The second quarter started out hot on the heels of the first quarter this year. Buyers made aggressive bids in an attempt to stay ahead of the market, driving prices higher and higher. Sellers' and their agent's jaws dropped with non-contingent offers rolling in, often higher than mutually anticipated. There were sixty-seven transactions closed in April alone.
The tech industry continues to boom, which means more and more new hires are relocating to Silicon Valley. Situated right in the heart of the Valley, with many neighborhoods within walking distance of downtown, makes Redwood City an attractive option. There are scores of new startups moving right into Redwood City—including Box, Shazam, and Banjo —making the CalTrain station come alive with the hustle and bustle of commuters. In addition, new construction of commercial and residential buildings and hip spots, opening like Philz Coffee, are all building buzz around the recently revitalized downtown area.
Neighboring cities from Palo Alto up the Peninsula to Burlingame are getting more expensive and pricing many buyers out, and they are turning to up-and-coming Redwood City for their home search. However, many of these buyers are used to competing for properties selling for hundreds of thousands over asking price, often with all cash. They are bringing that level of cut-throat competition to the Redwood City market, and we're seeing homes sell for numbers way above and beyond the listing price.
Low inventory and low interest rates are also big factors in this competitive market. In April buyers were locking $1+ million dollar loans in the upper 2% for a 7-year ARM (Adjustable Rate Mortgage) and in the upper 3% for a 30-year fixed loan.
We saw the market slow down a touch in the second half of the quarter. In May, there were 63 sales and in June, 55 sales. This point in the calendar year traditionally sees a little less action with graduations, Memorial Day weekend, and the beginning of summer and vacation season. This year, buyers were likely licking their wounds from getting beat up in multiple offer situations in the first and second quarter. With summer rolling in, some buyers are holding off to see if there will be more inventory after the 4th of July weekend. We're also seeing a rise in mortgage rates as 7-year ARMs climb above 3% and 30-year-fixed at 4% and above. Combined with the increase in prices this quarter, budget-conscious buyers are pressing pause and adjusting their search criteria to find a home within their budget.