Survey says average Bay Area homeowners are sitting on million dollar assets
By Jesse Gary
Bay Area's hot housing market
The Bay Area's housing market is hot. Jesse Gary reports
SAN JOSE, Calif. - A new survey shows the average Bay Area homeowner is sitting on a million-dollar asset.
Monday in Los Gatos, realtor Joe Velasco hurried to prepare a property for sale. These days, his schedule allows time for two things. Selling seven-figure homes, and developing homes to be shown and sold for seven figures.
"There's a lot of money here in the Valley, in the Silicon Valley and the Peninsula with the high-tech that is ongoing here in the Bay Area," he said.
Despite the COVID-crisis, the median price Bay Area-wide for a single-family home jumped 15% in the past year. It's now slightly over $1 million.
"If you want an exclusive, gated community feel," said San Jose State Real Estate professor Kelly Snider, "…then, we're on track for that."
Houses are also spending less time on the market, moving 46% faster than a year ago, according to a statewide survey.
Sticker shock extends to the East Bay and beyond. Few blink at Alamo's $2.3 million median price. But Walnut Creek is up to $1.4 million, and Milpitas is close behind at $1.3 million.
"Throughout the whole country, we've seen changes in median pricing anywhere from 10 to 20, in some instances 30% of late," said Dr. Brian Marks, an economist at the University of New Haven.
Marks said the same types of behaviors seen in Bay Area home sales, such as bidding wars, are now commonplace.
"What's driving a lot of this movement is the desire, as a result of the public health crisis, to move to areas that are less densely populated," said Dr. Marks.
But short supply means even with a Bay Area exodus, prime real estate commands top dollar.
"I bid at $950,000 over asking price, and I did not get that property," said Velasco.
As prices show no upper limit, some experts said a rethinking may be in order, to keep everyone in the home buying game.
"The very, very likely thing that will happen is a slow flattening of increases. So it may stagnate a little bit," said Prof. Snider.
Snider said we won't see an impact on price until hundreds of thousands of new houses and units are built. That will likely take another decade. So in the short term, continued high prices here, and rising prices elsewhere as people try to find something more affordable.