Key Takeaways From Pacific Union’s Real Estate and Economic Forecast to 2020

November 16, 2017

Yesterday, Pacific Union held its fourth annual Real Estate and Economic Forecast in partnership with John Burns Real Estate Consulting to project Bay Area activity through 2020. Below are some key, high-level takeaways from the live event. To watch the full one-hour presentation, click here.

Normal (up to 10 percent appreciation): Similar to last year, most Bay Area markets fall into this category, and median prices average about $761,000. These were generally more affordable markets, and no San Mateo County city falls into this category. Among cities with normal appreciation, an average of 56 percent of homes sold for more than asking price for an average 6 percent premium.

Double-Digit (10 percent to 20 percent growth): Unlike last year, double-digit percent median price growth was seen in many San Mateo County and Santa Clara County cities. Median prices averaged about $1.15 million. Many of these markets lost steam last year, but Silicon Valley’s strong job market helped prop them up. Buyer competition also increased, with 67 percent of homes selling for more than asking price for an average 9 percent premium.

Heated (20 percent to 40 percent appreciation): This year, two cities in Marin County — Sausalito and Tiburon — saw median price growth of more than 20 percent, a respective 22 percent and 28 percent. Overall, the median price in ZIP codes with the highest growth rates was $1.16 million, unlike last year, when the median price in heated markets averaged $800,000. Two ZIP codes that were heated last year continued at the same price growth rate: 94610 in Oakland and 94303 in Palo Alto. In Sonoma County, two of the fire-impacted cities, Glen Ellen and Kenwood, have also seen strong price growth in 2017.

Slowing (22 percent depreciation to flat): Although fewer cities saw slowing prices this year than last year, these are again relatively more expensive markets where the median home price averaged $1,900,000. Still, about 43 percent of homes in these areas sold for more than asking price, for an average 8 percent premium.

Selma Hepp is Pacific Union’s Chief Economist and Vice President of Business Intelligence. Her previous positions include Chief Economist at Trulia, senior economist for the California Association of Realtors, and economist and manager of public policy and homeownership at the National Association of Realtors. She holds a Master of Arts in Economics from the State University of New York (SUNY), Buffalo, and a Ph.D. in Urban and Regional Planning and Design from the University of Maryland.