5 Noteworthy Bay Area Housing Market Trends to Watch in 2024

The Bay Area real estate market has changed significantly over the past three years or so, and for a number of reasons. Now, a lot of home buyers and sellers are wondering what to expect in 2024.

We recently reviewed housing market data for all nine counties across the San Francisco Bay Area, to get a sense for where the market is now and what it might be like in 2024. This report contains real estate trends for the Bay Area as a whole, along with the individual counties.

The nine counties included in this report: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano and Sonoma.

Bay Area Housing Market Snapshot

The San Francisco Bay Area real estate market has accelerated over the past year, marked by a measurable decline in the median number of “days on market.” Last month, homes listed for sale in the Bay Area spent a median of 16 days on the market before going under contract. That was down from 25 days a year earlier.

In other words, homes are currently selling a lot faster than they were a year ago. And inventory has a lot do with that. Supply levels across the Bay Area housing market have declined over the past year, forcing buyers to compete for fewer properties.

Here are some quick stats for the Bay Area housing market, as of November 2023:

• Median sale price: $1,268,940
• Home price change over the past year: +5.7%
• Home sales change over the past year: -3.9%
• Months of supply: 2.0
• Median time on market: 16 days

5 Trends to Watch Out for in 2024

Let’s now shift our focus to some of the most noteworthy trends within the Bay Area housing market, which could influence the market in 2024 as well.

While no one can predict future real estate trends with complete accuracy, we can use current market conditions to make an educated guess about the near future.

Note: Most of the statistics below are based on a November 2023 housing market report published by the California Association of REALTORS (C.A.R.).

1. Big price increases in San Mateo and Santa Clara counties

Home price changes have been mixed over the past year. Prices rose in seven of the nine Bay Area counties, but dipped slightly in Contra Costa and San Francisco counties. Regionally, the median sale price climbed by 5.7% in October of 2023, compared to a year earlier.

The biggest year-over-year price gains occurred in San Mateo County (+10.5%) and Santa Clara County (11.1%). Anyone planning to buy a home in one of these counties in 2024 should pay close attention to this trend. It might justify buying sooner rather than later.

2. Inventory remains tight, especially in the East Bay

Housing market inventory levels declined during 2023, a trend that was partly influenced by rising mortgage rates.

Currently, many homeowners across the U.S. have mortgage rates that are much lower than today’s averages. This makes them reluctant to sell their homes and buy another one, even if they’re feeling the relocation itch.

Housing analysts and economists refer to this as the mortgage rate lock-in effect. And it’s one of the main reasons why the Bay Area real estate market continues to experience an inventory shortage as we approach 2024.

As of November 2023, the Bay Area region had about a 2-month supply of homes for sale, which was below the national average. Inventory conditions are especially tight within the East Bay housing market. Alameda and Contra Costa County each had about a 1.5-month supply of homes for sale last month.

3. Many homes are selling above the asking price (especially in Alameda)

According to recent reports, a lot of homes listed for sale across the Bay Area ending up selling for more than the original list price. This indicates a high level of competition among buyers, which is being driven by tight inventory conditions.

Alameda County, in particular, has a very high percentage of homes selling above the list price. According to the recent C.A.R. report mentioned earlier:

At least half of the homes sold above their asking price in five California counties. Four of those five counties were in the Bay Area region. Alameda (72 percent) recorded the biggest share in the entire state, followed by San Francisco (67 percent), Santa Clara (65 percent) and San Mateo (58 percent). Glenn County (50 percent) in the Central Valley region was the remaining county with half of its homes selling above the asking price.

This trend will likely continue into 2024 as well, at least during the first part of the year.

If you’re planning to buy a home in the Bay Area in 2024, be prepared for multiple-offer scenarios and the possibility of bidding wars. Have a firm budget in mind before entering the real estate market.

4. Santa Clara is the “fastest” housing market in the Bay Area

The San Francisco Bay Area real estate market has accelerated over the past year, with homes selling faster than before. This is another trend to watch in 2024, if you plan to buy a house.

Last month, homes listed for sale across the Bay Area spent a median of 16 days on the market before going under contract. A year ago, the median DOM was at 25 days. This means the overall pace of home sales increased during 2023.

By this measurement, Santa Clara County is currently the “fastest” real estate market in the nine-county Bay Area region. The median DOM in Santa Clara was eight days last month, compared to the regional median of 16 days.

Alameda and Contra Costa County clocked in at 13 and 14 days, respectively. Wine Country housing markets are puttering along by comparison. Napa had a median DOM of 50 days last month, while Sonoma was at 59 days.

These are some of the biggest trends that could affect the Bay Area real estate market in 2024.