Price sluggishness, sales declines strike most of Bay Area housing market.
The Bay Area housing market turned noticeably sluggish during April, according to a report released May 30 that sketched a picture of flat prices and tumbling sales.
The median price in the Bay Area of a previously owned home remained unchanged in April at $900,000, compared with the same month in 2018, according to a report from real estate data firm CoreLogic. Sales of existing homes, though, sagged in the nine-county region, falling 7 percent year-over-year.
Home prices in the Bay Area have flattened out the past few months. In March, a record-breaking, seven-year streak of price gains came to an end.
That same month, home sales hit spring lows not seen for March since 2008. The slow-down in sales started in mid-2018, when more homes started to be put up for sale and prices no longer vaulted to double digit gains.
In April, several Bay Area counties saw both prices and sales decline. Santa Clara County led the slump, with sales dropping 13 percent and prices tumbling 7.7 percent. The median price fell from $1.32 million to $1.22 million.
Contra Costa County sales fell 11.3 percent and prices dropped 2.9 percent, from $649,000 to $630,000. In Alameda County, sales dropped 1.7 percent and prices dropped 1.8 percent, from $900,000 to $884,000. Bucking the trend was San Mateo County, which saw sales increase 0.7 percent and prices rise 1.8 percent, from $1.5 million to $1.53 million.
“There is definitely a rise in inventory, and homes are sitting on the market longer,” said Roxy Laufer, a South Bay residential agent with Sereno Group, a realty firm. “There is less urgency for buyers right now. Buyers have more choices.” That means buyers can be picky.
“It’s still location, location, location,” said Margaret Garber-Teeter, a real estate agent with the Walnut Creek office of Compass, a residential brokerage. Garber-Teeter added, however, that sales prices and the condition of the homes on the market also are crucial factors. “Houses that are in really good, interesting condition and priced within the stats are going out the door with multiple offers,” Garber-Teeter said. “People selling a house at the highest price, or overpriced, flat line out, and they don’t get those multiple offers.”
Prices in April also fell in Marin County, San Francisco and Sonoma County compared with April 2018, according to the CoreLogic report. Napa and Solano counties saw prices rise. “This isn’t really surprising,” said Kevin Swartz, a real estate agent with Sereno Group. “This is what I’m seeing on the local level, which is Sunnyvale and the surrounding cities. Last year, prices went up so high and the buyers took a step back because it just wasn’t affordable.” Plenty of buyers attended open houses in the final few months of 2018, but the tire kicking wasn’t followed up by purchase bids, Swartz observed. “There was a price correction,” Swartz said. “It is not a competitive market right now, so buyers are wondering if prices will continue to go down.”
The economy in the nine-county region remains strong. Over the 12 months that ended in April, the number of jobs in the Bay Area increased 2.5 percent — far ahead of the growth of the California job market of 1.6 percent over the same one-year period. “Interest rates are still great, the economy is still chugging along, the unemployment rate is very low in the Bay Area,” said Will Doerlich, broker-owner of Realty One Group in Livermore and Pleasanton.
Plus, in Doerlich’s view, buyers and sellers now have roughly equal strengths at the negotiating table.“It’s a more balanced, more even market,” Doerlich said. “It’s neither a buyer’s or a seller’s market.”
Buyers might even have a bit of an advantage, in Laufer’s view. “This is the best market that buyers have had for some time in terms of interest rates and inventory,” Laufer said. “More buyers are going to wait for what they want. I’ve seen buyers wait for 18 months or more before they settle on a purchase.”
Prices remain relatively firm for homes in desirable neighborhoods and in good shape and presentable, Swartz said. “Buyers are not purchasing homes that need a lot of work,” Swartz said. “The buyers expect new kitchens and bathrooms, and most sellers aren’t willing to do that. So the sellers have to lower the prices to attract buyers to those homes that need work.”
One East Bay home seeker, Deepa Chordiya, began looking in February for a three- or a four-bedroom home in Union City, hoping to stay within her budget of $700,000. At the outset of the search, she noted not that much inventory on the market and homes seemed priced at discounts from what she would have expected. Chordiya spotted a three-bedroom town-home in Union City listed for $750,000, but that was well above her budget, according to her Fremont-based realty agent, Sunil Sethi. Within weeks though, the sellers dropped the price to $699,000, which wound up being the purchase price for Chordiya, who moved in with her two children. “I was lucky,” Chordiya, 42, said.
Source: George Avalos, May 31, 2019