East Bay Real Estate Market Report
October was another frenzied month; no sign that November is slowing
Hot October: This Walnut Creek Eichler was listed for $1.285M and went into contract nine days later for $1.5M.
Wondering when this bullet train we’re riding – that’s what we call the East Bay real estate market these days – will slow its roll? Don’t hold your breath. Although home sales historically drop off during presidential elections and holiday seasons, we all know that 2020 isn’t behaving like any other year.
This November follows a supercharged October. We saw terrific trends for home sellers and rough realities for first-time buyers. (Read on, dear buyers, because we have helpful tips for you.)
The housing market continued to be fueled by low mortgage rates, low inventory, and a pandemic-related migration with folks ditching Silicon Valley and San Francisco in search of bigger homes and yards that better suit their work- and learn-from-home COVID-era lifestyles. East Bay-ers have been on the move, too. Our clients in relatively dense cities like Oakland headed for the hills of Contra Costa County while other residents decided to leave California altogether for open spaces and lower living costs, like Tahoe, Colorado, Oregon, Texas, North Carolina, and even South of the Border.
If you’re wondering how all this home buying is possible during a recession, we can tell you that it’s mostly affluent buyers who are closing these Bay Area deals. The median sales price of a single-family home in the Bay Area reached $965,000 in September, near 2018 peak levels, according to a recent Mercury News report based on DQNews and CoreLogic data.
Here are the East Bay real estate market trends for October:
Photo Credit: Abio Properties REALTOR® Mariah Bradford
October’s Happy Home Sellers
- Median sales prices rose for detached single-family homes in October 2020 compared to October 2019 in the 15 cities we track in Alameda and Contra Costa counties.
- Orinda home prices especially soared from $1.52 million to $2.22 million year-over-year (YOY). But that doesn’t mean Orinda was the most expensive city…
- Alamo had the highest median sales price this October, at $2.5 million.
- Homes sold faster in nearly every city YOY. In Lafayette, sales closed 56% faster this October compared to last, in just 17 days on average.
How We Know the Sales Engine Isn’t Slowing
By studying the number of homes with pending sales (under contract but not yet closed) at the end of October, we can predict there will be a surge of done deals in November.
- In Alameda County, 50% more detached single-family homes had pending sales YOY. In Contra Costa County, 84% more homes went into contract YOY.
- In Oakland alone, a staggering 286 homes went into contract this October.
- Check back here in November, when we’ll show you how these sales played out and how they continue to affect our local housing market.
No. 1 Challenge for Home Buyers: Going, Going, Gone!
Buyers need to be nimble and fast, advises Abio Properties associate broker Diana Smith. “The number of days that a home is listed for sale before it goes into contract continues to shrink. In Alameda County, homes are selling on average in 18 days. In Contra Costa, they are gone in 16 days,” says Diana.
In fact, buyers are routinely seeing “offer due” dates after just 7-10 days on the market.
We have three pieces of advice for today’s buyers in the East Bay real estate market:
- Explore up-and-coming cities like Martinez, where the median sales price this October was $701,000. It recently was named one of California’s 50 safest cities, by the way. Read more about Martinez’s rising real estate star in our previous post here.
- Follow the advice Abio co-founder Linnette Edwards recently shared with the Realty Times: “I remind my first-time buyers it takes three important P’s – patience, persistence, and positivity – to be successful in today’s home search.”
- Get our tips on how to be totally prepared to bid on a home before you start your property search in earnest.
No. 2 Challenge for Home Buyers: List Prices Can be Deceiving
- Buyers in Alameda County paid on average about 13% over the list price, and in many cases paid 20% or more. It’s standard practice for agents to intentionally price a home below the market value to spark interest.
- Curiously, on the other side of the tunnel in Contra Costa County, agents usually price transparently. The average home there sold for just 3.5% above the list price in October.
Will Election Results Impact the Housing Market?
With all the curveballs that 2020 threw at us, we’re not ready to predict what 2021 will bring. But we can tell you two key issues President-elect Joe Biden discussed on the campaign trail:
- Biden has promised to help first-time homebuyers with up to $15,000 in tax credits when they purchase a property.
- Prosperous sellers might, maybe, perhaps will have to say goodbye to certain capital gains tax breaks. Biden pledged to eliminate 1031 “like-kind” exchanges for real estate investors whose annual income exceeds $400,000. The current IRS tax code allows property sellers to defer paying capital gains taxes after selling a property if they reinvest their profits in a similar property within a certain timeframe. Why so many hesitant italics at the start of this paragraph? Well, the real estate industry lobby won’t go quietly, and there are a lot of opposing lawmakers who believe in the 80-year-old tax code’s role in keeping real estate markets liquid.
Curious about Condo Sales?
The news was mixed for the East Bay condo market…
- Median sales prices rose in several cities, including Alameda (10%), Oakland (12%), Hayward (16%), and Martinez (23%) YOY.
- Median sales prices dropped most notably in Albany and Berkeley by a staggering 26%. In Berkeley, a condo or townhome that sold for $920,000 last October went for $677,500 this October.
- While price growth was a mixed bag, the market moved steadily forward. The number of pending condo sales remarkably increased 91% in Oakland, nearly 140% in Pleasant Hill, 155% in Alameda!
What’s happening in YOUR city? Here are the numbers…
The following data is for detached single-family homes. Sources: Bay East Assoc. of Realtors and Contra Costa Assoc. of Realtors.
Contra Costa County
Don’t see your city listed in this East Bay real estate market report? Get in touch and we can help you. Contact Abio Properties at 888-400-ABIO (2246) or firstname.lastname@example.org.