Deciphering the Bay Area Real Estate Market Trends

At a great luxury portfolio seminar yesterday and San Francisco many interesting details were discussed. Most of the focus was on the San Francisco real estate market which ultimately affects our East Bay market.

-In 2006, 82%  of condos sold for under $1 million

-In 2017,  only 12% of condos sold for under $1 million

What is happening right now?

The current market prices are going 120 miles an hour and now into hyper drive. There is a mismatch between what people want, what is available, and what they can afford. Our market is impacted by unemployment, rents, and inventory. While the Bay Area market is currently one of the strongest markets in the nation, it is still subject to external factors such as earthquakes,political events, our current president, and the economy of other countries such as China.

Buyers are migrating to different neighborhoods which are more affordable. We are seeing buyers coming from the south bay, Marin, and San Francisco to buy something in the East Bay. Many neighborhoods are changing and boundaries are stretching – what used to be considered unsavory neighborhoods are now labeled as transition neighborhoods such as the Tenderloin in San Francisco and Jingletown and West Oakland in Oakland

Supply and demand factor

San Francisco has a huge demand – there has been a huge job growth but people's income is not growing as fast as the prices for homes.

Baby  boomers want to help their children by something and it's a better investment than the stock market

-30 to 40% of offers are all cash.

In summary- Where is the inventory?

We are living in a world of single family residence scarcity. In San Francisco, only 35% of sales this year were single family residences. Maybe we should all consider living on house boats?

Sheila Sabine is a business woman, multi-dimensional artist, and Senior Sales Associate at The Grubb Company.

ssabine@grubbco.com