Column: East Bay Real Estate with Nancy Bennett – Bay Area Employment is Up! So What Does This Mean for Housing Values?

August 20, 2014 14:00 pm · 23 comments



Today we’re taking a look at the real estate market in the Bay Area and East Bay, now that we’re nearing the end of August. A lot of predictions were made for 2014, and 8 months in we’re able to see what’s really happened so far – and what you may expect for early 2015.  Some interesting trends have emerged … We remain in a strong seller’s market, and there are good reasons behind our market strength. In fact, from my perspective those reasons may also predict how the market is likely to be … for most of 2015 …

Our economy is strong and employment is way UP (see SFGate). In the past 3 years, local unemployment rates have dropped by half in many cities.  In fact, it’s been predicted that “by the end of the year … San Francisco, Marin and San Mateo counties will see employment overtake its previous dot-com boom peak.” That’s HUGE and great news for all of us!

So how is this period of economic growth affecting real estate from San Francisco to Claycord and beyond?

Our thriving economy means tons of folks from across the US have been streaming into the Bay Area for the past few years, fueling local companies and capitalizing on the plethora of jobs. BUT – the supply of housing has not kept pace with this skyrocketing population growth. There are simply not enough homes for everyone!  

In addition to this squeeze, owning property in California is highly desirable to folks all around the world – it’s a good investment and it’s got cachet. The Bay Area attracts many international home buyers (see NAR report). Foreign buyers spent about $90 billion on US residential real estate in the last year, and California attracts the second highest amount of this foreign investment.

According to real estate market tracking/analysis firm Zillow, California home values rose more than 16% in the past year, and are predicted to rise about 10% more in the next year. In fact, home prices in SF and its 5 surrounding counties rose an amazing 47% over the past 2 years!! (SeeS&P/Case-Shiller.)

The soaring 2014 home prices in red hot San Francisco are pushing buyers out to the East Bay. Between April and June alone, the Bay Area saw a record number of homes and condos going for $1 million and above. For the majority of homes in the East Bay, the average sale price has increased so far this year – with a few dips here and there, as buyers got burnt out or summer vacations trumped home shopping.

In this competitive market an interesting trend has emerged: About 20% of homes sold in the Bay Area today are sold off the market. This is a big increase from last year, and it means a LOT of homes are being sold before they’re listed and promoted on the MLS.

What does this mean for you? To play in this market, your real estate agent needs to be very savvy and plugged in, and buyers will need to act fast and decisively while bidding competitively to snag a great home early. This is an important part of today’s Bay Area real estate market that every buyer and real estate agent needs to understand.

And finally … Remember all those January predictions that rates were going to rise substantially this year?

As of today, mortgage rates remain surprisingly low – averaging 4.12% for 30-year fixed as of August. Analysts are still predicting a rise in interest rates by year-end, but in the meantime, there is plenty of good news for buyers and sellers. It’s tough to predict where rates will be in December, but I’m loving that rates are actually lower this summer !!

Most research that I’ve seen predicts that the Bay Area will remain in a seller’s market for the next 2 to 5 years. Looking at all the factors driving market strength and affecting East Bay real estate, it’s my sense that this prediction is on target, barring some massive crisis. We will continue to have a short supply of homes for sale because of the factors outlined above … a strong Northern California economy, an increase in relocations and international real estate buyers, lack of new home development, and great interest rates.

If you can buy now, the timing remains good and I’d say everything points to your property appreciating nicely over the next 5+ years. If you need to sell now – don’t waste energy stressing over the gains you “could be making” if you were able to wait a few years – just rejoice in the gain that your home has likely experienced in the last few years and focus on choosing your new home and locking in your new loan at today’s interest rates.

Not able to buy yet? Just stay focused on your goal of home ownership and get your financial house in order!

Until next time … Nancy

Nancy Bennett, REALTOR, Keller Williams East Bay CalBRE 01399870

Nancy Bennett has over 20 years of sales and marketing experience, with more than 10 years selling real estate in the East Bay. She’s an award-winning real estate agent in Contra Costa County, the #1 Realtor in The Crossings neighborhood, and she heads up The Bennett Team – the leading real estate team at Keller Williams East Bay. She’s won the Five-Star Professional Award in Real Estate for 2012 and 2013.

