Real Estate Update
The Bay Area’s luxury housing market, which has been soaring for the past year or more, is finally showing some signs of leveling off as summer rolls on. While there are no indications that the high-end market is reversing course, even a move back to a more normal balanced market could provide welcome relief for frustrated buyers in this very competitive marketplace.
San Francisco’s luxury home prices were flat in the second quarter of 2016 while a continuing shortage of homes listed for sale led to a sales decline compared to a year ago, according to a recent market report by Coldwell Banker Residential Brokerage. The report is based on Multiple Listing Service data of all homes that sold for more than $2 million during the last quarter in San Francisco.
The median sale price in the city was $2.8 million, up from $2.7 million in the first quarter of this year but exactly the same as a year ago. Sales of luxury homes fell once again in the latest quarter compared to the same period last year. There were 211 transactions in the second quarter of 2016, down 14.9 percent from the 248 sales a year ago.
Bay Area Luxury Market Showing Signs of Leveling Off
Other recent Coldwell Banker Residential Brokerage luxury market reports showed similar stories elsewhere in the Bay Area:
- East Bay luxury sales and prices (over $1.5 million) were both relatively flat in June from year-ago levels. A total of 182 luxury homes changed hands, down 1.6 percent from June 2015. The median sale price was up 1.6 percent from a year ago, reaching $1,778,000. June’s median sale price was down fractionally from May, when it stood at $1.78 million.
- Silicon Valley’s luxury housing market (over $2 million) saw home sales off slightly and the median sale price down fractionally compared to the same month a year ago. A total of 158 luxury properties changed hands in June, down 4.8 percent from June 2015. June’s sales total was also off from May, when it stood at 173 units. The median sale price dipped less than 1 percent from the same month last year to $2,597,500.
- Marin County was the exception in June. There were 92 luxury sales (over $1.5 million), up 15 percent from the 80 transactions in June 2015. Meanwhile, the median sale price dipped to $1,957,500, a 6.6 percent decline from a year ago. Last month’s median price was also down from May’s $2.3 million price.
Buyers Are More Selective
Reports from our offices show a little more inventory coming on the market and homes taking a while longer to sell, especially if they aren’t in move-in condition, in the best locations, or priced appropriately. Buyers are becoming more selective, and properties that sell with a large number of multiple offers is the exception instead of the rule these days.
But make no mistake: The Bay Area’s luxury housing market – like the overall market – remains quite strong and healthy. And in fact, it is still a seller’s market in many communities. But more recently the pendulum has started swinging back towards a more balanced market between buyers and sellers.
We’ll see if this trends continues in the weeks and months ahead. But if it does, it’s not bad news at all. A more balanced housing market would be much healthier and sustainable for the market over the long run. And that can only be good for buyers and sellers.
— by Coldwell Banker San Francisco Bay Area President Mike James; compliments of Anne Dautun Laury, Luxury Real Estate Broker, Coldwell Banker