A booming economy has minted crowds of would-be homebuyers, drawn by low interest rates and pushed by rising rents, but the latest home sales report shows they’re stuck once again in a competitive market marked by bidding wars and all-cash buyers, pushing prices ever higher.
And while price increases took a bit of a breather during the late fall and early winter, there’s little sign the hot market that’s causing such pain for buyers will end any time soon.
“Around here, there’s a bazillion buyers, and there’s nothing to buy,” said Colleen Larkin of Thornwall Properties in Berkeley. “I don’t think it’s going to end. The spring is going to be the same.”
Larkin just helped a buyer snag a Victorian with lots of curb appeal in lower Berkeley. The home drew 21 offers, she said.
For homeowners who wanted to sell, it was a great year.
Prices reached all-time highs in San Mateo County in October and Santa Clara County in June, and came within 4.4 percent of an all-time high in Alameda County. Contra Costa County was still 35 percent below its pre-crash peak.
In November, the median price buyers paid for a single-family home in Alameda County was $640,000, up about 12 percent from last year, according to a report Tuesday by real estate information service CoreLogic DataQuick. Contra Costa County buyers paid a median price of $425,000, up only 3.2 percent from a year ago; Santa Clara County saw prices rise 8.1 percent to $800,000, while San Mateo County was up 14 percent to $900,000.
Sales last month were at their lowest level for a November since 2007-08 in the East Bay and South Bay, according to the report. They were down more than normal partly because there were fewer days to record sales — only 17 opposed to a more typical 19 days, the Irvine-based company said.
But sales also were depressed by low inventory, hard-to-get loans and prices beyond the reach of many buyers, according to Andrew LePage of CoreLogic DataQuick.
LePage said he expects demand to continue to increase on strong job and income growth across the Bay Area. “There are also still a lot of people who became renters not because they wanted to, but because they lost their home through a short sale or foreclosure. They’ll be trying to return to homeownership,” LePage said.
Renters Juan Hernandez and Erika Luna of Union City were drawn to buy more by low interest rates than high rents. With a large down payment, they were able to come up with a mortgage payment on their new Union City home that was about the same as their previous rent.
“We have been wanting to buy and saving up for a larger down payment,” Hernandez said. “The lower interest rates kind of motivated us. We got 3.75 percent for a 30-year mortgage.”
The couple lost out to higher bidders on two homes before they bought. “It’s pretty competitive out there,” Hernandez said.
Elsewhere, the pressure has eased a bit.
Their agent, Steve Dhillon of Realty Experts in Fremont, said he doesn’t see as many multiple offers now as he did earlier this year in the Fremont-Union City area. Dhillon thinks a “hyper-seller’s market” has had an 18-month run and is still very strong.
Some agents say the market has gained a head of steam late in the year as buyers continue trying to snag a home before interest rates rise as they are predicted to next year.
“It’s spring in the middle of December,” said Kevin Keiffer of Keller Williams in Danville. “Everything we’re listing is getting multiple offers again. Buyers never went away, they just took a break. That tells me that spring is going to be hot.”
On the Peninsula, “people are paying more and settling for less because they just want to be in the market,” said Jennifer Flores Tasto of Property Services in Burlingame. High rents are driving some couples into the market, she said, and some are armed with cash from parents.
“Boomers are helping out kids, and people understand you have to be ready and competitive,” she said.
Contact Pete Carey at 408-920-5419. Follow him at Twitter.com/petecarey.