Nancy is also a member of the National Association of Realtors, the California Association of Realtors, the Contra Costa Association of Realtors, the Fortune 400 Masterminds, and Contra Costa Realtors in Motion. She serves on the Agent Leadership Council, as well as being a faculty member and mentor to new agents at her office.

Nancy is a licensed foster parent and a volunteer with local organizations such as Meals on Wheels and Youth Homes in Walnut Creek.  For more information, please visit or reach Nancy directly at:


1 Dorothy August 20, 2014 at 2:37 PM

Not planning to buy or sell but it is getting harder to get people to work on my home. Been trying to get a painter for a couple of inside rooms – calls are ignored and not returned. Took 4 days to get an electrician. Apparently most of the good ones have nearly more work than they can handle and I won’t hire the unlicensed version.

2 Annon August 20, 2014 at 3:22 PM

We are selling our home in Dana Estates, I thought we would have multiple offers by now, our mistake we used an out of the area realtor, because we are going va.
he is not doing the job…..we are in contract for a new home…..i am nervous.

3 Stater of the Obvious August 20, 2014 at 4:12 PM

There are multiple factors that drive the housing market and employment is just one of them. Right now the banks are still sitting on a huge number of foreclosed homes and are only releasing a limited number onto the market each month…obviously they don’t want to flood it and cause a crash. Lending standards are also still very tight and fewer people, job or not, are qualifying for loans.

Prices in the EB have plateaued after a long steady run up but they are still well below the 2007 heights of craziness.

4 REGal August 20, 2014 at 4:47 PM

Dorothy – There are plenty of great, licensed contractors, painters and the like that are worth waiting for, especially if you are not selling soon. You can call me and my contractor crew will provide a quote and timeline that will work for you.
Anon – out of area realtors are not the best choice IMHO – they are not able to show your home within a reasonable time, may not know the area as well as local realtors and don’t have the relationships/marketing/open house expertise that you will find with realtors this city. There are plenty of great realtors out there to help you, hold your home open more often and get a marketing plan in place that targets local buyers directly.

5 SKS August 20, 2014 at 6:21 PM

Thanks Claycord. That means I can plan on raising rents.

6 Concord Mike August 20, 2014 at 7:43 PM

Good summary of the situation by Nancy Bennett. I agree we have several more years of good price appreciation ( and higher rents) here in
Claycord. New single family home construction ( what people want to buy) is being stymied by oppressive state and local regulations, so supply will remain short.

The one local wild card will be CNWS. If we get some major corporations to build campuses out here, prices and rents could really jump.

7 Julio August 20, 2014 at 8:05 PM

I wish the government would tell the truth. There is still a heck of a lot unemployed, underemployed and have quit looking they have been out of work so long. Home sales are at nearly a stand still right now and have been for a couple of months. Sorry Dorothy. We still have several neighbors with 3 generations living in one house due to unemployment.

8 comedy house stagers? August 20, 2014 at 9:41 PM

btw we don’t have private home ownership in this country. You can buy the personal home license, then lease it from the government, usually indefinitely. Don’t believe me? Try not paying your property taxes and you’ll find out who owns your house.

9 DWM August 21, 2014 at 6:50 AM

Fiancé and I make over 130k a year and we can’t buy a home. I’m not sure how other people are able to do it. And the rising rent isn’t helping me save more money. Plus cash investors just outbid you constantly. Homes should be for people trying to start families and not for private investors to flip or rent.

10 DWM August 21, 2014 at 6:57 AM

Something else that doesn’t jive with what you’re saying. You stated its a sellers market that’s driven by a shortage of homes. But a bit later you say it’s a good time to buy. I can see how, for a realtor, telling people to buy homes during a sellers market benefits the realtor and the homeowner but quite frankly the person purchasing is getting screwed.

