More Bay Area Buyers Are Opting for Condos Instead of Pricey Homes
For many people, buying a condo is a solid first step into homeownership. But in the competitive real estate climate of the Bay Area, even condos are hard to come by these days.
As prices of single-family homes soar higher and higher out of reach, buyers are opting to look for condos instead of homes. But with so many people stretching their budgets to compete for condos, condo prices have also risen considerably, according to the Mercury News.
The median sale price of a condo in Santa Clara and San Mateo counties in April was $810,000, a 20 percent increase from a year prior. In Oakland and Emeryville, the median sale price of a condo was $575,000, a 4.5 percent increase over the previous year. Meanwhile, San Francisco’s median price rose to $1.17 million, a 2.7 percent year-over-year gain.
In addition to prices rising, inventory has also become low, a trend mirroring that of single-family homes. The Silicon Valley cities that saw the hottest activity in the condo market were Santa Clara, Sunnyvale, Campbell, and Cupertino. A total of just 380 new condos are on the market in Santa Clara and San Mateo counties combined. That marks a 40 percent decrease in inventory from the previous year.
In an effort to meet the increasing demand for condos, some Bay Area cities are undergoing a building spree. Approximately 3,000 new condo units have been approved and will be built in the South Bay, with about one-third of those homes in San Jose. Other cities like Campbell, Santa Clara, and Cupertino also have major construction lined up. San Francisco has 1,760 units currently under construction, with another 7,400 already approved. Oakland has 265 units under construction, with 1,060 approved.
But not all Bay Area cities are seeing more condos go up. Palo Alto, Los Altos, Mountain View, and Menlo Park have no units under construction. These cities are also highly sought-after among buyers, with median home prices far above $1 million.
For most interested buyers looking to purchase their first home, a condo is still likely the best bet. Even if the buyer ends up moving, the condo is likely to retain value as a rental or resale.