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Pacific Union International Q3 Quarterly Report magazine
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Table of Contents
Bay Area: Is the Housing Slump Over? 3
Going, Going, Gone! The Return of Bidding Wars 4
CONTRA COSTA COUNTY 6
EAST BAY 10
MARIN COUNTY 14
NAPA COUNTY 18
SAN FRANCISCO 22
SONOMA COUNTY 30
SONOMA VALLEY 34
TAHOE/TRUCKEE 38
Bay Area: Is the Housing Slump Over?By now you’ve heard the optimistic news emanating from the media and real estate experts across the country: Housing markets are back on their way up.
Home values are rising, foreclosures are dropping, and housing starts are increasing. In addition, recent action by the Federal Reserve should contribute to the climb by pushing down mortgage rates and boosting home prices.
Sounds like great news, and it is – and there are strong indicators the trend will continue, thanks to sustained job growth, low interest rates, and aggressive buyer demand.
If there’s a downside to all this, it’s that buyers who have been waiting on the sidelines hoping to pounce on a foreclosure or distressed property have likely missed their opportunity. The records being set for number of homes sold in the Bay Area are being accomplished with limited inventory, and this will contribute to price appreciation.
The combination of buyer demand and a continuing constrained supply of available homes is leading to a return of one of the hallmarks of the heyday of Bay Area real estate: the bidding war.
Multiple offers on well-priced properties are becoming the norm in many areas, and we predict housing will be 3 to 6 percent more expensive by this time next year.
For more about the return of the bidding wars, read our exclusive feature story on thefollowing page. And best wishes for a happy, healthy, and productive year-end!
Mark A. McLaughlin, CEO,Please remember to seek out local news, trend analysis, and expert advice for your real estate decisions.
Going, Going, Gone! The Return of Bidding Wars
Throughout 2012 we’ve seen continued improvements in our housing markets, and our predictions of enjoying the best real estate year in the Bay Area since 2006 seem to be coming true.
Q3 has also brought the re-emergence of another characteristic of the heights of Bay Area real estate: bidding wars.
Multiple offers on desirable properties have become common, and the bidding wars that result can test the nerves of the most seasoned real-estate veteran.
Sellers in many Bay Area regions may receive 10 to 20 competing offers for a well-priced home; some homes are even luring 30 offers.
Our regions experiencing the most bidding-war activity in Q3 included the East Bay, Contra Costa County, Marin County, San Francisco, and Sonoma Valley. Sonoma County as a whole saw moderate numbers of multiple offers. Napa County and the Tahoe/Truckee area had the fewest bidding wars.
bidding wars during the real estate boom of the last decade. Today’s bidding wars owe more to the laws of supply and demand: too few homes on the market for too many eager buyers.
After years of stagnation, the pent-up demand for homes in the Bay Area today is palpable, fueled by historically low interest rates, economic growth, and an increasingly expensive rental market.
The problem: There’s precious little to buy.
Prospective sellers are waiting on the sidelines, unwilling or unable to enter the marketplace. More than a quarter of all Bay Area homeowners today remain underwater, owing more on their mortgages than their properties are worth. Others won’t sell because they don’t have enough equity yet to buy another home, or are holding out for higher price points.
This reluctance has driven down the supply of housing inventory across the Bay Area, which usually averages four to six months, to below two months in many regions. Cue the feeding frenzy, as hungry buyers compete against each other to land one of those homes.
Bidding wars can be great news for sellers who price their properties appropriately.
One of our real estate professionals recently helped a Bay Area client sell a home that attracted 27 bidders after just one week on the market.
“The seller was completely taken aback by the interest in the property,” our real estate professional said. “We had to be careful with the pricing, but the market was hurting for inventory.”
The home was offered at $417,000, slightly higher than comparable homes in the area. The eventual winning bid
Looking ahead, multiple offers will likely stay on the scene for a year or more, although gradual increases in home values will bring more homeowners above water and back in the market.
Meanwhile, although it can be frustrating for buyers to compete in a bidding war, it’s not necessarily a losing proposition. To improve your odds:
The seller would likely respect your intent -- and you may then consider waiving any unnecessary contingencies to expedite the process.
and want the home can often spell the difference between two similar offers.
