Why 2021 Is a Good Time to Sell a Home in the Bay Area

We’ve written a lot of blog posts in the past about whether or not it’s a good time to buy a home in the Bay Area. But what about the selling side of things? Will 2021 be a good time to sell a home in the San Francisco Bay Area?

The short answer is yes.

For many homeowners in the area, right now is a great time to list a house for sale. Low mortgage rates have increased demand among home buyers. Limited inventory gives sellers a leg up when it comes to negotiations. And there’s a good chance your house is worth more now than when you bought it.

FYI: It’s also a good time to refinance

2021: A Great Time to Sell a Home in the Bay Area

According to a recent article from the research team at Freddie Mac:

“This year’s historically low interest rates have driven a surge in demand from people looking to buy homes. In a recent study, 50% of adults considering a future home purchase have converted from passive planning to actively searching…”

This is true for much of the country, and particularly within the San Francisco Bay Area. Tight inventory and strong demand have made 2021 a good time to sell a home in the Bay Area.

Here’s a closer look at those trends:

1. There’s a lot of demand right now, among buyers.

The Freddie Mac quote above pointed to record-low mortgage rates as one factor driving home-buyer demand in 2020 and 2021. And that’s certainly true. The average rate for a 30-year fixed mortgage loan dropped to an all-time record low of 2.65% during the first week of January 2021.

That’s an incredibly low average. A couple of years ago, many people in the mortgage industry would have scoffed at the idea that 30-year loan rates could drop below 3%. And yet here we are, witnessing that very thing.

But that’s not the only thing increasing demand among home buyers. The coronavirus pandemic — with its emphasis on social distance and remote work — has led to a surge in demand from buyers across the Bay Area and nationwide.

This is one reason why it’s a good time to sell a home in the Bay Area, as of early 2021. There are a lot of buyers in the market right now, and many of them are well-qualified in terms of financing. It’s no wonder why home sales are up.

According to a January 2021 report from the California Association of Realtors (C.A.R.):

“At the regional level, sales increased by double-digits in all major regions in December, with a year-over-year gain of over 20 percent for each region, except the Central Coast region. The San Francisco Bay Area remained on top with the highest gain of 40.2 percent over last year…”

The bottom line: Demand among home buyers is high right now, and the housing market is hot. This makes it a good time to sell a home in the Bay Area. You could potentially get top dollar for your house right now, and you probably won’t be on the market very long. A bit of staging, a solid marketing plan, and a reasonable asking price could bring a stream of buyers.

2. Tight inventory conditions give sellers the upper hand.

The Bay Area real estate market remains tight in early 2021, as far as inventory goes. There is a significant and ongoing imbalance between supply and demand. (Lots of demand, very little supply.) This has made things very competitive for buyers and put sellers into the driver’s seat.

According to the C.A.R. report mentioned earlier, the statewide “Unsold Inventory Index” declined to 1.3 months in December of 2020. That matched a record low that was set back in the spring of 2004.

Those are statewide statistics. Real estate conditions are even tighter within the San Francisco Bay Area. At the start of 2021, the Bay Area had about a 1.1-month supply of homes for sale (note the important decimal there). That was the lowest level of any region in California, during that timeframe.

With such low inventory levels, home buyers are willing to make strong offers. Many of them are waving the usual contingencies that go along with real estate transactions, in an attempt to outfox other buyers. This gives Bay Area sellers what they want most — the ability to sell a home quickly and for the best possible price.

And speaking of prices…

3. Your home’s value has probably increased since you bought it.

Depending on when you first purchased your home, there’s a good chance it’s worth more today than when you bought it. House values across the Bay Area rose steadily throughout 2020, in spite of the coronavirus pandemic. And more gains are expected in 2021.

According to the C.A.R. report, the median sale price for an existing single-family home in the San Francisco Bay Area rose by more than 16% from December 2019 to December 2020.

So there you have them, three data-based reasons why 2021 could be a great time to sell a house in the Bay Area. There’s a lot of demand from buyers, increasing the likelihood of a quick sale. There’s a shortage of inventory in the area, which tends to motivate buyers. And there’s a good chance your home’s value has risen since you purchased.