Paragon’s April 2014 real estate market report is out, and it’s looking like the market is in a bit of a frenzy. As the first quarter of this year continued to progress, nearly every neighborhood saw home prices surging.
So what’s going on here? Well, first of all, we saw this first in spring 2012 and then even more strongly in spring 2013. It’s a high-demand, extremely low-inventory situation studded with plenty of competitive bidding. After the market appeared to stabilize during the last two quarters of 2013, we didn’t expect this type of ferocity – and yet here it is.
According to the new Gallup-Healthways survey, San Francisco-Oakland is considered second out of the major U.S. metro areas (with San Jose-Santa Clara ranked first) for well-being. The meaning of this can be distilled down to just a few words: more people want to live here than there are properties to buy or rent.
So what are we seeing? There’s incredible competition for new listings coming on the market, which results in a simply amazing percentage of sales that not only occur above the list price, but often far above that price. The chart accompanying this article breaks down by neighborhood the average sales-price-to-list-price percentage of the 90 (!) percent of homes that have sold without price reductions. Of those areas, Bernal Heights was at the top, with sales prices at 21 percent over list prices over the last two months.
Tomorrow we’ll dive deeper into the report.
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