And listen to the real estate professional representing you. He or she has unique knowledge about the neighborhoods and homes you’re evaluating, as well as expert insights into market conditions, and can give you valuable advice to tip the scales in your favor.
Bay Area 10-Year Overview
Here’s a look at home sales in the Bay Area’s real estate markets in the third quarter of 2012, with a glance back at the 10 preceding third quarters.
Quarterly Real Estate Report Q3 2012
CONTRA COSTA COUNTY
Senior Vice President, Contra Costa County
A Member Of Real Living
Quarterly Real Estate Report Q3 2012
CONTRA COSTA COUNTY
Contra Costa County: Q3 ResultsLike other Bay Area real estate markets, buyers vastly outnumbered sellers in the third quarter, resulting in multiple
Home sales have been rising all year, and the third quarter was no different. Sales would have been even higher if not for the limited supply of homes on the market.
Home prices showed an increase in Lamorinda – Lafayette, Moraga, and Orinda – and a small gain in Alamo,
in the area.
The end of the third quarter saw a small spike in the number of properties coming onto the market, which may continue into the fourth quarter, but activity will slow as the year draws to a close. Business is expected to pick up again in January and February and on into the spring.
Martinez, Moraga, Orinda, Pleasant Hill, San Ramon, and Walnut Creek. Sales data in the charts below includes single-family homes in these communities.
Median Sales Price
Months’ Supply of Inventory
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Quarterly Real Estate Report Q3 2012
CONTRA COSTA COUNTY
Percentage of Properties Under Contract
Sales Price as a Percentage of Original Price
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Quarterly Real Estate Report Q3 2012
CONTRA COSTA COUNTY
A Closer Look at Contra Costa County
Quarterly Real Estate Report Q3 2012
EAST BAY
Senior Vice President, Managing Broker, East Bay Region
A Member Of Real Living
Quarterly Real Estate Report Q3 2012
EAST BAY
East Bay: Q3 ResultsBuyers continued to outnumber sellers in the East Bay during the third quarter, and bidding wars among buyers
Buyers had to move quickly, as many homes sold within weeks of coming on the market. The supply dropped
the list prices.
The East Bay remains popular for buyers unable to get a home in San Francisco. Prices are moving higher, which should coax more sellers to put properties on the market. Home sales are expected to remain strong through the fall, followed by a typical slowdown during the holidays and then pick back up again
a busy spring.
El Cerrito; Kensington; and Piedmont. Sales data in the charts below includes single-family homes in these communities.
Median Sales Price
Months’ Supply of Inventory
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Quarterly Real Estate Report Q3 2012
EAST BAY
Percentage of Properties Under Contract
Sales Price as a Percentage of Original Price
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Quarterly Real Estate Report Q3 2012
EAST BAY
A Closer Look at the East Bay
Quarterly Real Estate Report Q3 2012
MARIN COUNTY
Senior Vice President, Marin County
A Member Of Real Living
Quarterly Real Estate Report Q3 2012
MARIN COUNTY
Marin County: Q3 ResultsHomes sold briskly in the third quarter, despite the constrained inventory levels that currently bedevil all real estate markets in the Bay Area.
Open houses were well-attended throughout the quarter, attesting to the pent-up demand among buyers, and Mill Valley remained especially popular. Most sales involved multiple offers.
Home prices are creeping up but nowhere near the highs of 2006, and it may take several years before those
prices they expected.
Home stagers are busier than they’ve ever been. That’s a welcome sign that the housing shortage may lessen in the very near future, but other indicators suggest sellers might wait until the spring before joining the market. Recent action by the Federal Reserve to push down interest rates should further encourage buyers.
San Rafael, Sausalito, and Tiburon. Sales data in the charts below includes single-family homes in these communities.
