Bay Area home sales and prices heat up

If March is, as some real estate agents say, a bellwether for the spring and summer home-buying season, then it could be a hot one in the Bay Area.

The median price paid for all new and existing homes and condos sold in March was $709,000, up 6.2 percent from February and up 9.1 percent from March of last year, according to CoreLogic. The year-over-year increase was the highest for any month since January 2016.

Home sales typically pick up between February and March, as real estate’s busy season gets under way, but this year’s increase was bigger than usual. A total of 7,287 transactions closed in March, up 51.5 percent from February and up 4.4 percent year over year. On average since 1988, March sales rise only 40 percent between February and March. Last month’s sales, however, were still almost 15 percent below the long-run average for the month of March, CoreLogic said.

“It was a fairly strong start to the spring-summer homebuying season,” said Andrew LePage, a CoreLogic research analyst.

One caveat, though, is the weather.

The relentless rain might have depressed activity during the winter. Year-over-year sales were down almost 10 percent in December, flat in January and down 2.4 percent in February. Sales that might have taken place during the winter could have been pushed into March, LePage said.

Jim Tierney, a principal at Net Equity Real Estate in San Mateo, said he had several clients postpone putting their homes on the market because they couldn’t do landscaping or painting. With the rain tapering off, “we are seeing it pick up a little in the last couple weeks,” he said.

Sales and prices were up month over month and year

over year in almost every Bay Area county. One exception was San Francisco, where the median price was down 5.2 percent since February and down 4.3 percent since March of last year. Sales were also down about 5 percent year over year, but up 44.5 percent from February.

San Francisco’s numbers have been volatile because of a building boomlet, mainly of luxury condos. Developers generally begin selling units long before construction is completed, but sales are not recorded until the building is ready for occupancy and buyers close escrow. So sales often close in clumps.

In San Francisco, only 68 new homes and condos closed last month, compared to 107 in March of last year. And their median price dropped to $939,000 from $1.15 million last year. Resale condo sales and prices also declined year over year, though by much smaller percentages.

But if you look only at single-family homes in San Francisco, sales were up 7.4 percent year over year and prices were up 4.7 percent, LePage said.

Despite the March rebound, the Bay Area is still plagued by a shortage of homes for sale.

“In all of San Mateo County, there were less than 500 listings (including some commercial properties) at one point,” Tierney said. “Our inventory has just been really low. It has built up a little, yesterday it was up to 640-some-odd listings. It’s a relatively small number and demand has not backed off.”

Dominique Stevens, a mortgage broker at Mayfair Mortgage Advisers in San Rafael, said she is seeing more people move out of the Bay Area but keep their house here as a rental: “They are getting $4,000, $5,000, $6,000 a month for modest homes. That helps them with retirement income.” She is also seeing grown children who inherit homes, instead of selling them, renting them out “and getting really healthy rental income.”

This is happening mainly in Marin, the Peninsula and San Francisco. In the East Bay, it’s more common for people who move out to sell their homes. “There is a frenzy of sales in Fruitvale and Jingletown,” she said. “That whole area (of Oakland) is really going to be reinvented in the next five or 10 years. When you drive in an area that was downtrodden and you start to see yoga studios, you know something is up.”