Silicon Valley’s “Gatsbyesque” Market Cools Down
The Bay Area has previously been plagued with low inventory and bidding wars that will make your head spin. Glenn Kelman, CEO of Redfin, has some good news: Bay Area inventory is up, and bidding wars are down. The ever-so-tumultuous Silicon Valley market is changing yet again and it may be in your favor this time around.
Ninety-five percent of Redfin agents fell victim to the bidding wars that have consumed most listings in Silicon Valley. Redfin publishes competitive dynamics for every offer their agents write. The average number of competitors in a bidding war peaked at 16.3 in January to 7.8 in May. Good news?
“As agents, we know that demand is waning not because buyers no longer want a home but because they’ve despaired of ever being able to get one,” says Kellman, “About one in four of our Bay Area homebuyers have told us at some point in the last three months that they’re taking a break from their search out of sheer frustration.”
Flash Sales The New Norm?
Homes are selling like wildfire, which could reflect a fundamental change in consumer behavior. Redfin found that the median time a home stayed on the market in the Bay Area was 12 days. This time last year it sat at 18 days. The explosion of mobile has contributed to this lasting trend. Immediate mobile updates have made closing the deal that much easier—and that much more competitive.
In May, 302 listings went under contract in 24 hours. In addition to flash sales, more homes are for sale. Higher selling prices and the potential fear that interest rates may rise have brought some sellers trickling into the market.
New Construction Adds to Craze
Buyers are competing to snag the new construction properties in Easy Bay and San Francisco communities. As builders release units, buyers enter the lottery hoping to be chosen—literally. Four new projects in San Francisco include 300 Ivy in Hayes Valley, One Rincon Hill Phase Two near the Bay Bridge, The Icon in the Mission and Linea-built projects in the Mission.
Glenn Kelman discusses numerous ways in which the Silicon Valley marketplace may be looking up—these are just a few. To all you Bay Area residents: What’s your next move?