Median Sales Price
Months’ Supply of Inventory
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Quarterly Real Estate Report Q3 2012
MARIN COUNTY
Percentage of Properties Under Contract
Sales Price as a Percentage of Original Price
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Quarterly Real Estate Report Q3 2012
MARIN COUNTY
A Closer Look at Marin County
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Quarterly Real Estate Report Q3 2012
NAPA COUNTY
Napa County: Q3 ResultsOur real estate professionals had a busy summer, with increasing numbers of interested homebuyers at all price points – especially at the higher end of the market, which remained red-hot throughout the quarter. In Napa, anything priced under $700,000, if priced well, sold immediately. In St. Helena, anything under $1 million sold equally fast.
time buyers because investors often are able to submit all-cash bids. All this activity helped push home prices moderately higher, although they remain below the highs reached in 2006 and 2007.
Wine Country properties remained popular, and a recent trend of Asian investment in the area resulted in at least one winery sold to an Asian buyer.
October is shaping up to be another busy month, with year-over-year sales growth expected to continue unabated. After the typical slowdown during the holidays, we look for another busy year ahead, helped by a rebounding economy and historically low interest rates.
Our real estate markets in Napa County include the cities of Angwin, Calistoga, Napa, Oakville, Rutherford, St. Helena, and Yountville. Sales data in the charts below includes all single-family homes in Napa County.
Median Sales Price
Months’ Supply of Inventory
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Quarterly Real Estate Report Q3 2012
NAPA COUNTY
Percentage of Properties Under Contract
Sales Price as a Percentage of Original Price
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Quarterly Real Estate Report Q3 2012
NAPA COUNTY
A Closer Look at Napa County
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Quarterly Real Estate Report Q3 2012
SAN FRANCISCO
San Francisco: Q3 ResultsThe summer months typically see a slowdown in home sales, but this summer was anything but slow. An exceptionally tight supply of homes on the market resulted in frenzied activity among buyers looking to get into contracts at all price points, and multiple bids were the norm for all fairly priced properties.
Sellers found themselves choosing among multiple offers – in some cases 20 or more – which helped push single-family home prices higher across the city. Prices are now very close to the highs reached at the peak of the market in 2005-2006.
Noe Valley was one of the hottest real estate markets in the quarter. Sales volume in the neighborhood was
Haight-Ashbury, and Twin Peaks.
In the condominium market, limited inventory woes continued through Q3, with the months’ supply of inventory tightening up. Even though inventory was down 40 percent, sales were up 38 percent, year over year – a tremendous increase.
Our real estate professionals are hearing of a sharp increase in business for stagers, who typically prepare properties for sale, and for professionals who do pre-sale inspections, so expect to see a wider selection of homes for sale over the next six months.
Single Family Homes – Median Sales Price
Condominiums – Median Sales Price
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Quarterly Real Estate Report Q3 2012
SAN FRANCISCO
Condominiums – Months’ Supply of Inventory
Single Family Homes – Months’ Supply of Inventory
Single Family Homes – Percentage of Properties Under Contract
Condominiums – Percentage of Properties Under Contract
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Quarterly Real Estate Report Q3 2012
SAN FRANCISCO
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Quarterly Real Estate Report Q3 2012
SAN FRANCISCO
Single Family Homes – Sales Price as a Percentage of Original Price
Condominiums – Sales Price as a Percentage of Original Price
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Quarterly Real Estate Report Q3 2012
SAN FRANCISCO
Oceanview.
West Portal, Westwood Highlands, Westwood Park.
Tenderloin, Van Ness/Civic Center.
South of Market, Yerba Buena.
Outer Mission, Mission Terrace, Portola, Silver Terrace, Visitacion Valley.
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Quarterly Real Estate Report Q3 2012
SAN FRANCISCO
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Quarterly Real Estate Report Q3 2012
SAN FRANCISCO
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Quarterly Real Estate Report Q3 2012
SONOMA COUNTY
Sonoma County: Q3 ResultsThe housing recovery in Sonoma County continued at a steady pace, with a marked increase in sales and
$500,000, and we saw increasing demand for all homes priced below $800,000.
