The broad trends continue: low inventories that are driving double-digit sales price increases that reflect multiple bids for properties.
Depending upon your perspective, there has been a modest increase in resale homes available—a number that reflects both homeowners whose homes are no longer under water after a purchase in the mid-2000s and a growing confidence in the Bay Area economy. The economy can be witnessed by traffic counts on southbound I-680 in the mornings—it isn’t back to dot.com levels, but it is moving in that direction.
The lack of supply is driving the soaring price increase. In pre-bust markets, the five Tri-Valley communities had an average of 200-250 resale homes available. Inventory plummeted to less than 100 across the board. Earlier this year as interest rates bumped along all-time lows, it brought more people into the market, particularly those striving for conforming loans of less than $417,000.
The result is that median prices (half above and half below) have soared 13 percent in Danville to $950,000, 19 percent in Pleasanton to $885,000, 38 percent in Dublin to $794,000 and 27 percent to Livermore to $550,000. Livermore dropped the most from its high during the soaring 2000s and Pleasanton held up really well.
It should be noted that these are resale homes. The homebuilders in East Dublin and San Ramon are rocking—back to the lottery days with long, long lists.
As Dave noted, Pleasanton (Danville and San Ramon, my comment) remain very desirable places to live with high-performing schools, high quality of life and low crime rates as reported Tuesday. That’s likely one of the reasons that the Pleasanton Police specifically call out the thefts and larceny connected with Stoneridge mall—33 percent of that category—it skews the part 1 crime rate.
Another intriguing stat, without any clear explanation, is cash sales. When the market had fallen so substantially in 2009, many homes were being bought for all cash by either investors planning to rent them or people planning to fix them up and flip them.
Lately, there has been media coverage about Asian buyers flooding into the Bay Area market with lots of cash. There’s no question that the new or relatively new homes in the Dougherty Valley—with excellent San Ramon Valley schools—have become a destination for Asian buyers. The ethnic breakdowns for San Ramon Valley schools there show more than 70 percent Asian students.
An interesting distinction in the recent resale stats show that 75 percent of the sales of less than $417,000 have been all-cash transactions in San Ramon. No opinion from Dave or yours truly about what that means, but the other figures for all-cash deals in that same price category have been 20 percent in Pleasanton, 18 percent in Livermore, 40 percent in Dublin and 50 percent in Danville. To consider: ask how many transactions in particular in the more expensive communities fell into this category and how many new homes were available.
There were precious few new homes available in Danville and Pleasanton, while there were more options in San Ramon and, particularly, Dublin.