During March 2021 in the Greater Bay Area, the median single-family home price rose to another all-time high. Year-over-year, Greater Bay Area prices increased considerably, up 21%.
Prices in every region and county were up in March. The North Bay, East Bay, and Silicon Valley reached all-time highs in March. San Francisco is still slightly off peak prices for single-family homes. The sustained price appreciation emphasizes the demand in the area.
As you can see in the graphs below, median condo prices were mixed across regions and counties. North Bay condo prices declined month-over-month, while the rest of the Bay regions rose slightly.
Single-family home inventory began to climb over the last two months in anticipation of the spring season, when more sellers typically come to market. In 2020, fewer people wanted to leave the Bay Area and more people wanted to move there, which drove inventory down to record low levels. New listings, therefore, improve the current market conditions. Since the start of 2021, more homes than usual have come to market, causing inventory to rise. However, inventory is still low, especially in relation to demand, and the sustained low inventory will likely cause prices to appreciate throughout 2021.
Both single-family homes and condos are selling quickly. As we will see, the pace of sales has contributed to the low Months of Supply Inventory (MSI) over the past several months.
We can use MSI as a metric to judge whether the market favors buyers or sellers. The average MSI is three months in California (far lower than the national average of six months), which indicates a balanced market. An MSI lower than three means that there are more buyers than sellers on the market (that is, it is a sellers’ market), while a higher MSI means there are more sellers than buyers (that is, it is a buyers’ market). In March 2021, the MSI fell below two months of supply for single-family homes, indicating that the market strongly favors sellers.
In summary, the high demand and low supply present in the Greater Bay Area have driven home price appreciation. Inventory will likely remain low this year with fewer sellers coming to market, potentially lifting prices higher. Overall, the housing market has shown its resilience through the pandemic and remains one of the most valuable asset classes. The data show that housing has remained consistently strong throughout this period.
We anticipate new listings to accelerate into the summer months. The current market conditions could withstand a high number of new listings coming to market, and more sellers could enter the market to capitalize on the high buyer demand. As we enter the spring season, we expect the high demand to continue, and new houses on the market to be sold quickly.
As always, we remain committed to helping our clients achieve their current and future real estate goals. Our team of experienced professionals are happy to discuss the information we’ve shared in this newsletter. We welcome you to contact us with any questions about the current market or to request an evaluation of your home or condo.
Our team is committed to continuing to serve all your real estate needs while incorporating safety protocol to protect all of our loved ones.
In addition, as your local real estate experts, we feel it’s our duty to give you, our valued client, all the information you need to better understand our local real estate market. Whether you’re buying or selling, we want to make sure you have the best, most pertinent information, so we’ve put together this monthly analysis breaking down specifics about the market.
As we all navigate this together, please don’t hesitate to reach out to us with any questions or concerns. We’re here to support you.