Chief Economist Selma Hepp offers a brief synopsis of first-quarter real estate activity in each of Compass’ Northern California regions. The accompanying links lead to the full report for each area, where you can access the latest regional and community-specific market data and statistics to help you make a better, more informed home-buying or selling decision.
Q1 2019 Regional Summaries
Similar to the Bay Area overall, home buyers in Contra Costa County in the first quarter of 2019 generally showed restraint, bringing home sales activity below levels seen in the same period last year. While sales mostly slowed across all price ranges, buyers of homes priced between $2 million and $3 million maintained their momentum keeping sales activity on par with last year. This price range has been popular in Contra Costa over the last year.
At the same time, available inventory continued to improve across all price ranges with an overall increase of about 12 percent and all price ranges positing 10-plus percent increases. Buyers of homes priced between $2 million and $3 million saw the largest increase in options compared with last year.
Despite more inventory, buyers remained reluctant and unwilling to engage in bidding wars or pay more than the asking price. Price reductions, while fewer than during the winter months, still remained elevated compared to last year with 2 in 10 homes selling below listed price. The median sales price perked up about 2 percent compared to last year’s first quarter.
Looking Forward: With the arrival of spring, many home buying conditions improved, including lower mortgage rates, more inventory, and realigned seller expectations – all of which should signal opportunities for home buyers in coming months and are reflected in increased buyer interest.
Click here to read the full Q1 2019 Contra Costa County real estate report.
East Bay
While East Bay housing market activity in the first quarter showed similar restrain as most of the other Bay Area markets, buyer demand of homes priced above $2 million remained strong and notably above last year’s first quarter activity. Most of the slowdown in sales came from homes priced between $1 million and $2 million, which could be a result of detrimental impact of the tax reform among the buyer group which may be more sensitive to lower home deductions.
Buyers in the East Bay also saw continued improvement in inventory among all price ranges, with largest increases again among homes priced between $1 million and $2 million. Buyers continued to take longer to decide on buying homes leading to longer time on market and more price reductions compared to the same period last year. With affordability as a main concern for some buyers, homes priced below $1 million saw relatively more price reductions than higher priced homes. As a result, the pressure on median home price growth continued to ease.
Looking Forward: Following a difficult quarter, spring has brought improved home buying conditions, including lower mortgage rates, more inventory, and realigned seller expectations – all of which signal opportunities for home buyers and are reflected in improved home buying sentiment.
Click here to read the full Q1 2019 East Bay real estate report.
As in most of the Bay Area, first quarter housing market activity in Marin remained challenging, leading to fewer overall sales compared to last year. However, most of the decline in sales came from homes priced above $3 million, while lower priced homes fared relatively better than in most of the other Bay Area regions.
Meanwhile, the inventory of homes for sale continued to increase compared to a year ago, albeit at a lower pace than in some other regions. Homes priced above $3 million saw a relatively larger increase in inventory than lower priced homes.
Buyers remain trepid amid the economic and political uncertainties that characterized the first quarter, taking longer to make a decision and seeking price reductions. However, while the price reductions are elevated compared to the year before, they have declined since winter peaks. Most of the homes sold below asking price were higher priced homes. As a result, median price growth stalled in the first quarter.
Looking Forward: Following a challenging beginning to the year, spring home buying season offers improved opportunities for buyers, including lower mortgage rates, more inventory, and improved balance between buyers and sellers already leading to more optimistic buyer sentiment than in recent months.
Click here to read the full Q1 2019 Marin County real estate report.
Napa’s first quarter housing market faced challenges including continued slowing of overall home buyer demand and rainy winter conditions, leading to fewer homes sold compared to last year’s first quarter. While fewer homes were sold across price ranges, sellers of homes priced between $1 million and $2 million faced relatively more resistance from buyers, while buyers of homes priced below $1 million demanded more discounts.
Availability of for-sale inventory continued to improve in the first quarter with buyers across most price ranges having more options than in the last year. Buyers, however, remained reluctant, taking much longer to make a decision than in the last couple of years.
Although buyer reluctance led to fewer bidding wars over the last two quarters, the last couple of months showed some rebound in buyer competition with more homes selling over asking price than during the winter lows. Still, notably more homes sold below asking price than last year. Home price growth, while weakening in the first quarter, picked up again as March rolled around.
Looking Forward: With improved home buying conditions in recent months, not least of which are lower mortgage rates and slower price growth, home-buyingdemand should pick up. Napa County’s relative affordability make it especially attractive to Bay Area buyers.
Click here to read the full Q1 2019 Napa County real estate report.
San Francisco’s slowing housing market activity which started in the fourth quarter 2018, continued to trend lower in the first quarter leading to fewer units sold across all price ranges. Homes priced between $2 million and $3 million saw a relatively larger decline on a year-ago basis which was the case in most Bay Area regions.
Despite slight improvements, for-sale inventory remained a challenge and buyers continued to face limited options. However, buyers remained relatively more enthusiastic than elsewhere in the Bay Area, with buyers of both single-family homes and condominiums more likely to absorb the newly available inventory and homes more likely to sell over the asking price than not. Six in ten homes continued to sell above asking price with the average premium keeping relatively steady at 13 percent. As a result, San Francisco did not see an increase in price reductions compared to last year’s first quarter, unlike many other regions in the Bay Area.
Looking Forward: San Francisco homebuyers remain determined, helped by improved home buying conditions, better financial markets, lower rates and possibly increased competition from newly minted IPO beneficiaries.
Click here to read the full Q1 2019 San Francisco single-family homes real estate report.
Click here to read the full Q1 2019 San Francisco condominiums real estate report.
