Sales Pick Up, But Where Are the Sellers? (March 2011 Insider Report)
Howdy Bay Area Redfin Fans!
Bay Area buyers are getting serious as sales volume was up, really up, across all the counties that Redfin tracks, with some counties even ahead of 2010 levels. Paradoxically, even as sales were surging, the number of homes for sale dropped from February to March everywhere except for San Francisco.
Since we last wrote you, we launched a big new feature on our website called Agent Insights; our own agents take notes on listings as we conduct buyer tours, then share these notes with our other customers on our website. To see what we think of a home before you drive out to see it in person, just click on any starred listing.
And we’re still hiring on all fronts for Bay Area real estate folks as well as software engineers.
Now let’s dive into the numbers!
Sales Take Off Like a Rocket
In every county, sales volume increased from February to March, erasing the declines we saw in December and January. Except in Marin and San Mateo sales are below last March. But keep in mind that 2010′s numbers may have been artificially inflated; buyers were racing to get under contract to secure the home buying tax credit that expired at the end of March 2010, which pulled a lot of demand forward.
| County | Compared to Feb. 2011 | Compared to Feb. 2011 Adjusted for # Weekdays |
Compared to March 2010 | Compared to March 2010 Adjusted for # Weekdays |
| +31.4% | +14.2% | -7.0% | -7.0% | |
| +33.3% | +15.9% | -1.2% | -1.2% | |
| +52.3% | +32.4% | +16.5% | +16.5% | |
| +52.3% | +32.4% | -7.5% | -7.5% | |
| +46.4% | +27.3% | +6.3% | +6.3% | |
| +41.8% | +23.3% | -2.3% | -2.3% |
Change in # of Houses That Sold in March 2011
Median Prices Up Across the Board
Prices increased across the board since February, with the biggest gains in San Francisco and Marin counties. However, prices are still below the levels we saw last March.
| County | Median Price in March 2011 |
Median $/SqFt Change since Feb. 2011 |
Median $/SqFt Change since March 2010 |
| Alameda County | $400,000 | +7.5% | -2.6% |
| Contra Costa County | $255,000 | +1.4% | -4.7% |
| Marin County | $784,000 | +16.1% | -0.3% |
| San Francisco County | $740,100 | +11.7% | -2.5% |
| San Mateo County | $687,000 | +7.3% | -3.6% |
| Santa Clara County | $545,000 | +9.3% | -0.9% |
Change in Median Price of Houses That Sold in March 2011
Biddings Wars the Norm
Unfortunately for buyers, bidding wars are now the norm across most of the Bay Area.
On the Peninsula specifically, Palo Alto, Cupertino, Mountain View, Los Altos and most of Sunnyvale remain super hot with the majority of our buyers facing competition. “We’ve been in multiple-offer situations for almost every offer I have submitted over the past month,” reports Peninsula agent Martin Garcia. “Many of those homes ended up selling above list price.” Martin was also surprised to see multiple offers spreading to new areas, like Santa Clara and San Jose.
We’re also seeing listing agents in Palo Alto consistently pricing homes well below market in order to drive traffic and multiple offers. Brad Le, leader of Redfin’s Peninsula team, had clients who went as far as giving the sellers three extra months in the home — rent free — in order to seal the deal in North Palo Alto. Another example from Brad was a very competitive situation that we didn’t win on a home listed for $998K. His clients offered $1.13M, but the winners paid $1.25M in cash.
San Francisco agent Kiesha Stephens notes that in February and March, buyers were bidding up only the nicer homes. But as competition amongst buyers has gotten fierce, she is now seeing multiple offers on TICs and fixer-uppers. A few weeks ago, buyers would tour these homes and move on, confident that they could swoop back in later without risk of being outbid. Times have changed.
San Francisco Bucks the Inventory Trend
The inventory of homes for sale was down across the Bay Area, except in San Francisco; the city saw a reasonably large jump in new homes on the market.
| County | Compared to February 2011 |
Compared to March 2010 |
| Alameda County | -0.8% | +9.8% |
| Contra Costa County | -2.0% | -2.3% |
| Marin County | -0.6% | -25.4% |
| San Francisco County | +6.5% | +1.0% |
| San Mateo County | -2.1% | -4.1% |
| Santa Clara County | -9.9% | -21.3% |
Change in # of Houses for Sale on March 31st 2011
Amber Zahn, one of our East Bay agents, says that “buyers are frustrated with the lack of inventory and hopeful that the months to come will provide some much-needed relief.”
When can we expect that relief? In San Francisco, Kiesha expects a surge of listings after homeowners get through tax season. Sean Sullivan, who works alongside Kiesha, agrees. He also points out that many sellers got their homes ready in February and March, and have just been waiting for nicer weather to make the perfect debut.
Elsewhere, especially in school-center areas, we expect to see an increase of listings in late May and June; parents don’t want to put their house on the market until their kids are out of school.
Be Cautious With Flips
March in South San Francisco and South Bay has seen more flipped homes, as well as greater buyer interest in those homes. Regina Puzon, our agent in South San Francisco, explains: “These are houses that investors buy on the courthouse steps with cash, invest a little money in, and then put back on the market. They’re attractive to buyers because they’re priced competitively, and the investors spend more to fix them up than banks are spending on comparable REO homes.”
If you’re interested in a house that has been flipped in less than 90 days, be aware that FHA financing can be tricky. Even though the FHA extended a waiver of its anti-flipping rule, many banks won’t finance a purchase on a house flipped in less than 90 days, which forces many of our buyers to wait until the 91st day to write-up their contracts. Buyers also need to be careful with flipped homes that have appreciated more than 20%; for these homes, you must get an itemized list of improvements, with receipts.
That’s our take on Bay Area real estate for this month. For numbers on every Bay Area neighborhood, download our big spreadsheet. To learn more about how we calculate these numbers, check out our methodology page. Questions or observations? Just leave a comment below.
As always, thanks for supporting Redfin.
Matt Goyer, Redfin Analytics Team