11 How do people afford it? August 21, 2014 at 8:47 AM

My husband makes $180k plus bonuses. Our mortgage is about $2k per month and we live a pretty normal middle class lifestyle — nice enough, but no trips to Hawaii, no BMWs. How people afford these $650k++ houses, I do not know . .

12 Led August 21, 2014 at 9:09 AM

“That’s HUGE and great news for all of us!

So how is this period of economic growth affecting real estate from San Francisco to Claycord and beyond?”

By making it impossible for newcomers on middle-class (heck, even upper middle class) incomes to move into the area. Isn’t that great!? Oh, I guess by “all of us” you meant “all of us who already own property, or who make money on real estate transactions.”

13 hat with the Rent hikes? August 21, 2014 at 9:55 AM

SKS — Why would you want to raise rents? I mean besides greed.

inflation is not growing, and aside from the “must buy now” crowd that led us into the foreclosure debacle people are not making much more money than 3 years ago.

why would rents NEED to go up?

14 Shiloh August 21, 2014 at 10:14 AM

I think SKS was being sarcastic

15 Busy mama August 21, 2014 at 10:59 AM

Great summary Nancy B! Love this column and want to see more articles on things we can do to improve our homes and add value. We’re selling in about 2 years!!

DWM – it is a sellers market … EXCEPT that mortgage rates are so low and home prices are very likely to keep rising. That makes it a great time to buy, imo. I am SO happy i own my house!

Annon – it can’t hurt to at least talk to other realtors. see what your options are and walk away from a guy not doing his job well. Your need to get as much $s as posible for your house!!

16 DWM August 21, 2014 at 11:12 AM

Busy Moma
I’m happy that you’re happy about owning your house but buying a home in sellers market with investors heavily entrenched in bidding wars makes it next to impossible to buy a home at fair market value. My fiancé and I have credit score nearing 800 and our debt to income ratio is well below the standard 30%. We make over 130k after taxes and we are struggling to buy. There’s a very serious problem in the housing market.

17 Concord Dad August 21, 2014 at 1:27 PM

The current housing market is a bubble by every possibly definition. Basic economics make it pretty clear that it is not sustainable. This bubble will burst, just like they always do, and it’s going to be particularly painful since we don’t have the option to drop interest rates like we did the last time (they are already significantly lower), and I doubt that congress or the American people have the stomach for another TARP program.

18 Anon August 21, 2014 at 2:43 PM

Median Prices Fall in 13 of California’s Largest 26 Counties
Year-to-Date Sales Lowest Since 2008.

Please, see the link below:

19 Anonymous August 21, 2014 at 2:50 PM


You are working with the wrong Realtor/Lenders if that is the case. You sound like a prime candidate to me and I work in the mortgage industry…..

Give Mark Sheridan a call over at Landhome Financial – He is on the retail side and will definitely take care of you. I work in Wholesale with brokers directly so I would be of no use to you, but I implore you to give Mark a try. He is a champion amongst men and work somewhere around 20 hours a day… The guy will set you up properly.

20 B August 21, 2014 at 5:20 PM

Did anybody else notice how green the lawn looks? They didn’t cut down
on water use at all. Takes so much water to keep a lawn that green and lush!

21 City Girl August 21, 2014 at 8:57 PM

Dorothy #1 – Would you like the name and number of the guy who painted my interior last month? He’s always looking to work (6-7 days/week) and rarely turns down an offer. He is in Clayton.

22 Selling Now August 22, 2014 at 10:11 AM

We have our place listed now, and it is one of the lowest priced and has many upgrades. We have a great realtor, but there just do not seem to be a lot of buyers looking at this exact moment. We have been on the market for 2 weeks and had only 7 showing. The house next door had went on the market in July and had about 40 showing and 10+ offers and it did not have many upgrades all was contractor standard do it yourself type finishes…

I wish we would have got it on the market sooner.

23 Love Machine August 23, 2014 at 7:14 PM

Oh good, time to raise our rents. We have been holding steady for about 5 years now and feel our rents are still lower than the market allows. Time to give ourselves a raise!

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