Kathleen Pender: The median Bay Area home price hit a record high for the second consecutive month in May, rising in every county except San Francisco.
The median Bay Area home price hit a record high for the second consecutive month in May, rising in every county except San Francisco.
The median price paid for a new or existing home or condo in the nine-county region reached $700,000 in May, up 1.4 percent from April and 6.3 percent from May of last year, according to CoreLogic.
Prices rose on both a month-to-month and yearover-year basis in every county except San Francisco. The San Francisco median price fell to $1.13 million, down 13.3 percent from the previous month and 2 percent from last April.
Month to month, prices can be volatile. In April, the median price in San Francisco rose 13 percent from March, so the median price for May was just $23,000 shy of the March price.
San Francisco Realtor Brendon Kearney said there is some weakening in the San Francisco market.
“It’s definitely not as hot as usual” for this time of year, he said. “It’s very microclimate hot. I have had buyers pay 30 percent over asking to get the condo they wanted. I have had condos sitting 20 days on the market with no activity.”
As for those micromarkets, “we are definitely seeing softening in the $3 million-plus market,” said Kearney, who is with Vanguard Properties. A home in that price range that used to take 14 days to sell is now taking 28 to 35 days, often after price reductions. “It’s a sweet spot” if you are a buyer who can afford a $3 million house. “I am still seeing a tre-
mendous amount of competition for wellpriced, well-presented homes in the $800,000 to $1.5 million range,” but they have to be in nearly perfect move-in condition.
At the other end of the spectrum, there is strong demand from developers and flippers for “complete fixers.” Last month Kearney sold 26 Eastwood Drive, a two-bedroom, one-bath home in Westwood Park that needed new electrical, plumbing, foundation repairs and $100,000 worth of pest work. He listed it on a private network for agents and had more than 20 developers come through. It sold for $1.1 million without ever going on the Multiple Listing Service.
Kearney said there is less demand for homes that need cosmetic fixing and for condos in and near the South of Market area. “They are not moving as fast as they were at the price point we would expect. It’s a very first-time home-buyer market, a very techdriven market. With a shift in VC funding, we are seeing less activity there.”
For the region as a whole, sales were slower than normal for this time of year. Sales typically rise between April and May, by an average of 6.8 percent. This year, 7,888 sales closed in May, up only 3.2 percent from April and down 4.2 percent from last year.
Year-over-year, sales fell in the higher-cost counties (Alameda, Marin, Santa Clara, San Francisco and San Mateo) and rose in the lower-cost ones (Solano, Napa and Sonoma). They were basically flat in Contra Costa. “That is people getting priced out (of higher-priced areas) and having to move further east or north,” said Andrew LePage, a research analyst with CoreLogic.
In a report out this week, Patrick Carlisle, chief market analyst with Paragon Real Estate Group noted “a significant shift in Bay Area employment numbers.” He said that employment in San Francisco, San Mateo, Alameda and Contra Costa counties fell between December and May by a total of 5,000 jobs. This is the first time since 2009 that employment in these counties declined in the first five months of the year. He cautioned that these are short-term numbers that don’t necessarily signal a longterm trend.
By county, employment fell by 2,500 jobs in San Francisco, 1,900 in San Mateo, and 600 in Alameda. It was basically flat in Contra Costa.
“Changes in employment figures, up or down, typically affect the rental market relatively quickly and dramatically — more so than the realestate purchase market — and that certainly appears to be the case in San Francisco, where softening demand and rents have been widely reported,” Carlisle wrote.
This month I reported that free rent and other incentives have been popping up around the Bay Area, thanks largely to a surge of new apartment buildings hitting the market this year.