The Bay Area Real Estate Report - September/2017
The median price of a single-family home in the 9-county Bay Area rises to over $800,000, attaining a new record high for the region and a 10.1% Year-over-Year gain
Amid historically low inventory levels and mortgage rates which recently dropped to a 2017 low, the median price of a single-family home in the 9-county Bay Area has recently risen to $804,000, up 10.1% year-over-year, matching pace with the level of gain realized the previous 2 years. The continued (moderate) rise in Bay Area home prices continues to be fueled by record low inventory and low interest rates which have recently fallen back to 2017 lows.
For Santa Clara County, the median home price is up to $1,097,000, a 11% year-over-year gain. San Mateo County’s median home price is up to $1,310,000, a 4.8% year-over-year gain, while Alameda County’s median home price is up to $825,000, a 11.2% year-over-year gain, and Contra Costa County’s median home price has risen to $585,000, up 8.3% year-over-year. San Francisco (where 12% of residents can afford to purchase a median-price SF home), San Mateo (14%), Santa Clara and Santa Cruz counties (17%), and Alameda County (19%) continue to be 5 of the 7 least affordable counties in California.
Looking at the latest sales volume and inventory movement figures, Bay Area Residential property sales volume was up 8% in August vs July, but down 3.5% year-over-year. As far as inventory levels, current Bay Area Residential inventory is up 5.7% vs a month ago, but down 25.5% year-over-year and still, by far, at the lowest level in modern Bay Area history for this time of year. Sales volume and inventory levels typically “decline” gradually between August and December, so the “rise” in August sales volume and inventory was a bit of break from the norm and a sign that Bay Area home buyers are staying with it in full force, despite record low inventory and record high home prices.
The economy is, of course, a big factor in sustaining the Bay Area’s high and ever-rising property values. According to a recent Labor Department survey, U.S. job openings recently soared to a record high, as employers across the U.S. posted a record 6.2 million job openings at the end of June, an indication that the labor market is still on track. The number of job openings climbed by 417,000 in June for private employers and by 44,000 for government postings, which includes state and local government. While the unemployment rate for California is at 4.8% right now (up slightly from 4.7% in June), 4 Bay Area Counties (San Francisco, Marin, San Mateo, and Santa Clara) are below 3% and the 9-county Bay Area added 21,000 jobs in July, its strongest showing of 2017.
Whether it’s the recent drop in mortgage rates (matching previous 2017 lows), the steep rise in rent prices (making “buying” more attractive), or the sustained (although “moderate”) growth of the Bay Area economy, many who are choosing to stay in the Bay Area long term are still out there in droves as motivated Buyers. This is despite record high home prices which have continually achieved new record highs the past couple of years and despite ever-limited options due to record low inventory. Barring any unforeseen major changes in the economy or mortgage rates, our inventory should shrink further between now and December (as is normal for the Fall and early Winter) and property values should thus continue to rise at a moderate pace.
Mortgage Rate News - September 2017
Freddie Mac reported late last week that the 30-year fixed mortgage rate dropped to a year-to-date low for the 3rd consecutive week. The average rate for a 30-Yr home loan now stands at 3.78%, down from 3.82% the week before — although up year-over-year from 3.44% at this time last year.
For a primary residence mortgage (assuming 20% down payment/equity), a typical 30-Yr Fixed Conforming Loan (w/0 Pts) is now at about 3.625%, while the typical 30-Yr fixed High Balance Conforming Loan (w/0 Pts) is at about 3.875%, and a typical 30-Yr Jumbo Loan (w/0 Pts) is at about 4%
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