Home sales shift to ‘neutral’

More Bay Area buyers taking wait-and-see approach; median prices drop in many counties

Bay Area home sales swooned in June, tumbling to recession levels of a decade ago as buyers grew increasingly weary of skyhigh prices and scant choices.

Sales of existing homes in the Bay Area fell 13% last month from the previous year, according to real estate data firm CoreLogic. Last month’s sales were the lowest for June since 2008, when the real estate market collapsed and the U.S. economy dove into a deep recession.

Year-over-year sales dropped 14.6% in Santa Clara County, 21.6% in Contra Costa County, 14.9% in Alameda County, 8.9% in San Mateo County, and 21.7% in San Francisco County, according to a CoreLogic report released Friday.

“Across the board, prices have hit a point where people have stopped responding,” said CoreLogic analyst Andrew LePage. Despite lower interest rates and more homes for sale, transactions

have become sluggish, he said.

Median sale prices in June for existing homes dropped 2.2% in the ninecounty Bay Area from the previous year, the biggest dip since February 2012, according to CoreLogic.

Santa Clara County home prices led the retreat, falling 5.3% in June and marking the fifth straight month of declining prices in the techheavy county.

Even as prices cooled across the region for the second straight month, the median sale price was $900,000, among the tops in the country. It’s down from a peak of $928,000 last May.

“We’ve shifted from a sellers’ market to a more neutral market,” LePage said.

The region’s slipping home prices were led by a drop to $1.25 million in Santa Clara County, a 2% fall to $926,000 in Alameda County, and 1.6% drop to $625,000 in Sonoma County.

But buyers had less sticker shock in Contra Costa, San Mateo and San Francisco counties. Median sale prices rose 2.3% to $665,000 in Contra Costa, grew 3.3% to $1.55 million in San Mateo, and increased 1.9% to $1.58 million in San Francisco.

Local agents say the market has remained soft but stable in recent months. Brokers report price drops on some properties, as sellers have been forced to ratchet down expectations. More buyers have taken a wait-andsee approach since prices peaked last year.

New wealth from tech IPOs has not jolted the market, and many economists and real estate veterans say any effects are likely to be small and localized.

Alan Wang, an agent based in Santa Clara, said the Peninsula market has remained steady, with a few standouts and fallbacks. Sunnyvale, Cupertino and Los Gatos homes remain a favorite destination for tech workers, he said.

But Wang has seen buyers avoiding townhomes and condos in favor of single-family homes, even if they have to stretch their budgets and mow their own lawns. Homeowner association dues can add significant monthly costs to the properties, he said.

Condo sales in the region fell 10%, and the median sale price dropped about 6% to $720,000, according to CoreLogic.

“They’re not selling,” Wang said.

Wang sold a two-bedroom townhome in Campbell last year for $915,000. This year, a neighbor in the townhome community asked him to sell a similar unit. Wang listed the property at $899,000 and had little interest for months, he said.

Finally, they advertised the property at a belowmarket “teaser price” of $499,000, designed to ignite a bidding war. The price drew plenty of interest, but only 2 of 18 offers came in over $700,000. The property sold for $722,000.

Alan Barbic, an agent and president of the Silicon Valley Association of Realtors, said some sellers are still yearning for last year’s peak prices. Many are finding the reality of this year’s market quite different, he said.

Despite the recent doldrums, Barbic says homebuyers must be prepared for a competitive market, getting preapproved for a loan and willing to bid quickly on a property they like.

“When you find that house,” he said, “you have to be ready to go.”

In the East Bay, agent Nancie Allen said high prices have meant more renters staying put, and adult children living with parents.

“They really are getting priced out of the market,” said Allen, president of the Bay East Association of Realtors.

Homes are sitting longer, she said. For example, homes in Pleasanton last June took an average of two weeks to sell. This year, a typical Pleasanton sale took 30 days.

After seven years of frenzy and higher prices, “It’s almost like a lack of drama,” Allen said. “It’s just a little more relaxed.”