Bay Area housing prices soar along with demand

The median price paid for a Bay Area home hit $755,000 in May, a third consecutive monthly record, as scorching demand continued to outstrip supply.

The median price, which includes new and existing homes and condos in the ninecounty region, was up 0.7 percent from April and 7.1 percent from May of last year, according to a CoreLogic report released Thursday.

In San Francisco and San Mateo counties, the median price reached an identical $1,207,500 (although CoreLogic had to estimate San Mateo sales for the last two weeks of May).

The San Francisco market “turned into a feeding frenzy (in May), the hottest market since spring 2015, driven by very strong demand, which came roaring back, and a deeply inadequate supply of listings,” Patrick Carlisle, chief market analyst of Paragon Real Estate Group, said in an email.

The market for homes under $1.8 million “was particularly crazy,” he said. In the Sunset District, the average home sold during the last three months went for 22 percent over asking. “The fact that interest rates have declined since the

first of the year, and that people are afraid of coming increases, may be playing some role in pressurizing demand,” Carlisle said.

A home at 58 Lapidge St. in the Mission District that was last remodeled in the 1950s (and looks every bit the part) sold for $2,325,000, which was almost $1 million, or 72 percent, over the listing price.

“We played up the retro cool factor,” said listing agent Michael Minson of Keller Williams. “The range is unlike any range I have seen before. The soap dispenser in the bathroom — you push a button and it disappears into the wall. It was super cool, but everything was old.”

The home has four bedrooms, two bathrooms, parking, a yard and an unfinished attic and basement, but what really sold it was the location — near hip restaurants and less than two blocks from Dolores Park, Minson said.

The home received 29 offers — about a third from builders, a third from investors and a third from prospective homeowners. The sellers grew up in the home and were determined to sell to another family, Minson said. Fortunately, a family submitted the highest bid.

The sellers “were definitely shocked at the price. Everyone was. It was an outlier,” Minson said. Most homes are getting two to five offers.

San Francisco “is a tale of several markets,” Coldwell Banker agent Joel Goodrich said. While Pacific Heights, Russian Hill, Noe Valley and the Mission remain strong, “the big inventory of new South of Market condos” is putting pressure on older condos.

The website SocketSite highlighted a Hayes Valley condo and a high-end home in Cow Hollow that just sold for roughly the same price they fetched in 2014.

San Mateo County saw the biggest price increase over last year — 17.8 percent. “Demand is being driven by the incredible job demand, not just in high tech but in biotech,” said Coldwell Banker agent Jeff LaMont. The county is home to Genentech, Gilead Sciences and biotech clusters in Brisbane and South San Francisco.

Home buyers are also attracted by proximity to the airport and the county’s public schools. Millbrae, San Carlos and Burlingame are among the county’s hottest spots, LaMont said.

He listed a four-bedroom home in Millbrae Meadows last month for $1,250,000. It attracted 11 offers (all with no contingencies) and sold for $1,555,000 in eight days.

Losing bidders “need to dust themselves off and move on to the next one,” LaMont said. “I tell my buyers, you don’t want to fall in love with a house. You can fall in like with a house.”

Somtimes, they get lucky. An engaged couple he represented closed this week on a home in Daly City. Neither works in tech or biotech. There were 10 offers, theirs was second-highest, but $30,000 below the top bid.

The sellers “were first-time home buyers when they bought it nine years earlier” and were probably persuaded by the fact that his clients were also first-time buyers. “We had our proof of funds, a (mortgage) preapproval letter. I had my clients write a tugging-atthe heart letter.” They included a photo of themselves and their dog.

“I know it’s corny. I say lay it on thick,” LaMont said. “Sometimes that doesn’t matter. Sometimes all (the sellers) care about is the price.”