Good News for Buyers
Finally, more homes are on the market in the East Bay.
Photo of Anne McKereghan by Lance Yamamoto
There’s good news for folks looking to buy a home in the East Bay, where a dearth of houses for sale has helped drive prices sky-high: Finally, the number of homes on the market is increasing.
After some six years of buyers competing over the few homes for sale, the supply surged 28.9 percent in the Oakland metro area in the third quarter of 2018, according to the real estate firm Redfin. The metro area encompasses most of the East Bay.
“In the Oakland metro area, houses are taking longer to sell, so at any given time, there are going to be more houses on the market than was the case previously,” said Daryl Fairweather, Redfin’s chief economist. “There are more homes available because they’re not getting snatched up as quickly.”
The economist said she believes the trend will continue — but it’s confined to the Bay Area and a few other cities on the West Coast. Inventory grew only 4 percent in the country overall in the third quarter, she said.
In November 2017, there were 396 houses on the market in Oakland; in November 2018, the number increased to 483. Berkeley went from 62 homes on the market in November 2017 to 85 in 2018, and Concord soared from 84 to a whopping 188.
The jump in inventory began around July, Fairweather said. It’s a lesson in the law of supply and demand: Prices peaked in June and began to slide as inventory increased, the economist said.
“The median price was $789,000 for the Oakland metro area in June,” Fairweather said. “Now, in December, it’s $720,000.”
An East Bay real estate agent echoed Fairweather’s observations about the jump in inventory.
“There is more buyer opportunity available,” said Anne McKereghan, an East Bay real estate agent with Alain Pinel Realtors. The frenzied pace of four or more offers on each house is slowing, she said. “With some properties, we have seen just one or two offers,” though some homes still draw multiple offers.
Overbidding — the practice of offering tens of thousands of dollars over the asking price — is easing as well, McKereghan said. “There has been a change in the whole feel of the market.”
The number of homes on the market increased 22.5 percent in the San Francisco metro area and a whopping 86.7 percent in the San Jose metro area. Those areas differ from the East Bay because they are seeing double-digit increases in the number of people listing their homes for sale as well as a drop in the number of homes sold, according to Redfin.
The shift favors buyers, but the East Bay hasn’t yet changed to a buyer’s market, Fairweather said.
“A buyer’s market is typically when there is at least four to six months of supply. Right now, there is two months in Oakland, two in Concord, and only one in Berkeley, so it’s still pretty far off from being a buyer’s market,” the economist said.
McKereghan noted, “It’s not a time of a drastic change, just more of a balanced market.”