Source: Los Angeles Times —
The San Francisco Bay Area has developed a famous (or infamous) reputation over the years for its housing prices, driven in part by the tech industry’s mammoth presence in the region, with cash-flush workers who could parlay stocks into down payments.
“Historically, the Bay Area has almost always had homes sell for more than asking price on average,” said Daryl Fairweather, chief economist for real estate website Redfin.com, in an interview with The Times.
But new data reveal that if not a buyer’s market, then the Bay Area is a more buyer-friendly market. Homes are, relatively, cheaper — and a similar pattern may be manifesting in Los Angeles.
The Bay Area already had notoriously high home prices when mortgage rates bottomed out during the COVID-19 pandemic, which threw gas on the fire as borrowers snapped up cheap loans.
“Sellers could just throw their house on the market,” Fairweather said, “and then a dozen buyers would show up and bid up the price of the home so the list price didn’t matter so much.”
By spring 2022, the average sale-to-list ratio, which compares the average sale price to the average list price, was over 113%.
In short, buyers were paying, on average, 113% of the listed price of a home.
But now a changing economic climate and disruptions in the tech industry have cooled the housing market; in December, San Francisco’s sale-to-list ratio dropped to 99.8%, indicating that more buyers were beginning to pay below the asking price.
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