Sellers can be enthused that five of the seven counties we represent recorded all-time-high average home sale prices, but buyers should also take note that Q2 is known for big prices, and these average gains were noticeably lower than in previous years. While it might be startling to hear that all seven counties saw year-over-year home sales decline, the flip side is that five counties were down by a meager 5 percent or less, with even the highest sales volume drop being only 11 percent in Sonoma County.
These trends were particularly pronounced in the three most affluent counties: San Francisco, Mid-Peninsula and Marin County. The $1.736 million average home sale in San Mateo County was up 5 percent from its previous record price set in Q2 2015. To put the market’s easing up into perspective, the Q2 2015 price was up $160,000 from Q2 2014, and the Q2 2014 price was up $200,000 from Q2 2013. The point being that despite an all-time record, the market’s year-over-year appreciation rate is slowing down noticeably. Also in line with market stabilization, San Mateo County posted just two percent less sales this quarter than in Q2 2015.
Marin County experienced a similar trend, with its record $1.597 average home sales up a modest 6 percent year-over-year, and sales volume down just 4 percent from the previous year. San Francisco saw its average sales price down year-over-year, but only by 4 percent, with the quarter still ranking as the second-highest in city history. Meanwhile, sales volume was almost identical to the number of homes sold in Q2 2015. The city’s condominium market acted similarly, with average sales prices down 2 percent year-over-year and units sold down 8 percent. Much of this activity was indicative of homes at $1 million or less being the ideal purchase for city buyers.
The more affordable East Bay counties saw a bit more strength, mainly due to the factor of desirability toward modestly priced homes. Contra Costa County and Alameda County witnessed record average sales prices, up 4 percent and 6 percent year-over-year, respectively. Homes in Alameda County moved rather quickly in an average of just 18 DOM), however both communities did see a slight drop-off in the number total sales.
The fact that Napa County was the only area to have its average sale price drop from Q1 2016 could also be easily misconstrued. The county’s numbers were inflated by some massively priced properties leaving the market in the previous two quarters. In fact, Napa County saw a considerable 14 percent year-over-year gain while just 3 percent less properties sold than in Q2 2015. This trend of stability continued into neighboring Sonoma County, where a record average home sale price was up 7 percent year-over-year, but also where sales were down 11 percent.
Slightly lower than average sales volume tallies were easily offset by strong average sale prices, as the Bay Area netted a total of $10.309 billion this quarter. This included the Bay Area’s average home sale of $1.046 million being up 5 percent year-over-year. The East Bay accounted for 47 percent of cash share and 58 percent of total sales. The North Bay totaled 22 percent of cash share and 23 percent of all sales. The Mid-Peninsula provided 21 percent of cash share and 13 percent of all sales. San Francisco contributed 10 percent of cash share and 6 percent of all sales. These figures were all very typical in terms of what we’ve seen over the past few years.