As the overall economy has improved, California real estate sales had a solid gain in 2017. Prices and sales on the peninsula have far outpaced the rest of the state.
The Bay Area’s median sales price is approximately $850,000 which is over 50% higher than the statewide median of approximately $550,000.
Prices on the peninsula exceed overall Bay Area prices significantly.
The Bay Area has experienced extremely strong job growth and this is expected to continue in 2018. High paying technology related jobs are attracting talent from around the nation, and the world. These people contribute to the strong demand for peninsula properties. This demand is additionally fueled by continuing historically low interest rates.
This strong demand has been coupled with a very limited supply of available properties. The number of active listings on the market has remained at near historically low levels. Unlike many areas in the state, we do not have available land to use for increasing the housing supply.
Historically homeowners who either want to upgrade or downsize have been a constant source for homes on the market. Limited inventories have made selling current homes risky due to a lack of buying opportunities available if their current homes sell. Thus, remodeling has become a very popular alternative and remodeling construction business is at an all time high. Many baby-boomers are retiring but not putting their homes on the market like retirees have in the past. Rather than pay excessive capital gains taxes they remain in their homes that have relatively low monthly costs.
Most experts feel that peninsula real estate prices will grow at a rate of 4% to 6% in 2018 and sales volume will remain approximately the same as 2017. Both strong demand and limited supply will likely mirror 2017. Purchasing a home locally will continue to be less and less affordable.
If you own a home today you should be very pleased. If you can afford to purchase today you should.
You will always be very happy that you did.
This article was originally written for and appears in the San Francisco Examiner. Eric Ruxton and Larry Aikins are the owners of Terrace Realty Inc. and Terrace Associates Inc., in Redwood City. Terrace has been in business for over 55 years and in addition to being an independent Brokerage Company, also owns and operates rental properties.