Home prices still in a slump
Despite dip in median price and home sales, Bay Area ‘still a very tight market’
Dragged down by sluggish markets in Alameda and Santa Clara counties, Bay Area median home prices in May took their greatest swoon in more than seven years in a retreat from record-setting prices.
But bargain- hunters beware — though the 2.3% dip in year- over-year prices dropped the region’s median sale price for existing homes to $907,000, this still is among the priciest markets in the country, according to a monthly sales report released Thursday by real estate data firm CoreLogic.
“It’s still a very tight market. That hasn’t changed,” said CoreLogic analyst Andrew LePage. Many prospective buyers, even bolstered by lower interest rates and a strong economy, struggle to afford hefty down payments and mortgages, he said.
After a Bay Area record run of nearly seven years of rising prices, year- overyear sale prices have dipped or stayed flat since March. The last time the region’s median sale price fell by more than 2.3% was a drop of 2.8% in January 2012, according to CoreLogic.
Overall existing home sales in the nine- county region fell by about 1%. Transactions in tech-heavy and highpriced San Mateo and Santa Clara counties dropped 10% and 6%, respectively. In San Francisco, with a population of 850,000, 294 existing homes were sold in May, the same number as the year before.
Agents say buyers have become more cautious since last year’s peak, when
“If it looks dated (old kitchen or bath and flooring), homes are not moving.”
— Ramesh Rao, an agent with Coldwell Banker in Cupertino
the Bay Area median sale price hit a revised record of $928,000 in May 2018. Home shoppers are willing to wait for the perfect home before signing a big- figure mortgage, while other professional couples simply have been outbid and squeezed out, agents say.
The underlying friction — too little supply for too much demand — continues to spark high prices in some Silicon Valley neighborhoods.
Year- over- year, prices slumped in some core Bay Area counties in May, according to CoreLogic data. Median sale prices for existing homes fell 5.9% to $1.27 million in Santa Clara, dropped 3.2% to $912,500 in Alameda and slipped 1.5% to $1.53 million in San Francisco. The median sale price in Contra Costa County rose just 0.5% to $649,000.
CoreLogic estimated prices climbed 7% to $1.58 million in San Mateo County, eclipsing San Francisco. LePage said the San Mateo data is incomplete.
Homebuyers with patience and a strict budget still found deals.
Andrew Lipiansky, 35, was fed up with renting. The civil engineer moved back home with his parents in Danville for a year to save for a down payment.
He wasn’t looking for a castle — merely a way into the market to build equity. With a budget of less than $ 300,000, he figured it would be difficult.
After searching for about two months, he bought a one- bedroom, one- bathroom condo in Concord. At $235,000, it fit neatly into his budget. “It’s a really good deal,” he said.
He didn’t face a stiff bidding war, and his agent, Matt Rubenstein, gave him a set of tools to help him on fixer-upper projects.
Rubenstein said the Contra Costa County market has remained solid. He has sold nine properties in the last few months.
Buyers are slowly regaining some power in negotiations, he said. They have been making more offers contingent on selling their existing properties. And growing inventory has sellers making some concessions they didn’t have to make last year. “They’re having to be a little more receptive to it,” Rubenstein said.
Nancie Allen, president of the Bay East Association of Realtors, said Alameda County home sales vary by location. Sales in the city of Alameda have been strong, she said, while the Fremont market has been soft.
Fewer cash offers are being made, and buyers are more reluctant to get into bidding wars, she said. “We’re seeing buyers be more particular,” she said.
Ramesh Rao, an agent with Coldwell Banker in Cupertino, said sales have slowed in some neighborhoods popular with tech workers.
“More and more buyers know exactly what they want in a home,” Rao wrote in an email. Houses need to be updated with new appliances and features. “If it looks dated (old kitchen or bath and flooring), homes are not moving.”