Consumer confidence is still soaring, and buyers continue to push aside concerns regarding recent financial market volatility, federal tax law changes affecting Bay Area homeowners, and interest rate increases, to fuel strong markets throughout Central Contra Costa.
In Q1 2018, the median house sales price in Diablo Valley & Lamorinda of $1,285,000 was 4.5% above the Q1 2017 price of $1,230,000, and the tiniest bit above the previous peak reached in Q2 2017 ($1,280,000). Prices usually increase from Q1 to Q2 as the spring selling season really gets going, so it will be interesting to see what happens next in our market.
Long-Term Home Price Trends
Bay Area vs. National Appreciation since 1987
per CoreLogic S&P Case-Shiller Home Price Index
The Case-Shiller Index does not use median sales prices to measure appreciation, but instead employs its own algorithm. This chart compares the national home price appreciation trend with that for high-price-tier houses in the 5-county SF Metro Area. The high price tier applies best to most of the markets in Diablo Valley & Lamorinda, San Francisco, Central-Southern Marin and San Mateo.
In this chart, home prices in January 2000 are designated at a value of 100, thus the reading of 248 in December 2017 signifies a price that has appreciated 148% in the 18 years since then. Notice how similar the national and Bay Area trend lines are, with appreciable variations occurring after the 1989 earthquake, during the dotcom bubble and crash, and during the most recent Bay Area high tech boom.
A condensed version of our report on the ups and downs in the market over recent decades: SF Bay Area Real Estate Cycles
Home Values by City
Sales Reported to MLS, 10/1/17 – 4/10/18
Below is a glance at recent house median prices and average dollar per square foot values broken out by city, for sales reported to MLS in the last 6 months or so – basically since autumn sales began to close in early October.
Average Dollar per Square Foot Values
The market has just begun what is typically the busiest selling season of the year, as new listings pour onto the market, and buyers jump on those listings.
Sales Price to List Price Percentage
Higher percentages over list price signify more heated buyer competition for new listings coming on market. By this metric, 2018 has gotten off to a stronger start than 2017.
Average Days on Market
The Luxury Home Market
Q1 Year-over-Year Comparisons
Pricing & Overpricing
For home listings under $2m, the difference between the median list price and the median sales price is quite small, about 4%, though when looking at listings that do not sell, but expire instead, the difference swells to 9%. That 5% makes all the difference between selling and not selling. For homes over $2m, the differences become more striking: The median list price is almost 10% higher than the median sales price, and there is a 15% difference between median sales price and the median asking price of those expensive homes that do not sell.
Generally speaking, sellers and listing agents in the luxury home segment are more prone to overpricing their listings beyond what buyers are willing to contemplate paying. Even the most beautiful home has a fair market value based on a rational comparative market analysis.