Housing Bubble?

[Fernando]

MSN

Home sales drag across U.S., while Bay Area is nation's hottest market​

Home sales this spring have been dragging in most U.S. housing markets compared to last March — dipping 2.4% nationwide.

But, of course, the Bay Area's housing market has never been like the rest of the country's.

In March, the region posted the biggest leap in annual home sales in the U.S., highlighting the relentless demand among buyers, despite the economic uncertainty that has dulled enthusiasm elsewhere.

"The Bay Area, with its strong economy, is not as vulnerable to high mortgage rates or market fluctuations," said Daryl Fairweather, chief economist at Redfin, the online real estate brokerage.

The boost in sales comes as hundreds of sellers decided to list in March, raising inventory across the Bay Area by 35% from last year. New listings rose 19.3% in Oakland, 17.3% in San Jose and 12.6% in San Francisco.

That's despite high interest rates, which have hovered around 7% and kept homeowners from wanting to give up their 3% pandemic-era interest rates to move.

"The lock-in effect is finally starting to wear off," Fairweather said.

The increase in available homes has kept prices steady in much of the Bay Area, according to the California Association of Realtors. The median sales price in March rose just 1% from last year to $1.4 million. The median price was $907,0000 in Contra Costa County, $1.38 million in Alameda County, $1.7 million in Marin County, $1.8 million in San Francisco, $2.1 million in Santa Clara County, and $2.3 million in San Mateo County. Santa Clara, with its booming artificial intelligence industry, had the biggest price gains of those six counties, increasing 11.3% from last year.

Many buyers in the Bay Area aren't even reliant on a mortgage — in San Francisco, 26.5% of buyers bought in all cash, and in San Jose, it was 18%, according to Redfin.

Homes are still selling quickly. Single-family homes spent a median time of just 13 days on the market in the Bay Area — the least amount of time for any region in California. Still, that number varies from county to county: homes in Santa Clara County sold in a median of eight days, whereas they spent 49 days on the market in Marin County.

Fairweather, the Redfin economist, said that return-to-office policies among Silicon Valley tech companies are driving the stronger market in San Mateo and Santa Clara counties. Bay Area white-collar workers are spending about three days a week in the office, recent survey data shows.