Q2’s resurgent all-time average sales price highs and sales volume recovery gave way to more tempered numbers in Q3, as was seasonally expected. Still, even calm in Bay Area terms can translate to strong year-over-year price gains and stabilized inventory levels—trends which defined a quietly triumphant Q3.
Q3 2015 set a record for the highest cash share by volume of any third quarter in Bay Area market history, with $8.66 billion in total sales. This was spurred by each of the seven counties we represent experiencing year-over-year average sales price gains—five of which were at least 9 percent improvements from Q3 2014. The Mid-Peninsula’s record $1.598 million average sales price topped all Bay Area counties, outpacing even San Francisco.
This last piece of granular information—San Mateo County’s constant upward growth—speaks volumes to the underlying forces that continue to drive Bay Area real estate prices to unforeseen heights. With the booming biotech industry firmly rooted on the Mid-Peninsula between South San Francisco and Redwood City, demand in areas like San Mateo County is rivaled only by the growing number of buyers with enough disposable income to put down roots in close proximity to work.
A recent report by the Bay Area Council Economic Institute concluded that the tech industry’s power is such that for every job it creates four jobs are indirectly created in other industries. Dovetailing that, the Bureau of Labor Statistics published data on October 20th showing that California led the nation over the last year in job growth, with nearly twice as many new jobs created as the next state. And where is the large bulk of that economic windfall landing? Right here in the Bay Area, of course.
Given such widespread economic growth, it also made sense that the four most modestly priced counties we represent all performed dominantly this quarter. Napa, Sonoma, Contra Costa and Alameda Counties continue to be popular alternatives for buyers looking to leave dense, urban settings in search of larger homes along with better and more affordable schools for their families. Thus it was no surprise that each of these counties experienced a highest and or second-highest average sales price on record. Q3 ushered in highest sales volume tallies in at least two years for both Contra Costa County and Napa County.
The typical seasonal drop-off in homes for sale is to be expected as we look forward to Q4. That said, demand is at such competitive levels—as evidenced by the continued phenomenon of homes selling above list price across the region—that sellers looking to capitalize will undoubtedly create opportunities for determined buyers.