- Home sales in suburban counties like Marin and Sonoma experienced stunning increases of around 35%
- Sales of existing, single-family homes in July increased 10% YoY; median prices increased by 9.6%
- Dramatic sales increases have occurred in tandem with a major drop in inventory, as the level of new listings hitting the market remains low
- Companies signalling long-term acceptance of remote work has increased demand for single-family homes and condos in outer suburbs
California may be one of a handful of states struggling to contain the number of confirmed coronavirus infections, but its real estate market doesn’t appear to be suffering from the effects. After beating the odds and posting record-high growth in June, realtors and home sellers can breathe another sigh of relief as the market continues to surge. A recent monthly report from the California Association of Realtors (C.A.R) shows that, like June, July represented a month of significant growth and recovery for the real estate market across California.
According to the report, detached home sales in California posted an increase of 6.4% percent year over year. Prices of single-family homes also made a jump from the previous year, with the median price now sitting at $666,320, representing a 9.6% increase from the year before.
To take a deeper look into July’s impressive numbers, the data science team at Roomvu — a real estate marketing and analytics firm — created a detailed breakdown of market activity in July to assess market performance.
Single-family homes are not the only market-segment experiencing positive year over year growth. The median price of condos in California for July sat at $500,000 — 6.4% higher than July 2019 and 2.8% higher than June. With respect to single-family homes, the rise in median prices can be attributed to an increase in the share of high-end home sales as compared with the previous year.
The total number of sales for single-family homes in California was 437,980 units in July 2020, which represents the first time sales passed the 400,000 threshold since the pandemic began in mid-March.
Looking at different regions across California, the story of growth and year in sales rings true in the Bay Area, Southern California, the Central Valley and the Central Coast. But the decline in active listings is stark, which is likely a main driver of the increase in prices.
Median price increases for single-family homes appears to be occurring even at a county level. In the Bay Area, all nine counties experienced year over year growth, with Marin and Contra Costa counties posting the biggest increases. Conversely, San Francisco County is where the lowest increase occurred.
July brought good news regarding the overall number of sales for single-family homes for Bay Area counties as well. While sales in San Francisco County experienced only a modest increase of 1.4%, sales increased drastically in Sonoma, Marin and Napa County.
Here’s a look at year over year sales and median prices of single family homes among all nine Bay Area counties.
- In Alameda County, sales increased by 6.5% from a year earlier, while the median sales price increased by 8.2%.
- In Contra Costa County, sales increased by 15.3%, while the median price increased by 9%.
- In Marin County, sales increased by 35.8%, while the median price increased by 23%.
- In Napa County, sales increased by 28%, while the median price increased by 2%.
- In San Francisco County, increased by 1.4%, while the median price increased by 1%
- In Santa Mateo County, sales increased by 13.5%, while the median price increased by 10%
- In Santa Clara County, sales increased by 12.5%, while the median price increased by 6.3%
- In Solano County, sales increased by 8.7%, while the median price increased by 7.5%.
- In Sonoma County, sales increased by 36.5%, while the median price increased by 9.2%
Patrick Carlisle, chief market analyst for the Compass brokerage firm commented on the situation in San Francisco County — which is much more urban than most of the other Bay Area counties. “The single-family home market in San Francisco is basically similar to last year, but that is not digging it out of the hole made in April, May and June as far as sales,” said Carlisle. “Other markets are doing generally, from pretty well to stupendously crazy, heated insanity,” he added.
But it’s not just the single-family home market that saw positive numbers come out of the July report. Median prices of condos have also gone up on a year over year basis in nearly every Bay Area county apart from Napa. Conversely, Marin and Solano counties have experienced the highest surge in median condo prices.
Condo sales, much like prices, were also generally up in July when compared to the year before. Increases in some counties were dramatic. Napa and Sonoma counties saw increases of 27.3 and 29.5% respectively.
Here’s how condo sales and prices broke down by county in July 2020 as compared to July 2019:
- In Alameda County, sales increased by 3.3% from a year earlier, while the median sales price rose by 4.1%.
- In Contra Costa County, sales increased by 1.4%, while the median price increased by 2%.
- In Marin County, sales fell 3.4%, while the median price increased by 21%.
- In Napa County, sales increased by 27.3%, while the median price decreased by 3%.
- In San Francisco County, sales increased by 6.6%, while the median price increased by 2%
- In Santa Mateo County, sales fell 3.3%, while the median price increased by 3.8%
- In Santa Clara County, sales increased by 10.3%, while the median price increased by 3.6%
- In Solano County, sales increased by 3.1%, while the median price increased by 14.8%
- In Sonoma County, sales increased by 29.5%, while the median price increased by 9.7%.
The performance of Southern California real estate in July only serves to strengthen the notion that the market is now well on its way towards recovery. Sales and prices remain strong, putting downward pressure on active inventories as buyers are competing to grab hold of available properties in the market. Nevertheless, there are some concerns about how long these favorable market conditions can last, as Covid continues to impact livelihoods across the country.
What’s more, as the pandemic created new awareness around coming into close contact with people in confined spaces, offices around the country ceased business as usual and encouraged their employees to work from home when possible. Since commuting has become less of a consideration, buyers appear to be more willing to leave the confines of a big urban centre like San Francisco and move to more suburban areas. This is good news for counties like Napa and Sonoma, perhaps less good for San Francisco.
“We are inundated with people from outside Sonoma County coming up here, from San Francisco, the South Bay, East Bay,” said Coldwell Banker agent Jeremy King, who works mainly in Petaluma. “What buyers want most is more space.”
While there are some concerns that buyers may start to exit the market if these unfavorable economic conditions persist, these fears have been mostly subdued by the market’s roaring performance posted in July. For the moment, it seems clear that the Southern California market should continue to barrell ahead at least for the next few months.