Bay Area home prices are still rising. Up over 22% in the last 12 months, a lack of inventory mixed with all cash buyers has made buying a Bay Area home more like interviewing for a new job position. With almost every listing (close to 90%) receiving multiple offers it is becoming a battle of who can produce the best “resume”. Cash buyers and investors are beating out traditional homebuyers leaving them no choice but to offer more than the asking price, much more. In San Jose real estate sales are seeing an astonishing 13.8% above asking price, and 3.8% above asking in the city. The lack of inventory seems to be in part due to the recovering economy. During the recent recession construction was put to a halt. While some of the construction has resumed it left a gap in the inventory supply.
This is great news for homeowners looking to cash out and move away from the madness. Some surrounding areas are seeing an influx of middle-class people moving away from the city making more room for the internet millionaires whom are lining up. All this data would normally be cause for a bubble alarm but considering both the deep pockets of the Internet millionaires and the lack of sketchy financing terms, the San Francisco housing market seems to be stable.
Will we see similar statistics in the Tahoe Market?
Yes and No. As the San Francisco market cools, I believe we will see an influx of second homes buyers looking to buy for leisure and investment. With areas like Martis Camp and Northstar booming with construction I doubt we will ever see the lack of inventory like the Bay Area. We likely will never see the 5%, 10% or 15% above asking price but keeping a good balance is ideal to keep our Tahoe market strong. Completive pricing and patience will keep our housing market solid as we continue to see growth.
Resources: Huff Post, Redfin, Curbed Sf