Home market starting to cool?

Monthly sales drop 20% from previous December; median resale price gain just 1.3%

The seven-year fever driving up Bay Area home prices might finally be breaking.

The number of home sales in the ninecounty region last month plunged 20 percent from the previous December, marking the slowest holiday month in 11 years, according to a report released Thursday from real estate data firm CoreLogic.

And after months of price gains exceeding 10 percent, the median resale home price in the Bay Area in December grew just 1.3 percent year over year. Cautious buyers in the country’s most expensive housing market waited for better deals or refused to sign budget-busting mortgages, agents say.

“There’s been a major downshifting in the market,” said CoreLogic analyst Andrew LePage. Mortgage rates hit a seven-year high in November, and a volatile stock market affected buying power, he said.

But, LePage added, “There’s still a lot of potential buyers for every house.”

Santa Clara County, home to Apple, Google and other hugely profitable and expanding tech giants, saw home prices plummet 10 percent in December. In 2018, sale prices in the county regularly rose by double digits through the spring and summer.

The median resale price for a home in Santa Clara County dropped to $1.06 million.

Year- over-year prices fell in three other Bay Area counties: Prices dropped 2.5 percent to $1.33 million in San Mateo, 5.2 percent to $632,500 in Napa and 6.6 percent to $590,000

in Sonoma.

Other counties notched gains: Contra Costa rose 2.8 percent to $ 557,000, and San Francisco increased 11.5 percent to $ 1.45 million. Alameda County’s median price stayed flat at $ 800,000, according to monthly data.

Overall, the median sale price for an existing home in the Bay Area in December was $775,000, down from a peak of $935,000 in May.

Even investors have cooled on the Bay Area, with just 16 percent of December’s purchases made by absentee buyers, down from a peak of 29 percent in February 2013.

Agents say buyers are unable to stomach higher prices and are waiting for deals. Sellers are receiving fewer offers on homes, and house hunters who haven’t given up hope are finding some relief.

“My phone’s not ringing like it did six months ago,” said agent Matt Rubenstein with Compass Real Estate in Contra Costa County. The dip in interest is typical around the holiday season, he added, and sales remained strong for good neighborhoods.

Santa Clara County agents report homes staying on the market longer and sellers making more concessions. The close proximity to tech companies and good schools still makes the area de- sirable. And even in this cooler market, Bay Area home prices have risen every month, year- over-year, since April 2012.

Alan Barbic, president of the Silicon Valley Association of Realtors, said agents are counseling sellers to lower prices and are urging potential buyers to keep looking.

“In the last few years, you just had to list something and it was gone,” said Barbic, an agent with Sereno Group in Los Gatos. Today, he said, “We have some work to do. We have to roll our sleeves up.”

Barbic helped one couple in their 30s for several months last year, he said. Despite earning high incomes from tech companies, the couple struggled to compete with all- cash bids, sometimes $300,000 above the asking price, on homes they liked in Mountain View and Sunnyvale, he said.

They dropped out of the market and continue to rent. “They got really disillusioned,” Barbic said.

Sandy Jamison of Tuscana Properties in San Jose said sellers are looking for peak prices, while buyers are looking for discounts. She has seen deals collapse over $ 10,000 price differences. “I have a lot of sellers waiting,” she said.

Jenny Flores listed her San Jose home in December and has been willing to wait for the right deal. She asked $1.1 million for her four- bedroom, twobath house in the Los Paseos neighborhood and received one low offer. Flores turned it down.

“My house is priced right,” said Flores, a single mother who works in marketing for a local builder. “It’s just the wrong timing.”

The drop in interest doesn’t mean she will drop her price, she said. Flores expects to have the house sold by March. “The Bay Area is always short of housing.”