North Bay real estate market improves in May as remote workers shop the suburbs
Despite state and local shelter-in-place orders slamming the door on April home sales by at least 30% across California, North Bay real estate in the first part of May is experiencing a window of opportunity in number of sales and median prices.
The metrics released by the Compass real estate brokerage firm in the Wine Country indicates a dramatic turn upward from the end of April to May 17 for Marin and Sonoma counties. The Napa market was about the same.
Sonoma County has picked up at least 50 more listings on which offers have been made since April 27. Marin has almost doubled its number of homes listed, while Napa represents more of a seesaw recovery. Agents were allowed to first show vacant homes and now may bring prospective buyers into occupied ones.
Median sales prices have also stayed strong in the North Bay. Marin, Napa, Sonoma and Lake counties show a slight dip last April compared to March, the California Association of Realtors reported Monday. The only exception was Solano County, where listings have consistently gone up from year to year in April to $657,000 in April, the latest figures reveal.
According to the association, which represents 200,000 agents and brokers, the statewide median this April was $606,410 - down by about $12,000 from the month before, but up about $3,000 from the prior year.
“As expected, California home sales experienced the worst month-to-month sales decline in more than four decades as the coronavirus pandemic prompted stay-at-home orders, which kept both buyers and sellers on the sidelines,” association President Jeanne Radsick said in a statement.
The Bakersfield-area agent, who works in a city outperforming the rest of the state in affordability, warned the housing market could remain sluggish up and down the state.
However, the San Francisco Bay Area represents its own microcosm of the real estate world. Although its decline in home sales was lower than the state, the median price stayed high at $980,000 in April.
“We came into the year looking very strong,” said Compass agent and broker Carol Lexa, president of the North Bay Association of Realtors. Lexa provides the multiple listing service (MLS) data through the Bay Area Real Estate Information Services (BAREIS).
While January traditionally represents a slow month for real estate sales, 2020 ushered in a more favorable February than last year because of Mother Nature. In 2019, a deluge of winter storms kept people from listing or looking.
“People don't want to put their houses on the market in the pouring rain,” Lexa said.
With the pandemic, “the whole world came to a stop,” she said. At first, real estate was not deemed an essential business. It later made the category in early April. But the various counties imposed different rules, leading to widespread confusion.
“We went through a baffling five weeks,” she said.
Consequently, the San Francisco Bay Area saw a 37.4% decline in home sales - the biggest drop in over a decade from March to April 2020 of 2020.
Since then, the housing market has been gradually progressing, according to Lexa.
“Buyers had to feel confident to come back,” Lexa said.
Lexa remains optimistic given certain trends that have emerged during the crisis.
For example, she said, many tech workers have discovered they can live anywhere, getting a taste of working from home during the pandemic. Some would relish the opportunity to live in more of a natural environment like the one the North Bay has to offer, Lexa noted. Since the pandemic began, Lexa has received interest from prospective buyers on the East Coast.
If you build the inventory, will they come and buy?
"It's all really totally dependent on what the virus does. If we can keep the virus at bay and keep the (cases) down and people live by the protocols, then I think we look pretty good,” she said.
As the market picks up steam in late spring and early summer, Lexa anticipates the absence of the traditional slowdown of activity in July and August since people won't be vacationing as usual.
“It's possible we won't have any quiet months,” she said of the summer season.
Other factors that help spur activity include plummeting interest rates to 3.23% for a 30-year fixed loan as of April 30. By contrast, rates averaged about twice that in 2007.
“This makes a huge difference, but they won't stay that way,” Lexa insisted.
The coronavirus outbreak has both closed and opened doors for the North Bay housing market.
“People are leaving San Francisco and Silicon Valley and moving away. What the virus has done has thrown everyone into a ‘change' mode. Real estate is one thing you change,” she said, equating change to surroundings.