How high can it go? Are we in a bubble? Is there a crash coming?
We’re talking about the red-hot Bay Area real estate market.
On Friday, KRON4 has some perspective from the South Bay where home prices are rising the fastest.
“I don’t think we’re in a bubble or a peak,” Windemere Real Estate Agent Rick Smith said.
The past president of the Santa Clara County Realtor’s Association Smith just sold a home in San Jose’s Burbank District. It was listed for $899,000 and sold for $1.25 million.
There were multiple offers.
“It’s an average home, three-bedrooms, two baths, 1,100 square feet,” Smith said. “The Burbank area is an up-and-coming area. There’s a lot of things happening nearby San Carlos Street, and it’s close to the Diridon Station where the new Google complex is planned.”
Prices for existing single-family homes in the nine-county Bay Area region are up 11 percent from a year ago to a record $893,000.
In Santa Clara County, which saw a 25 percent jump over last April, the median price is now $1,308,000, according to the real estate data firm CoreLogic.
Alameda is up 11.8 percent while San Mateo County grew 7 percent.
“Microsoft, Google, Facebook, Apple, all of these companies are making substantial investments in land and office buildings across the South Bay and Peninsula, and their message is they’re here and they’re here to stay and they are attracting top-flight people,” Smith said.
Smith says the association’s national research committee sees prices rising 8 percent per year for at least two more years.
He says inventory is up slightly but deals get done fast. The home he just sold was on the market for just nine days.
No matter how you spin it, this red-hot real estate market comes down to supply and demand.
There is a very limited supply and a seemingly insatiable demand.