According to a recent study from real estate listings site Zillow, Bay Area house buyers may finally be getting a respite, but they won’t be able to stop sellers’ reign of terror over the market anytime soon.
The San Francisco metropolitan region, which Zillow defines as Alameda, Contra Costa, San Francisco, San Mateo, and Marin counties, has experienced a continuous increase in inventory since February, with 8,406 properties for sale up 260 from May to June. Following months of rises since the onset of the epidemic, the decline started in October.
The Bay Area is one of just a few locations in the nation where inventory is up from a year ago, according to the firm, but that’s mostly due to the fact that it was already extremely low in 2020. Only 5,000 houses were for sale in the San Francisco metro region at one time in 2020.
According to the study, the number of houses offered for sale in the United States increased for the second month in a row in June, up 3.1 percent over May, which may be “an sign the market is starting to regain more equilibrium after long leaning strongly towards sellers.”
Inventory fell substantially during the epidemic, according to the study, owing to an increased demand for homes. As a result, there was intense rivalry and a substantial price increase.
However, the study points out that inventory is still low and demand is robust, resulting in house value appreciation reaching new highs.
Zillow’s Home Worth Index calculates the average home value in a given area using a variety of data sources, including seasonal changes and the prices of neighboring properties.
In July 2020, the Home Value Index in San Francisco started a strong increase, hitting $1.296 million in June, up $172,435 or 15% from a year earlier.
In June, the U.S. Home Value Index was $293,349, up 15% from a year earlier and the biggest rise since Zillow started tracking data in 1996.
Similar patterns were seen in the San Jose metro region, which experienced a 49-home rise in inventory from May to June. In June, the Home Value Index in the region, which encompasses Santa Clara and San Benito counties, was $1.433 million, up 3.7 percent from the previous month and 17 percent from the previous year.
So, what does this mean for homeowners?
According to the company, their houses are worth considerably more than they were a year or even a few months ago. It’s a wonderful time to sell right now, so if a homeowner is considering relocating, they should be able to sell their house for a higher price and keep the equity to put toward their future home.
Despite record low loan rates, the circumstances make purchasing more difficult. The continuing rise in house prices makes it more difficult to save for a down payment, especially in competitive areas like the Bay Area, where properties are selling for more than the asking price.
The rental market has rebounded well, particularly in San Francisco, where rents fell earlier in the epidemic as people fled to more inexpensive towns and suburbs.
San Francisco’s average rents have been rising since the beginning of the year, up 1.9 percent month over month for a normal rent of $2,985 and up 6 percent since January, according to the Zillow Observed Rent Index. The Observed Rent Index in San Jose is up 1.2 percent month over month, with a median rent of $3,015 in June, up 4.5 percent since January. Rents in the United States rose by 1.8 percent month over month.
Typical rentals are determined by measuring price changes over time for the same rental unit, then averaging those differences over all of the units offered for rent on Zillow periodically. Weights for the index were also generated using the most recent data from the US Census Bureau.