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May 16, 2017

Diablo Valley & Lamorinda Real Estate Market Home Value Appreciation Continues in early 2017

May 16, 2017

Diablo Valley & Lamorinda Real Estate Market Home Value Appreciation Continues in early 2017

As illustrated in the charts below, the Diablo Valley and Lamorinda homes market, with one significant exception, has seen median sales prices and average dollar per square foot values continue to increase in 2017. One caveat: One should not make too much of relatively short-term changes until substantiated over the longer term. Short-term values can sometimes fluctuate for other reasons besides changes in fair market value.

House Value Trends

Median Sales Price Trends by Month & by Year;
Average Dollar per Square Foot Values by Month

By all 3 measures, house values hit new highs in early 2017.

Condo Value Trends

Median Sales Prices & Average Dollar per Square
Foot Values by Quarter

By both measures, condo values also hit new highs in early 2017.

The Luxury Home Market

Median Sales Prices by Quarter

Luxury homes, i.e. the top 10% of sales – detached houses selling for $1,850,000 or more – are the exception to the general appreciation trends noted above. The median sales prices in this market segment have fallen since peaking in 2015. However, please remember that too much should not be made of the data of a single quarter until substantiated over a longer term: The big, sudden drop in Q1 2017 may turn out to be an anomaly. Q2, which began in April, is typically the most active quarter for luxury home sales and we will know more after it ends.

Year over year, luxury home inventory has been increasing, while sales have dropped a little, and the number of listings expiring without selling has jumped.

Comparing median asking prices to sales prices to the prices of listings that are pulled off the market without selling, one sees there are significant differences between the non-luxury home market and the luxury segment. Overpricing appears to be a much bigger issue for the most expensive home listings than in the general market.

Overviews: Diablo Valley & Lamorinda Home Sales

Diablo Valley & Lamorinda, San Francisco, California
& U.S. Long-Term Median Home Price Trends

Home Sales with and without Price Reductions,
Sales Prices to List Prices, Days on Market & Expired Listings

This chart looks at the overall real estate market in Diablo Valley and Lamorinda, and illustrates the differences between those listings buyers react to quickly and positively, and those listings that have to go through price reductions before selling, or do not sell at all. There are a variety of important issues at play, including preparation and marketing, but correct pricing is usually the critical issue.

Various Economic Indicators
That Can Impact the Market

Bay Area Employment & Unemployment Rates

The lowest unemployment rates in 15 years, but the picture in hiring and new high-tech hiring in particular, is a bit unclear with recent shifts up and down.

S&P 500 Stock Index

Maybe some irrational exuberance at play since the election?

Housing Affordability

Perhaps the biggest social, economic and political issue
in the Bay Area right now: Remaining close to all-time lows

In this chart, Diablo Valley and Lamorinda affordability ratios
are probably most similar to those of Marin County.

Mortgage Interest Rates

Up after the election, down since the new year began,
rates remain extremely low by historical standards

If you have any questions or comments regarding this report, or if assistance can be provided in any other way, please call or email.

More on Diablo Valley & Lamorinda real estate: Diablo Valley & Lamorinda Market Reports – scroll past the May report for dozens of other analyses.

All our Bay Area analyses: Paragon Market Reports.

It is impossible to know how median and average value statistics apply to any particular home without a specific, tailored, comparative market analysis.

These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term.

© 2017 Paragon Real Estate Group