Really hot and really cold. That’s the story in the San Francisco Bay Area residential land sub-markets right now. And the temps are only getting more extreme.
- Sizzling HOT: The primary Bay Area sub-markets, the areas within a 20-30 minute commute from the Silicon Valley and San Francisco, are currently driving the homebuilding market. Property values have come off the ground and new home sales are picking up to relatively healthy levels. In the Cities of Sunnyvale, Mountain View and Palo Alto, projects across the spectrum are achieving a sales velocity of 1 sale per week which has led land values to climb back to over $3 million per acre.
- Example deal: Land Advisors recently represented the buyer and the seller in the sale of 19 partially improved lots in Los Gatos, known as Highlands of Los Gatos.
- Brrrrr COLD: The Bay Area’s tertiary sub-markets tell a different story. New home sales are lagging, land values are deteriorating and the market has yet to hit bottom. Areas with little or no interest from homebuilders or developers include Oakland, Oakley and Pittsburg.
- A particular area of interest for land buyers is in luxury lots. With prices off 50% from peak levels, handfuls of buyers are showing up for a chance to buy bulk lot sales emerging from distressed situations in A+ locations.
Source: Steve Reilly, Marketing Consultant, (925) 368-3128