CONTRA COSTA COUNTY, Calif. (KGO) -- When it comes to the Bay Area real estate market, things are heating up more than was expected at the start of 2020. Novel coronavirus is behind some of the surge in home buying.
Bidding wars are back in many neighborhoods across the East Bay as buyers get in the game because of low-interest rates. Those low rates could be sustained into the summer because of coronavirus.
Ben Bauer, a mortgage banker with Delta Lending Group explained that with millions of Chinese workers quarantined, the products they produce globally won't be shipped out as anticipated.
"That means U.S. companies don't have products to sell, which means it's going to slow economic activity and investors will seek bonds and bonds drive mortgage rates so mortgage rates will fall or stay the same. "
Abio Properties owner and agent Linnette Edwards said, "There's a buyer frenzy. Buyers feel very energized right now with the low interest rates. Last year in quarter four we had few buyers. This year we have a lot of buyers. And they are motivated. "
A frenzy of buyers, but little inventory on the market means bidding wars are back.
"We are seeing Castro Valley, San Lorenzo, parts of Oakland and parts of San Leandro over the asking price," Tina Hand, president of the Bay East Association of Realtors said.
Edwards said it's not uncommon to see homes in Alameda County now going 30 or 40 percent over the listing price.
"I had one in the Berkeley hills just last week. We were the lowest offer. It was listed at $1.3 million and we went in at $1.6," she said.
It's similar in parts of Contra Costa County that are close to the transit corridors.
Real estate agent Vicky Bearman said in, "Walnut Creek, Lamorinda, Alamo, Danville, and San Ramon there's just not enough inventory for the demand."
According to Hand, the prediction for the spring and summer ahead is, "if interest rates stay low and inventory stays low it will probably be a feeding frenzy again."
Mortgage interest rates have dipped to around 3.5% on some loans and the sweet spot for homes in this so-called feeding frenzy are those priced between $1 million and $1.5 million.