By Tim Hunt
Updating the state and valley housing marketsUploaded: Aug 17, 2017
David Stark, public affairs director for the Bay East Association of Realtors headquartered in Pleasanton, has broadened his annual real estate market update to include a helpful statewide perspective.
Speaking to the Pleasanton Men’s Club recently, he offered a full deck of PowerPoint slides to demonstrate just why the state is facing a huge housing crisis in most of California’s major metropolitan areas.
The Legislature faces several bills striving to deal with housing when it returns from its recess this month. It’s notable that housing, as a priority, was way behind jousting with climate change and renewing the state’s overly aggressive goals that will drive up the costs of gasoline and electricity—to say nothing about the 12-cent increase in the gas tax. Those took priority and left housing for the closing days of the first year of the two-year session.
The statewide problem is staggering—the state has been falling 77,000 units short of meeting demand for the last 36 years—yes, that’s a 2.7-million-unit shortfall that is more acute in the job centers. For instance, over the last six years, Los Angeles had the biggest gap between new jobs and housing units.
In the Bay Area, San Francisco saw 223,000 new jobs created with just 29,400 new housing units. In the South Bay, it was similar with 211,650 jobs vs. 37,095 new housing units.
There are other macro-trends such as 71 percent of the Baby Boomers have not moved since 1999 and people are now living 10 years in a home on average compared to the traditional seven-year turnover.
Homeownership nationally peaked at 69 percent in 2006 compared to 60 percent in California. Those numbers for 2016 are 63.3 vs. 53.8 percent in the expensive state. The long-term trend predicts by 2040 that 56 percent of Californians will be renters—a flip from the current situation.
After laying out the statewide and Bay Area challenges, Stark turned to the local market. The bottom line is that sales in Pleasanton have been very consistent between 610 to 630 units in each of the last six years. The median price is now at an all-time high, soaring past the previous high.
And, in every Tri-Valley city except for Livermore, most of the homes sold in 2016 were priced between $1 million and $1.5 million.
The market is healthy with homes selling very quickly and generally within a couple of percentage points (above or below) the listing price.
David closed with a chart showing the East Bay cities and median sales price. Alamo ranked No. 1 at $1.63 million; Danville was fifth (Lafayette, Orinda and Moraga were between the two San Ramon Valley cities) at $1.3 million. Pleasanton stands seventh ($1.13), San Ramon 10th $1.08 million, Dublin 11th at $1.07 million with Livermore No. 20 at 769,000.