In a lot of the U.S., the housing market is swinging in favor of buyers. But California—especially the Bay Area—is bucking the trend. In the Golden State, homes fly off the market at record speed. Meanwhile, cash buyers make the market even more competitive, and home values are appreciating at far higher rates than the national average.
Planning to buy a home in California? Here are 6 facts you need to know about its sizzling hot housing market:
The Bay Area is the Most Expensive Market in California
When it comes to housing in California, San Francisco is overall the most pricey region. The median home price in the Bay Area was $867,000 in February 2019, according to the most recent data available from the California Association of Realtors. Meanwhile, the median home price in the Inland Empire (a metropolitan area in southern California encompassing the cities of San Bernardino and Riverside) is $369,900. In the Los Angeles metro area, median home prices are just over a half million at $505,000.
Homes Sell Fastest in the Bay Area
Homes move off the market at breakneck speed in the Bay Area. In fact, homes in the Bay Area not only sell the fastest in California, but also the nation. Overall, single-family homes in the San Francisco Bay area were only on the market for 20 days, according to the latest market data from the California Association of Realtors. That compares to 42 days in the Los Angeles area, 49 days in the Central Coast, 29 days in the Central Valley, and 48 days in the Inland Empire.
Why does this matter to buyers? When you step foot into an ultra-competitive market, you’ll be faced with some strong competition. Hot markets tend to favor cash buyers because they can close fast, which is of great importance to sellers. (Here’s how you can compete with cash buyers).
The Luxury Home Market in San Francisco is Extremely Competitive
When you look at an area’s data for average “days on the market” (or DOM), under 30 days is considered a fast-moving market. Under 20 days signals extremely high demand. In San Francisco, luxury homes are getting snapped up in just 15 days, according to the March 2019 report from the Institute for Luxury Home Marketing. By comparison, the DOM of luxury homes in Los Angeles’ beach cities is 39 days. Nationwide, the average DOM for luxury homes is 63 days. While the luxury market is mostly considered to be a buyer’s market presently, it remains a seller’s market in San Francisco, according to the report.
San Francisco has the Priciest Homes in the Bay Area
The luxury market has a range of price points in the Bay Area. These are the median sales prices of homes in some of the Bay Area’s luxury markets, according to the Institute for Luxury Home Marketing.
- San Francisco, $3.65 million
- Silicon Valley, $3.17 million
- Marin County, $2.47 million
- Napa County, $2.05 million
Home Prices, Overall, are Going Down in the Bay Area
While the housing market is uber competitive in the Bay Area, overall home prices are dropping. Plus, mortgage rates are still low, making now a good time to buy. About a year ago, in April 2018, the median home price in San Francisco was $1.05 million, which is $183,000 more than current median home prices, according to market data from the California Association of Realtors. Home prices in the Los Angeles area saw a slight dip, and the median price in the Inland Empire increased.
Bay Area Homes are Appreciating at High Rates
The home value appreciation rates in the Bay Area far outpace the national average. The fastest appreciating homes in the Bay Area are in Oakland, where home values have appreciated 192 percent since 2011, according to Bay Area Market Reports. That compares to 49 percent nationwide.
Here’s an overview of how much homes have appreciated since 2011 in the Bay Area, broken down by county:
- Oakland, 192 percent
- Santa Clara, 139 percent
- Santa Clara and Alameda, 126 percent
- San Francisco and San Mateo, 121 percent
- Napa and Sonoma, 106 percent
- Marin County, 75 percent
Gearing up to buy in California? Our loan officers are ready to help you compete with cash and get into the home of your dreams! Set up a quick 15-minute consultation now.