The supply of homes remained exceptionally tight. Foreclosures, short sales, and other distressed properties helped keep the housing inventory high in past years, but there were fewer bank-owned properties coming to market in the third quarter. Meanwhile, potential sellers were reluctant to put their homes on the market – some because the drop in values left them owing more on their mortgage than their home is worth, and others because they don’t have enough equity to move up to a higher-priced home.
With demand pushing prices higher, we expect to see more sellers motivated to post for-sale signs in coming months. Low interest rates, an improving economy, and pent-up demand are expected to keep the market busy well into 2013.
Our real estate markets include the cities of Cotati, Healdsburg, Penngrove, Petaluma, Rohnert Park, Santa Rosa, Sebastopol, and Windsor. Sales data in the charts below includes all single-family homes, farms, and ranches in Sonoma County.
Median Sales Price
Months’ Supply of Inventory
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Quarterly Real Estate Report Q3 2012
SONOMA COUNTY
Percentage of Properties Under Contract
Sales Price as a Percentage of Original Price
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Quarterly Real Estate Report Q3 2012
SONOMA COUNTY
A Closer Look at Sonoma County
Quarterly Real Estate Report Q3 2012
SONOMA VALLEY
Branch Executive, Sonoma Valley
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Quarterly Real Estate Report Q3 2012
SONOMA VALLEY
Sonoma Valley: Q3 ResultsThe Sonoma Valley communities of Sonoma, Glen Ellen, and Kenwood continued to face a limited supply of
of location and condition, generated multiple offers.
Buyers looking for second homes accounted for an increasing share of the market. First-time buyers faced extra challenges because often they were in competition with investors able to pay more and submit all-cash bids.
Home prices rose in the quarter, albeit moderately, although they remain below levels reached in 2006. On a positive note, 50 percent more properties priced above $1.5 million sold in the third quarter than in the second quarter.
The limited housing supply may continue through the fourth quarter and into 2013, encouraging multiple offers. First-time buyers may still face competition from investors, particularly in the under-$500,000
Our real estate markets in Sonoma Valley include the cities of Glen Ellen, Kenwood, and Sonoma. Sales data in the charts below refer to all residential properties – including single-family homes, condominiums, and farms and ranches – in these communities.
Median Sales Price
Months’ Supply of Inventory
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Quarterly Real Estate Report Q3 2012
SONOMA VALLEY
Percentage of Properties Under Contract
Sales Price as a Percentage of Original Price
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Quarterly Real Estate Report Q3 2012
SONOMA VALLEY
Quarterly Real Estate Report Q3 2012
TAHOE/TRUCKEE
Branch Executive, Tahoe/Truckee
Quarterly Real Estate Report Q3 2012
TAHOE/TRUCKEE
Tahoe/Truckee: Q3 ResultsThird-quarter real estate activity in the Tahoe/Truckee region was dominated by a limited supply of inventory and resulting bidding wars among buyers. All single-family homes and condominiums priced in line with their appraised values got multiple offers, with homes priced from $300,000 to $600,000 especially popular.
Many properties in the region are second homes for Bay Area residents, and activity spikes whenever prospective buyers are able to spend a few extra days in the area. Accordingly, the week before and after the Fourth of July were extremely busy.
September was also busy after students returned to school and buyers sought to close deals so they could
Unlike traditional residential markets, winter in the mountains can be an active sales time. If skiing conditions are good, the winter months have historically seen strong sales, particularly in larger homes suited for families or groups.
Single Family Homes – Median Sales Price
Condominiums – Median Sales Price
Condominiums – Months’ Supply of Inventory
Single Family Homes – Months’ Supply of Inventory
Quarterly Real Estate Report Q3 2012
TAHOE/TRUCKEE
Single Family Homes – Percentage of Properties Under Contract
Condominiums – Percentage of Properties Under Contract
Quarterly Real Estate Report Q3 2012
TAHOE/TRUCKEE
Single Family Homes – Sales Price as a Percentage of Original Price
Condominiums – Sales Price as a Percentage of Original Price
Quarterly Real Estate Report Q3 2012
TAHOE/TRUCKEE
A Closer Look at Tahoe/Truckee
Quarterly Real Estate Report Q3 2012
TAHOE/TRUCKEE
