Home prices up, sales down
September’s median price higher than 2017, but buyers wait as interest rates rise
Bay Area homebuyers facing ever-escalating prices are adopting a new strategy — watching and waiting.
The median price for an existing home in the nine-county region jumped 9.7 percent in September from the previous year, but more buyers are sitting on the sidelines and fewer homes are being sold, according to a report released Wednesday by real estate data firm CoreLogic.
Bay Area sales volume in September dropped nearly 20 percent, scraping lows not seen in the month for more than a decade. Interest rates on standard 30-year mortgages have also risen about 1 percent in the last year, driving up home costs and helping drive down sales.
“Sales have slowed quite a bit and inventory has increased,” said CoreLogic analyst Andrew LePage. “Some potential buyers are sitting this out and a significant number have been priced out.”
The runaway market has slowed, with median prices for existing homes down to $850,000 in September from a peak of $935,000 in May. But year-over-year prices continued to surge last month, according to CoreLogic data from Bay Area counties: median sale prices for resale homes jumped 11.6 percent to $1.2 million in Santa Clara, 20 percent to $1.5 million in San Mateo, 8.4 percent to $607,000 in Contra Costa, 8.8 percent to
$865,000 in Alameda, and 13.4 percent to $1.4 million in San Francisco.
Since January, yearover-year price gains have averaged 13 percent. Median sale prices have risen every month, compared to the previous year, since April 2012.
Sales volume tumbled 18 percent across the region. Sales in Santa Clara County, home to Apple and Alphabet headquarters, dropped 25 percent as prices rocketed out of reach for many buyers. San Francisco and Alameda counties both saw declines of about 14 percent.
In San Francisco County, home to 884,000 residents, fewer than 400 homes changed hands. Santa Clara County, with more than 1.9 million people, had 1,350 home and condo sales.
The Bay Area mirrors a statewide trend: CoreLogic data shows sales volume dipped across California last month by 17 percent, LePage said. “What we need is more affordable inventory,” he said.
Bay Area real estate agents are feeling the cooling trend. Homes are sitting on the market longer, and all-cash, as-is offers for properties in hot neighborhoods are less common, some say.
Homes in San Mateo and Santa Clara counties took an average of 13 days to sell, a few days longer than
“I’ve seen a pause in the market. Some of that is seasonal, some of that is interest rates going up, some of it is buyers just burned out.” — Gustavo Gonzalez, San Jose agent
last September, according to Sunnyvale-based real estate analytics firm Aculist. Meanwhile, the inventory of homes on the market increased 74 percent in Santa Clara and 29 percent in San Mateo during the last 12 months.
San Jose agent Gustavo Gonzalez said demand remains strong, but the lack of affordable inventory is taking a toll. Starter homes move quickly, but more expensive properties are sitting longer, he said.
“I’ve seen a pause in the market,” said Gonzalez, who sells in the East Foothills. “Some of that is seasonal, some of that is interest rates going up, some of it is buyers just burned out.”
Matt Rubenstein of Compass Real Estate in Contra Costa County said buyers are snapping up starter homes in the $500,000 range. Young couples without children and older empty-nesters have been active in Concord, he said.
“We’re seeing a peak. Markets go up and markets go down,” he said. “Be prepared to ride it out.”
The search remains agonizing for many, involving intense planning and financial sacrifices to buy a piece of the Bay Area. Despite slowing sales, competition remains tight for homes near tech headquarters in San Mateo and Santa Clara counties. Bargain hunters in the East Bay are watching record prices approach $1 million for the typical home.
Samantha Tomaszewski, 31, moved back into her parents’ house in Clayton for a year to save for a down payment. She endured a three-hour daily commute by car and train to get to work as an administrative assistant in San Francisco.
Tomaszewski wanted a condo close to a BART station in Pleasanton. She spent months combing through real estate websites, looking for something she could afford.
Her first visit was to a renovated one-bedroom, one-bathroom unit. She was smitten. “It pretty much checked all the boxes,” she said. She offered $360,000 — the top of her budget — to clinch the deal.
Tomaszewski picked up the keys in late September. “A year ago, I would have never imagined doing something so life-changing,” she said.
She could not have done it without the support from her parents, but, she added, “I’m ready to move out.”