New and Below $730K, Condo Marketer Sees Low Supply

SAN FRANCISCO-Increased demand and limited supply will trigger price movement in new Bay Area condominiums priced under $729,000, according to a new report by Pacific Marketing Associates, a provider of sales and marketing services for urban residential real estate developers in the Bay Area. PMA founder Paul Zeger says several factors are pushing average sales prices up in that mid-range market.

“If you want new construction, demand will soon outstrip supply, but other factors such as interest rates and availability of home loans will also have an effect,” Zeger said. “Year-over-year sales are up for the second straight month in many markets, such as Contra Costa County and specifically, Walnut Creek, along with price increases from Oct. 2009 to Nov. 2009 of 8.5 percent.”

Inventory of new condos priced less than $729,000 is not being refilled, he says, so current sales are depleting inventory rapidly, and are likely to raise prices for remaining product. To back up his thesis, Zeger points to three projects in the East Bay, all of which it represents.