Contra Costa County homes are receiving an average of three offers. Alameda County homes are receiving two offers on average.

Staging a home tends to increase buyer demand and may mean at least one more offer than homes that are not staged.

Homes in the Bay Area Selling Within 3 Weeks

Low inventory is forcing California homebuyers, particularly in the Bay Area, to act quickly and they are: homes in the nine-county sold in an average of 20.4 days in June. The California average of 22.4 days was the lowest since 2004.

San Mateo County had the fastest pace of sales with properties selling within 17.6 days followed by Alameda County (17.8 days) and Santa Clara County (17.9 days)

Prices continued to rise in the Bay Area on a year-over-year increase of 7.9 to a median sales price of $908,740.

Most Americans Think Buying a Home is Still a Good Idea

According to the National Association of Realtors’ 2017 PULSE National Survey, 84 percent of the respondents believe that purchasing a home is a wise financial decision. Building equity remains the top reason for purchasing followed buy the desire to for home ownership, investment potential, the stability of mortgage payments and tax benefits.

Other common reasons supporting home ownership include creating safe and secure neighborhoods, the home as a stable environment to raise a family, as well as educational and health reasons.

While most Americans agree on the value of home ownership for well-being, a growing number are concerned about a lack of affordability and the shortage of available homes.

U.S. Homeowners Equity Continues to Increase

One of the positives of the continued home price appreciation is the amount of equity that homeowners can borrow against has increased significantly, especially in California. Currently 40 million homeowners in the U.S. have at least 20 percent equity in their homes.

40 percent of the nation’s tappable home equity is in California.

three of the top five of metro areas in the U.S. with the most home equity are in California including San Francisco, San Jose, and Los Angeles.

U.S. Employment Remains Strong

The employments news continues to be positive. Since 2016 the U.S. economy has added 2.24 million jobs and the unemployment rate sites at 4.4 percent.

All is not completely roses however. Wage growth continues to lag with hourly wage growth at 2.5 percent annual growth.

Likewise, there continues to be a disparity between employer-needed skills and existing labor-force skills. For example, in the Bay Area alone the information sector added 9,600 new jobs.

Home Prices Up, Wages Down

The combination of rising home prices (7.7 percent) and falling wages (1.4 percent) are the prime factors in U.S. home affordability dropping to a 9-year low.

Year-over-year home price growth was greater than wage growth in 87 percent of the nation’d housing markets, including 8 of 9 Bay Area counties. The U.S. median home price at the end of the second quarter was $253,000.

These factors, together with rising mortgage rates, have pushed affordability to the lowest point since 2008.

The Nation’s Hottest Market is —Vallejo?

Sure, we’ve all heard that the San Francisco-Oakland-Hayward metropolitan area is one the hottest real estate markets in the country (actually, number 2) and it’s no great surprise that the San Jose-Sunnyvale-Santa Clara area is number 9. Even Sacramento-Roseville-Arden-Arcade metro checks in at number 4.

But how many could have predicted that the hottest real estate market in the country, as reported by Realtor.com is the Vallejo-Fairfield area?

With a hot job market and continued low inventory other hot areas in California include Stockton-Lodi (No. 14), Santa Rosa (No. 17), Yuba City (19!) Modesto at No. 20.

More Listings to Come?

The National Association of Realtors’ quarterly Housing Opportunities and Market Experience survey reports that 71 percent of homeowners believe that now is good time to put a house on the market up from 61 percent in the second quarter of 2016. On the other hand, the reports shows that Americans are less confident in the economy and their personal financial outlook.

Housing affordability remains a big problem due to slow wage growth and rising home prices, especially in the more expensive areas of both coasts.

According to The Mercury News, the median price for a single-family home reached an all-time high in May at $818,000.

For-Sale Home Inventory Continues to Drop

It’s been a constant theme for awhile now but according to Zillow’s Real Estate Market Reports for May the number of for-sale homes on the market is dropping at the fastest pace in nearly four years.

Nationwide, there are 9 percent fewer homes for sale than a year ago in 2016. San Jose has approximately 30 percent fewer home on the market than a year ago.

Moreover, new home construction is unable to keep up with demand and likely out of the price range of most first-time buyers. Compounding the problem are investors who buy new homes with the intention of renting.

Home Price Growth in Most U.S. Metro Areas in 2016

The Harvard Joint Center For Housing Studies State Of The Nation’s Housing 2017 report states that home prices increased in 97 of 100 U.S. metro areas in 2016. On a nominal basis, nationwide prices increased by 5.6 percent from the previous year but adjusted for inflation prices are still 15 percent shy of the previous peak.

San Jose and San Francisco have exceeded their previous peaks while Napa, Oakland, San Rafael, Santa Rosa, and Vallejo remain short of previous highs.

Currently, San Jose ranks’s as the least affordable housing market in the nation, with less than 25 percent of households able to purchase a home.