5 ways to successfully buy a home in Bay Area

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Real Estate

Hello there. I am Nagaraj Annaiah, your trusted realtor in the Bay Area. Here are the top headlines of the week. Bay Area homes have become less affordable as interest rates rise. SB9, the new housing policy that allows splitting large lots is sparking backlash in anti-growth communities. Napa, Sonoma, Marin, Solano rents jump, burdening tenants and landlords. Santa Clara County leaders approve $75.5M to build six new affordable housing projects. Marin County encourages developers to apply for affordable housing funds. California home in Bay Area Tech Enclave lists for $110 million. All-white bathrooms are the new trend for 2022. California homes could be overvalued by 9%. And the big story for this week? How to successfully buy a home in the Bay Area despite the increasing competition. Besides, I will also look at the latest realty trends in five happening counties of the Bay Area. If you have any property-related query, I would love to hear your comments. And if you are planning to buy or sell a home in the Bay Area, call me now. 

How to successfully buy a home in the Bay Area

Did you know that 66% Americans failed to buy a home due to the hot property market in the Bay Area? Thanks to record-low inventory, sky high prices and low mortgage rates, 2021 taught quite a few lessons for those who couldn’t buy a home. However, here are five tips to overcome the common barriers, and increase your chances of buying a home in 2022.

Be competitive

When you want to close a deal, you have to use everything at your command to go under contract. Besides making competitive offers, make the transaction as smooth and convenient as possible for the seller by offering a mortgage preapproval, pushing for speedy closer, and buying the home in its current condition without asking for any changes. Importantly, hire a local realtor like me to ensure that your offer is more likely to be seen and considered by the seller.

Settle for less perfection

In a hot market, it hurts to be choosy. The more you delay, the higher will be the price of the house as days go by. Be flexible, and buy the house, even if it’s less than perfect. The money saved in making the quick purchase will more than make up for the shortcomings. One rule of thumb is to compile a checklist of things you are happy to compromise with, such as the additional car garage, or a finished basement.

Buy now

If you think that prices will come down this year and continue to play the waiting game, you will never be able to close any deal. With low inventory, the prices are only going to go up. So buy now, if you have the money. You will thank me later.

Be prudent

Always remember to keep 20% extra while buying a home. Trying to borrow more than you can pay could land you in financial trouble. Therefore, conduct a proper home affordability study before you enter the market, because the going will not be easy. You need to have extra cash to close the deal.

Borrow intelligently

Explore every option available to you before deciding to buy a home. Did you know that you can pay 3-5% down payment, if you go through a realtor like me?

I have closed more than five properties for less than 5% as down payment. Besides, I have completed a couple of transactions for people who had a credit score of 10, thanks to my relationship with a few lenders. During such property shopping scenarios, a realtor with mortgage knowledge always comes in handy. And that's how I personally make a difference in all my sales. 

California homes could be 9% overvalued

California homes could be 9% overvalued, according to Fitch Ratings. In a hot property market, most properties tend to be over-valued, if we compare the housing demand, available jobs, and salaries. When California home prices went up 21% last year, the median-price of a single-family home also zoomed from $674,000 to $809,000. California is not the only state in the US with unsustainable rates. U.S. prices were up 19.7% in 2021, with 10.6% over valuation. Giving California some company in the 5%-9% overvalued category are Nevada (prices up 24% in a year), Vermont (23%), Georgia (20%), South Dakota (20%), Texas (19%), Connecticut (18%), Oklahoma (17%), Michigan (17%), Kentucky (16%), Nebraska (16%), New Mexico (16%), Virginia (15%), Delaware (15%), Wyoming (15%), Pennsylvania (15%), Minnesota (14%), Mississippi (14%) and Maryland (12%). According to Fitch, the prices will cool off this year, and U.S. prices may only rise up to 7% in 2022 compared to 16.5% last year. That’s good news for home buyers. So buy now before the prices inch up again.


The mortgage rate is steadily climbing every week. Every day, in the last week, the average 30-year fixed rate is still at its highest level in more than two years. However, the mortgage delinquencies have fallen below the March 2020 level of 3.6%, indicating the country’s rising income graph. But foreclosure rates have remained historically low due to the high equity of borrowers, thanks to the chartbusting home prices in the last one year.

Mortgage applications went up 12% two weeks ago, but came down 10% last week. The Refinance Index also fell 7% from the previous week, and was 52% lower than the same week in 2020. This trend has prompted many renters to buy homes as the average monthly rents have gone up 14% in December 2021, and touching $1,877. Homeownership is the best way to combat inflation and create wealth. But higher rents are preventing buyers from saving up to purchase a home.


The median price of a single-family home in the nine-county Bay Area hit $1.2 million in December, up 13% from 2021. Here is where realtors like me have one advantage that the layperson does not. We have access to MLS listings that give a bird’s eye view of the realty scene in all the nine happening counties of the Bay Area. The MLS data highlights the new, pending and sold listings from 2020 to 2022, so you get an idea of the realty market’s highs and lows. Let’s start with Santa Clara, the market leader in real estate in the Bay Area. With over 13161 active listings, 531 new and 318 pending, 180 of the properties on the market were sold last week, which is 20% more than last week. 

San Mateo is next with only half the active listings as Santa Clara, and yet it's still the second-best county in Bay Area with 738 active listings, 227 new, 130 pending, and 67 properties sold, which is the same as last week. Monterey figures next with 490 active listings, 100 new, 35 pending, and 68 sold, which is 15% more than last week. Santa Cruz takes the fourth spot among the five counties of the Bay Area that I am covering this week. Out of the 305 active listings, 72 were new, 22 were pending, and 21 were sold, which is surprisingly less than half from last week. San Benito County is last at 110 active listings, 27 were new, 9 were pending, and 9 properties were sold, which is 40% less than last week. 

If we look at San Mateo, the second most happening county in the Bay Area for single family homes, you will get a closer look at what’s happening on ground. In San Mateo, the average days on market came down from 27 days in Feb 2021 to 24 days in January 2022, which is a 10% decrease. The sale to list price is a little over 110%. The months of inventory has come down from 2.6 in May 2020 to 1.1 in January 2022. The number of single-family homes for sale were 246 while 220 houses were sold. The demand-supply has surprisingly come down in January compared to December last year where 390 houses were sold while only 205 were put up for sale. What is different are the high prices of $2,610,055 that the county managed in January, which are slightly less than what it did in December 2021 at $2616,690.


Agreed that it’s always been tough to buy a home in the Bay Area. But there are ways to stymie the competition. Did you know that you can buy homes with just 5% down payment or buy a house with a low credit score? These are tips that only a local realtor like me can offer you. So what are you waiting for? Call me to iron out all the wrinkles in the process of buying and selling homes in the Bay Area. See you soon in the next episode. Until then, stay safe, and mask up.