If you’ve been following the news in Bay Area real estate, you might have heard that home sales have been dropping. A Pacific Union article attributed the root of this trend to inventory shortages and a lack of “move-up” buyers. The reasoning makes sense: Fewer homes are sold when there are fewer homes on sale, and there are fewer homes for sale because fewer homeowners are comfortable selling their current home and trying to find a bigger or better one (“moving up”). In this climate, housing prices continue to climb ever higher, sidelining buyers and impacting sales.
A perfect example of this can be found in July’s data for Oakland, where there has been a 14% year-over-year price increase but a 13% decrease in total sales. In Pleasanton, prices are up 7% and yet sales are down a whopping 23%. Even San Francisco saw its sales drop 4.6%.
But back in May, I wrote about how Livermore’s real estate market was showing signs of avoiding these growing trends: Prices were consistent, inventory was slowly growing, and “days on market” figures were steady and reasonable. In effect, The Livermore housing market was one of those rare places in the Bay Area that had the potential to satisfy both sellers and buyers—especially under the prevailing market conditions.
Looking at July’s numbers, it appears that the trend has maintained its trajectory. For sellers, the median sales price remains at one of the highest levels seen in recent years ($680,000, which is an 8% appreciation over this time last year) and the typical home still takes less than three weeks to close. When compared to the diminishing sales numbers of other cities, Livermore has even enjoyed a remarkable 27% increase in the number of homes sold compared to July 2014. All of these measures indicate a growing demand for local housing without the distortion of other markets.
But buyers should be interested to know that inventory has continued to grow, as well. Between May and July, the measure climbed from 0.8 to 1.3 “months” — a trend we predicted several months ago. While 1.3 is still firmly inside of “hot seller” territory, it’s well above the 0.6-0.8 averages found in many parts of the Bay Area. And if it’s anything like previous years, it will continue to climb until it peaks in November or December, as well.
Lastly, there is speculation that Livermore’s relatively consistent housing prices make it a low priority area for investors seeking a large, fast payoff. This means that first-time and cash-strapped buyers could encounter less competition from companies with deep pockets and all-cash offers—an especially important factor to consider when searching for homes in the Bay Area.
It’s still too early to tell if this could be the beginning of a return to a “healthier” market balance, but these are things we’re happy to see happening nonetheless and they demonstrate that Livermore remains one of the best places to both buy and sell a home in Northern California. With that in mind, if you believe you’re ready to list or find a property in the Livermore area (and why wouldn’t you?) start off on the right foot by contacting Lifestyle Real Estate Services today!