Following the overall slowing of housing market activity in the Mid-Peninsula in the later part of 2018, first quarter finished with a continued decline in total number of homes sold, except for a jump in sales of homes priced below $1 million. At 5 percent fewer sales in the Mid-Peninsula in the first quarter, this decline is relatively smaller than in adjacent San Francisco and Silicon Valley where declines averaged over 10 percent.
For-sale inventory continued to improve, mostly among homes priced above $1 million while fewer and fewer lower priced homes were available for sale.
Buyers remained restrained and fewer homes sold over asking price compared to the first quarters of previous years. However, recent months have shown some renewed enthusiasm leading to a pick up in buyer activity and bidding wars. Overall, 6 in 10 homes continued to sell over asking price. In addition, slowing of median price growth, which started in the second half of 2018, reversed some in March, showing a positive increase year-over-year.
Looking Forward: With the arrival of spring, many home buying conditions improved, including lower mortgage rates, more inventory, rebound in financial markets and realigned seller expectations – all of which should signal more opportunities for home buyers and a stronger housing market in the coming months.
Click here to read the full Q1 2019 Mid-Peninsula real estate report.
Silicon Valley continued to see relatively muted housing market activity in the first quarter, especially when compared to last year’s uncharacteristically dynamic conditions. Nevertheless, while total number of homes sold declined, winter’s build-up in affordably priced inventories in Santa Clara County helped push sales of those homes above last year’s levels. Largest decline in home sales activity was among homes priced above $3 million.
At the same time, while Silicon Valley continued with inventory decreases, the remainder of Santa Clara County experienced relatively larger increases in the number of homes for sale compared to other Bay Area regions, and the increases were widespread across price ranges.
Buyers remained restrained and less likely to engage in bidding wars than in previous years. However, improved home buying conditions and lower mortgage rates brought back some enthusiasm leading to a bounce back in the share of homes selling over asking price. About 50 percent of homes sold over asking price at the end of the quarter.
Declines in sales of higher priced homes, coupled with buyer restraint, led to a decline in median home prices on a year-over-year basis. However, median prices are still in line with levels prior to last year’s extraordinary jump in prices, averaging almost 30 percent at times.
Looking Forward: With improvement in buying conditions such as lower mortgage rates, more inventory, lower median prices, buyers are facing great opportunities this spring. Renewed interest is also evident in improved home buyer sentiment in March.
Click here to read the full Q1 2019 Silicon Valley real estate report.
While the spirit of rebuilding continued in Sonoma County in the first quarter, housing market activity remained affected by similar buyer restraint as in other Bay Area regions. Sales activity continued to trend below last year’s levels, though the largest relative declines were among higher priced homes, especially those priced above $3 million which showed virtually no sales in the first quarter.
Meanwhile, following strong increases in for-sale inventories during the winter months, sellers took a step back, leading to much smaller increases in inventories on an annual basis, especially among homes priced below $1 million. Overall, inventory is still higher than last year.
Post-fire bidding wars and rapid price growth continued to wane, and together with restrained buyers, led to lower prices than March 2018. Median prices are now back to levels seen in October 2017, prior to the wildfires. Sellers also adjusted their expectations and homes were priced at levels aligned with buyer’s willingness to pay, resulting in fewer overall price reductions than during the winter months.
Looking Forward: The extreme rains that have been pelting Sonoma County are beginning to slow, and an increase of sunny skies should kick off a delayed buying season. Another wildcard for Sonoma County might be that many fire survivors will running out of the two years of Like-Kind housing provided by insurance companies. That will likely force the decision to build, buy or move on. Since the cost of building has risen substantially, primarily due to the price of both materials and labor, many survivors may be coming into the market for comparable existing home options.
Click here to read the full Q1 2019 Sonoma County real estate report.
Housing market activity in the first quarter in Sonoma Valley continued at a slower pace, resulting in fewer homes sold compared to last year’s first quarter. Slower sales activity reflected a similar sentiment seen across the region. However, unlike the rest of Sonoma County or other Bay Area regions, Sonoma Valley did not see an uptick in listing inventory. The persistent rains this winter and spring seem to have kept sellers from bringing their properties to market. One good sign is that open house activity has been strong despite the rain, indicating that buyers’ intent doesn’t appear to have been dampened by the weather.
Buyer restraint continued to hold back demand for homes resulting in more price reductions and lower sales price than the original asking price. Median prices, while slightly lower than in the first quarter last year, returned to levels seen prior to wildfires, which led to remarkable price growth in first half of last year.
Looking Forward: Sonoma Valley remains a favorable market for buyers, both for primary homebuyers and second-home buyers due to its proximity to San Francisco and other Bay Area job centers. With improved buying conditions, such as lower rates, lower home prices, and reduced financial market volatility, home buyers once again have a great opportunity to buy in Sonoma Valley.
Click here to read the full Q1 2019 Sonoma Valley real estate report.
Much like in the Bay Area, first quarter housing market activity in the Lake Tahoe region continued to slow compared to last year’s first quarter. Decline was relatively more notable in March compared to the previous two months, likely due to a spike in sales activity in Lake Tahoe last March as well as relatively snowier conditions this winter.
For-sale inventory showed improvement, with an increase among both single-family and condominiums. Buyers, however, remained restrained and took longer to make a decision, leading to more price reductions and lower sales to original asking price ratios than in recent quarters.
Looking Forward: Home buying conditions have recently improved, including lower mortgage rates and more inventory, once again spiking consumer home buying sentiment. Upcoming Bay Area IPOs should also bring some enthusiasm to Lake Tahoe housing markets.
Click here to read the full Q1 2019 Lake Tahoe/Truckee single-family homes real estate report.
Click here to read the full Q1 2019 Lake Tahoe/Truckee condominiums real estate report.
Editor’s note: This report reflects the Northern California areas in which the company formerly known as Pacific Union operates.