Now this is really, really hot 🥵

It’s getting real now: the spring market is hard upon the Bay Area. I’ve been hearing reports from colleagues in the industry and the general public I interact with at open houses or just around town: it’s a hot, hot market out there.

But now that February is officially in the books, I thought I’d take a look at the first “official” month of the spring market. Remember, February data is mostly about sales (homes that went under contract) in January…which sounds like it’s still winter, but as I always tell people, the real estate market wakes up from its winter slumber by about half way through January.

As always, I prefer to look at the Santa Clara County market as an overall barometer of market health and activity throughout the Bay Area (and beyond). And as much as I’ve been personally experiencing the market activity and hearing anecdotes from colleagues, clients, and the man on the street – the February single-family home sale numbers are surprising:

Median Sale Price: $1,800,000 (+16.1% vs. $1,550,000 Year-Ago)
Avg. Days on Market: 20 (-39.3% vs. 33 Year-Ago)
Avg. Price Per Square Foot: $1,124 (+14.1% vs. $985 Year-Ago)
Sale-to-List-Price Ratio: 106.2% (+6.6% vs. 99.6% Year-Ago)
Homes Sold: 447 (+17.9% vs. 379 Year-Ago)
New Listings: 871 (+26.4% vs. 689 Year-Ago)

Obviously, the headline number is the increase in the median sale price. A jump of 16.1% versus the year-ago period isn’t unheard of this time of year, but it is certainly noteworthy. This may be driven by the fact that mortgage rates had ticked down in December and the early part of January, but also could be explained by a booming stock market giving Bay Area buyers more money to put down, thus able to pay more even with higher borrowing costs.

But that doesn’t explain the drop in days on market: homes sold almost 40% quicker in February 2024 vs. February 2023, which is a clear indication of the strength of the demand for homes.

One of my favorite metrics is the average price per square foot, which was up 14.1% in February 2024 vs. the year prior. This number tends to track fairly closely with the increase in the median sale price, but I find it to be a more useful number for calculating how much your home value may have changed (versus using the median sale price).

The number of sales was also up by a significant margin – 17.9% higher than a year ago. This also underlines just how strong the demand is for homes in the Bay Area so far this spring.

While it seems that the surge in closed sales bodes well for the spring market, it’s important to note that the number of new listings was also up – way up. 871 new listings hit the market in February 2024, which is an increase of 26.4% versus a year ago.

That means that February ended up with about 182 more homes for sale than January. In other words, inventory (supply) is up – and if past patterns are any indication, inventory will continue to build up form here through mid-summer. Before long, the balance of supply-vs-demand will tip in the direction of buyers, dragging prices down from their seasonal springtime spike.

I hate to sound like a broken record, but if you’re interested in hitting the market at absolute peak pricing, the window to do so (if past history is a reliable indicator) is rapidly closing. Feel free to contact me to discuss how you can still take advantage of this frothy market – and have the whole process be much easier and quicker than you’re likely expecting.