The search for Bay Area homes is pushing further into the suburbs—that’s according to a recent news report examining burgeoning buyer interest in “bedroom communities”. From homes in Castro Valley to plots in Sonoma County, the growing attention for commuter towns stems from soaring prices and shrinking inventories closer to work. The result might be a “warm” winter for inland real estate.
But do the numbers support this?
For the sake of argument, we’ve taken a closer look at homes in Castro Valley. The community’s close proximity to several freeways and employment epicenters makes it a prime candidate for buyers interested in affordable housing and sensible commutes. It also happens to have some of our favorite neighborhoods to work in.
In October, the town’s median sale price dipped from the previous month’s record high of $735,500. Yet at $700,000, home prices remain at one of their highest points in recent years and continue to outperform previous year-over-year figures. Examining the preceding years of data, we also find that the average Castro Valley home sells below asking price more often than not. There are several reasons for this trend, but what is important is that the “gap” actually closed in October.
Meanwhile local supply continues to shrink despite being well into the fourth quarter. To put it in perspective: At 0.9 “months”, current inventory is less than 70% of October 2013’s levels and not even half of October 2014’s. That shortage should continue to drive housing prices so long as buyers continue to demand homes.
I bring these factors up because they all coincide with recent reports published by both the California Association of Realtors and CoreLogic (a company specializing in real estate data). The C.A.R. document showed a sharp increase in the number of properties selling for list price—an indicator of movement towards a healthy, “normalized” market. Meanwhile CoreLogic noted that, since 1988, Bay Area home sales temporarily shrink by almost 11 percent heading into the winter months. But this year? The drop was only 3.4 percent.
According to the C.A.R., while California’s housing market cools slightly, more homes are closing for the asking price (and fewer are closing below).
UPDATE: As of December, the data still supports a warm winter for East Bay real estate. In fact, the median closing price of homes in Castro Valley has actually climbed an additional $10,000 — and homes are selling as fast as they did back in July!
Combine that with the observation that housing prices continue to rise across the Bay Area and it’s easy to see that homeowners have a pretty fantastic recipe for getting their home sold at the beginning of next year. However, as some experts point out, a slowdown in the growth of housing prices—even with an otherwise healthy market — will spur many homeowners to “jump off the fence” and sell before they think it’s too late.
If you feel like you’ve been waiting forever for the right moment to sell your home, Lifestyle Real Estate Services wants you to know that now is the perfect time. We’re experts at ensuring you take full advantage of prime market conditions and maximize returns on your hard-earned equity! So what are you still waiting for? Contact us today!