The East Bay Housing Supply Logjam Easing After Six Years
That’s good news for buyers, but not so much for sellers.
David Stark: There are more choices for buyers.
Photo courtesy David Stark
For nearly six years, a dearth of homes for sale in the Bay Area sent prices soaring as buyers competed for the scant inventory available. Finally, the logjam is easing, experts say — good news for buyers, though not so much for sellers.
The number of homes for sale in Oakland jumped 27 percent in the first six months of 2019 compared with the first half of 2018, to 1,664 homes, according to the Bay East Association of Realtors.
In Albany, the number zoomed 63 percent, to 49 homes for sale in the first half of 2019. Hayward saw a 66 percent increase, to 700 homes, and Fremont an 89 percent increase, to 959. While Berkeley saw an increase, it was a much smaller amount, 6 percent, with 303 homes for sale.
“More homes for sale mean that buyers have more choices and more time to make those choices,” said David Stark, a spokesman for the Realtor association.
In accordance with the laws of supply and demand, the jump in inventory appears to have ushered in a softening of price increases.
In Oakland, the median sale price crept up only 2 percent in the first half of 2019, to $854,000, compared with the first half of 2018. In Berkeley, the median actually dropped 1 percent, to $1,316,500. Past years have seen double-digit price increases.
A Berkeley real estate agent said she expects the trend to continue, which likely means there will be more homes for buyers to choose from and a continuing slowdown in price appreciation.
“There is what you might call a little bit of a glut on the market right now, so if anybody wants to sell their house, they need to think of pricing, marketing, presentation — all the elements,” said Nancy Duff, an agent with Coldwell Banker and East Bay broker for 40 years. “There still is not a ton of houses on the market compared to other places. In 2018, at times there were only 30 to 40 houses for sale in a given week in Berkeley, so even if it’s gone up 50 percent and there’s 60 houses, that’s not very many houses.”
Duff said that while real estate is cyclical, the East Bay is protected by two factors: The University of California, which draws people from all over the country, and tech companies such as Pandora, Ceres Imaging, and startup Roofstock, with offices in Oakland.
“You have to have housing for these employees,” Duff said.
The broker said that a homeowner who has lived in his or her home for 10 years or more is still likely to get a nice return on a sale, depending on various factors such as the condition of the house.
Comparatively speaking, the broker said, Bay Area sellers are still in a good position.
“In the 1970s a house could be on the market a year and not sell,” Duff said. The number of days it took for a home to sell increased 33 percent in the second quarter of 2019 compared with the same time period in 2018, from 15 days to 20, according to Duff. Nationally, properties typically remained on the market for 27 days in June, up from 26 days in May and in June of 2018.
Duff said agents and brokers are seeing “a lot more” price reductions.
“As far as buyers are concerned, this gives them an opportunity,” Duff said. “When something doesn’t sell and the price is reduced, they can take advantage.”