Tight inventory keeps Bay Area home prices high

Tight inventory drives up cost for 64th straight month

Bay Area home sales dipped in July to their lowest level for that month in six years.

Sales of houses, condominiums and townhomes were down 17.3 percent from June and down 2.6 percent from July 2016, according to the CoreLogic real estate information service. The drop signals that homebuyers across the region’s nine counties have been burning through the scant housing supply, which is at historically low levels.

The Bay Area “posted modest yearover-year gains in home sales this May and June, but a tight inventory and waning affordability have taken a toll,” said Andrew LePage, research analyst with CoreLogic.

As sales dropped, prices rose again on a year-over-year basis — for the 64th straight month. The median price of a home was $758,000, up 9.1 percent from one year earlier.

For the past six months, CoreLogic, reported, the region has posted year-overyear gains in the median sale price between 6.4 percent and 10 percent. The av-

erage gain was 8.5 percent — up from an average yearover-year gain of 5.6 percent during the same six-month period of 2016.

“The supply-demand imbalance has been the main driver of rising prices,” said LePage. “So far this summer, and for most of this year, the median price has risen at a slightly higher growth rate than last year. The rise in mortgage interest rates over the past year exacerbates the affordability challenge home shoppers are currently wrestling with in one of the nation’s priciest housing markets. While last month’s median price rose about 9 percent year over year, the mortgage payment — principal and interest — paid on that median-priced home increased about 16 percent.”

Here are some highlights of the report.

In Santa Clara County, sales of all homes — single-family, condominiums, townhomes — were up 9.3 percent in July from the year before. But they were down in San Mateo County (a 5.5 percent drop), San Francisco (6.5 percent), Alameda County (5.2 percent) and Contra Costa County (4.9 percent).

Median prices — again, for all kinds of homes — rose 9.2 percent year-overyear to $950,000 in Santa Clara County. In San Mateo County they were up 6.6 percent to $1,150,000; in San Francisco, up 5.0 percent to $1,207,000; in Alameda County, up 10.2 percent to $760,500; and in Contra Costa County, up 6.6 percent to $565,000.

Looking only at singlefamily homes, similar patterns held. Year-over-year sales were down 1.9 percent across the region, but the median sale price jumped 10.1 percent to $804,000.

In Santa Clara County, year-over-year sales leaped 13.0 percent and the median price jumped 11.0 percent to $1,097,000. In San Mateo County, sales dropped 9.9 percent while the median rose 4.8 percent to $1,310,000. In San Francisco, sales fell 10.2 percent and the median fell, as well: by 3.4 percent to $1,222,500. Now the East Bay: In Alameda County, sales of single-family homes dropped 6.1 percent from the year before, while the median grew 11.2 percent to $825,000. In Contra Costa County, sales dipped 6.7 percent and the median jumped 8.3 percent to $585,000.

The region’s most affordable area for a single-family home was Solano County, where the median price was $410,000. Yet even that price was up 13.9 percent from July 2016.