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October 27, 2017

Diablo Valley & Lamorinda Home Prices & Market Trends

October 27, 2017

Diablo Valley & Lamorinda Home Prices & Market Trends

Before talking about real estate, which does not seem very important right now in light of the terrible fires in the wine country, here are a number of ways to help, if you wish to do so. It is not close to a complete list.

Donate to Red Cross
Airbnb Open Homes Program
Napa County Disaster Relief
Go Fund Me Fire Relief Campaign
Sonoma Humane Society 
Napa Humane Society 
Other Ways to Help

Diablo Valley & Lamorinda Median Home Sales Prices

Annual Median Sales Price Trends since 1996

Quarterly Median Sales Price Trends since 2014

Median Home Prices by City, 2017 YTD

Market Seasonality

The market has another 4 to 5 weeks to run before it begins to subside into the mid-winter slowdown: After mid-November, buyer demand starts rapidly dwindling until picking up again in late January and February. So the window for selling in the autumn market is starting to close. However, the holiday season can be a good time for buyers: It is true that the selection of homes on the market drops significantly, and many fewer new listings come on market, but competition from other buyers also plunges, which can lead to more negotiation room and better deals.

Market Statistics by Price Segment

We tend to think of the area real estate market as a single entity, but Diablo Valley and Lamorinda are made up of distinct market segments with differing realities and trends. Right now, the differences mostly break by price segment more than by location, with more affordable homes constituting a red hot market, while the market for more expensive homes is considerably cooler or softer.

Percentage of Listings Accepting Offers

The higher the percentage the hotter the demand.

Average Days on Market

The fewer the days on market, the stronger the demand.

Months Supply of Inventory (MSI)

The lower the MSI, the stronger the demand as compared
to the supply of listings available to purchase.

Home & Lot Sizes by City & Price Segment

Generally speaking, Diablo Valley and Lamorinda overall have substantially larger house sizes than any Bay Area county, but within the area itself home and lot sizes vary markedly by city and, of course, by price.

Median Home Sizes – Square Footage

Median Lot Sizes – Acreage

Diablo Valley & Lamorinda Luxury Home Market

Home listings of $2 million+ have been steadily rising for the past 4 years, and sales hit a Q3 high of 85 in 2017 (though still lower than Q2 2017, which hit an all-time quarterly high of 103 sales). However, there is a considerable difference in the median list prices that sellers are asking for, and the median sales prices buyers are paying. Probably because of this, the ratio of expired listings (no sale) to sold listings is very high in this price segment: A substantial percentage of luxury home listings simply do not sell.

As seen in earlier charts, the market for high-priced homes in Diablo Valley and Lamorinda is significantly cooler – as measured by days on market, months supply of inventory, and percentage of listings accepting offers – than the market for more affordable homes (which is, generally speaking, extremely hot). Realistic pricing is critical: Those high-end listings that the market deems appealing and competitively priced sell, on average, very quickly for full price. The overall statistics are dragged down by those homes buyers deemed appreciably overpriced.

Context Economic Factors to Bay Area Housing Markets

We recently completed a report placing the Bay Area housing market within the context of a wide variety of othereconomic and demographic dynamics, such as population growth, employment and hiring, the stock and the IPO markets, consumer confidence, interest rates, commercial lease rates, aging homeowners (who sell less frequently), housing affordability and new housing construction. Because conditions, trends and cycles seen among them are, more often than not, closely interrelated. In some of these analyses we use San Francisco data due to its availability, but the trends generally apply to other Bay Area markets. The exception is new home construction: The city is in the midst of a huge building boom, mostly of relatively expensive condos and rental apartments.

The full report is online here: Economic Context Report.