As activity ramps up among buyers and sellers, the Bay Area has experienced a significant surge in real estate sales this July. With interest rates around 6.5% and a limited housing supply, prices continue their upward trend. Recent data from the California Association of Realtors shows a striking 19.2% increase in sales this July compared to the same month last year.
One major factor contributing to this shift is the changing perception of interest rates among buyers. While this summer’s rates are comparable to last year’s, they are trending downward. Last year’s 6.5% interest rate caused panic among buyers, but after several months of coping with rates around 7%, many now view the current 6.5% rate as a welcome relief.
The sales figures from various Bay Area counties reflect this renewed energy in the market. Alameda County reported a 24.9% increase in sales, Santa Clara County saw a 30.5% rise, and San Francisco experienced an impressive 34.8% jump.
Despite the tight inventory, strong demand continues to push prices upwards. Over the past year, the median home price across the Bay Area’s nine counties rose by 3.6%, climbing from $1.26 million to $1.30 million. Alameda County’s median reached $1.28 million, Contra Costa County $916,500, San Mateo County $2.1 million, and Santa Clara County $1.88 million. Notably, San Francisco recorded the most significant increase at nearly 10%, now sitting at $1.6 million.
Real estate agents have observed that affluent tech workers are spending liberally, creating fierce competition for single-family homes this summer. Carlos Pompa, an agent with Keller Williams, shared insights from a recent open house in San Jose’s Willow Glen neighborhood, emphasizing a “steady flow” of buyers, many of whom were encountering multiple offers. He pointed out the prevalence of all-cash buyers in the market, for whom interest rates are a minor concern.
In contrast, buyers who depend on financing find that even slight fluctuations in interest rates can have a substantial impact on their monthly mortgage payments. For example, at the peak rate of 7.22% from May, purchasing a median-priced home in the Bay Area would result in a monthly payment of $7,073 with a 20% down payment over 30 years. However, with the current average rate of 6.46%, that payment decreases to $6,546.
Despite the elevated interest rates, homes in the Bay Area are selling rapidly. In July, properties across the nine counties had a median market time of just 17 days, with many core counties reporting even quicker sales—13 days in both Alameda and Contra Costa counties, 12 days in San Mateo County, and a mere 9 days in Santa Clara County. Homes in San Francisco took slightly longer, averaging 27 days on the market.
David Stark, a spokesperson for the Bay East Association of Realtors, anticipates a bustling fall season for the housing market.
