In this report: An update on current housing market trends in the East Bay region…
S.F. East Bay Housing Market Update for 2021 and 2022 Forecast
As of summer 2021, the East Bay real estate market remains highly competitive due to strong demand and limited inventory. In other words, it looks a lot like last year. Forecasts for 2022 suggest the East Bay housing market could see rising home prices for the foreseeable future.
East Bay Real Estate Market Trends in 2021
Geography note: This report pertains to the East Bay portion of the broader San Francisco Bay Area. It covers both Alameda and Contra Costa County, along with the major cities of Alameda, Concord, Fremont, Livermore, Pleasanton and Walnut Creek.
Through the first half of 2021, the East Bay real estate market has been marked by high competition and steadily rising home prices. That was the story for much of 2020 as well, despite the COVID pandemic. And those conditions could continue into 2022 as well.
Even so, there are some signs of a slight cool-down within the East Bay real estate market (and the rest of the nation).
According to a June 2021 report from the California Association of Realtors (C.A.R.), home sales across the East Bay housing market have slowed a bit. In Contra Costa County, sales declined by -6.6% from April to May of this year. In Alameda County, sales dipped by -1.6% month to month.
Home prices, on the other hand, continue to rise within the East Bay.
Alameda and Contra Costa counties both posted significant year-over-year home price increases. According to C.A.R., the median selling price for existing single-family homes in Alameda County rose 37% from May 2020 to May 2021. The median sale price in neighboring Contra Costa County rose by a whopping 47% during that same 12-month period.
Zillow also reports significant price growth within the East Bay real estate market during 2021. By their estimation, the median home value for both Alameda and Contra Costa counties rose by around 19% over the past year or so. (This is a slightly different metric from the median sale price mentioned above, hence the different numbers.)
Inventory Remains Tight, Despite a Rise in Listings Nationally
The inventory situation is the big story within the East Bay real estate market in 2021. The short version is that there simply aren’t enough homes on the market to satisfy demand from buyers. This was the story for much of 2020, and it remains so today.
According to CAR’s June 2021 housing market report, the East Bay counties of Alameda and Contra Costa both had about 1.3-month supply of homes for sale as of May 2021. That’s a very low inventory reading, and it really hasn’t changed over the past few months.
We continue to see upward movement of home prices within the East Bay housing market, and a slight slowdown in sales activity. But the inventory situation has remained mostly static and unchanged since the start of 2021.
Related: Should you wait until 2022 to buy?
So, even with a slight reduction in buyer demand, the East Bay real estate market remains highly competitive due to record-low inventory. That’s the key takeaway from this report. Home buyers who are planning to enter the East Bay housing market in 2021 or early 2022 should be prepared for stiff competition. This real estate market is fast-paced with multiple-offer scenarios being the “new normal.”
East Bay Housing Market Outlook for 2022
In July 2021, the research team at Zillow offered a surprisingly bold forecast for the broader Bay Area housing market into 2022. By their estimation, the median home value in the San Francisco-Oakland-Hayward metropolitan area rose by 11.6% over the past year. Looking forward, they predicted a 21% increase in home prices over the next 12 months.
In July, the company’s website stated:
San Francisco-Oakland-Hayward Metro home values have gone up 11.6% over the past year and Zillow predicts they will rise 21.2% in the next year.
That might be an overly “bullish” forecast for the Bay Area real estate market, given the home-price trends we’ve seen over the past year. But the truth is, it wouldn’t be surprising to see double-digit price growth over the next year. This often occurs when demand greatly exceeds supply.
In some parts of the country, local housing markets are starting to experience a gradual increase in the number of new real estate listings. According to a July 1 report from Realtor.com, new listings nationwide rose by 10.9% from May to June of this year. New listings were up by more than 5% when measured year-over-year.
But that’s a nationwide statistic. Here in the East Bay real estate market, we are not seeing a significant increase in the number of homes for sale. That might change later in 2021 and into 2022. But as of now, the inventory situation remains stagnant.
This is partly why forecasters like Zillow are issuing strong forecasts for the East Bay real estate market stretching into 2022. A combination of steady demand from buyers and chronically low inventory levels will likely continue to boost home prices for the foreseeable future.
How to Succeed When Buying a Home
No one can predict future real estate trends with complete accuracy. But the current imbalance between supply and demand within the East Bay real estate market makes it likely that prices will continue to climb.
Home buyers should be aware of these trends and prepare accordingly. In a hot housing market like ours, buyers should be ready to hit the ground running. This means having your financing lined up ahead of time, and making a strong offer when the right property comes along. That’s how you succeed in a fast-paced real estate scene.
Disclaimer: This article includes predictions and forecasts for the East Bay housing market stretching into 2022. Such predictions are the equivalent of an educated guess and should be treated as such.
