Prior to the election, buyers were generally timid, adhering to the caution expressed in reports of economic uncertainty. Following the election—and once the stock market began to climb—it was a different climate, with the luxury market taking off, sales picking up steadily and record sales prices being set in several Bay Area counties. In the end patterns emerged that showed both a very lucrative outlook for sellers as well as a more prominent place at the negotiating table for buyers.
The upper end of the market specifically came alive in San Francisco and the Mid-Peninsula. With a flurry of high-priced sales in the wake of the election, San Francisco posted a record $1.833 million average sale. San Mateo County’s $1.66 million average sale was its second-highest mark in history and included many top-dollar homes that had been on the market for the better part of the year finally closing. The strength of these numbers was only bolstered by the fact that sales volume also stayed strong, with the Mid-Peninsula up 9 percent year-over-year.
To the point of strong sales prices, it should be noted that all four regions posted their highest Q4 numbers in market history. That said, things were a bit more complicated in the North Bay. In direct opposition to San Francisco and the Mid-Peninsula, the affluent area of Marin County saw its $1.434 million average sales price down 5 percent year-over-year, as well as sales volume down 6 percent. Sonoma County’s 15 percent year-over-year average sales price was at an all-time high, but its sales volume dropped by 10 percent. Napa County flipped this pattern, with its average sales price down 13 percent year-over-year, but its sales volume up 13 percent. Much of this North Bay activity can be attributed to erratic behavior during an election cycle, a depleted inventory of high-priced homes in Marin County, and a surplus of affordably priced homes opening up in Napa and Sonoma Counties.
Where other markets showed more erratic behavior than what we’ve been accustomed to for the past year, the East Bay played a steady role in the Bay Area marketplace. Contra Costa County and Alameda County average home sale prices were up 6 percent and 9 percent year-over-year, respectively. Each county also stayed within a two percent range of its Q4 2015 sales volume figures. A final trend that existed in these two counties and across much of the Bay Area was average days on market (DOM) rising slightly. If anything, this should signal a playing field that has gravitated more toward buyers over the past year.
The Bay Area netted a total of $8.581 billion in total sales this quarter. The East Bay provided 58 percent of all sales and 46 percent of the cash share. The Mid-Peninsula contributed 13 percent of all sales and 21 percent of total cash share. The North Bay claimed 22 percent of all sales and 20 percent of total cash share. San Francisco added 7 percent of all sales and 13 percent of total cash share. All of these figures were generally in line with typical sales and cash share ratios for the season.