Home prices fall, hint to­ward mar­ket cor­rec­tion

Times-Herald (Vallejo) - - LOCAL NEWS - By Louis Hansen

Fewer houses for sale, less buy­ing and an­other monthly dip in prices could be bring­ing a mod­est cor­rec­tion to the sky-high Bay Area hous­ing mar­ket.

The me­dian price for a sin­gle family home in the nine-county re­gion fell nearly 3 per­cent to $805,600 from the pre­vi­ous Oc­to­ber, ac­cord­ing to real es­tate data and list­ing firm Zil­low. The me­dian price of a home in Santa Clara County — home to Stan­ford Univer­sity and head­quar­ters of tech giants Ap­ple, Google, Hewlett Packard and oth­ers — con­tin­ued a 10-month re­treat, fall­ing 5.9 per­cent to $1.08 mil­lion.

Zil­low se­nior econ­o­mist Ch­eryl Young said some parts of the Bay Area have hit an “af­ford­abil­ity ceil­ing,” and that the de­clin­ing prices could be seen as a small mar­ket cor­rec­tion af­ter years of soar­ing values.

“We’re start­ing to see things slow down,” Young said, “but that doesn’t mean it’s less ex­pen­sive in some of these ar­eas.”

The trend lines for the re­gion’s home sales still show strong de­mand and lim­ited sup­ply, ben­e­fit­ing long-term own­ers and send­ing en­trylevel prices higher in some com­mu­ni­ties. But year-overyear me­dian sin­gle family home prices in the Bay Area have been slid­ing since June, ac­cord­ing to Zil­low data.

Me­dian prices edged up 1.4 per­cent in the more af­ford­able sub­urbs of Con­tra Costa County to $650,800 and jumped 3.3 per­cent in the re­gion’s most ex­pen­sive city, San Fran­cisco, to $1.4 mil­lion.

But prices dipped else­where: San Ma­teo dropped 1.4 per­cent to $1.31 mil­lion; and Alameda slumped 1.2 per­cent to $855,200, ac­cord­ing to Zil­low. Price cuts have be­come more com­mon in some cities. Zil­low data shows that in San Jose and San Fran­cisco, more sell­ers were will­ing to cut their prices this year than last.

Young said the re­treat in Santa Clara County prices sug­gested high list­ings have been un­sus­tain­able over the long-term, with af­ford­abil­ity a big con­cern for buy­ers.

“There’s not a lot of sup­ply out there,” Young said.

Homes on the mar­ket are still sell­ing quickly. Homes typ­i­cally sold at the same pace in Oc­to­ber as they did the year be­fore. Houses listed in Alameda and San

Fran­cisco took 15 days to sell, and took 12 days in San Ma­teo County, the same as the year be­fore, ac­cord­ing to data from the Cal­i­for­nia As­so­ci­a­tion of Real­tors (CAR).

In Santa Clara County, homes took an av­er­age of 18 days to sell in Oc­to­ber — four days longer than the pre­vi­ous year, ac­cord­ing to CAR. Con­tra Costa County homes went from an av­er­age of 16 to 17 days on the mar­ket dur­ing the same pe­riod.

Lo­cal agents say the mar­ket has set­tled into a less­fren­zied, more-pre­dictable pace. Buy­ers are more cau­tious. Nan­cie Allen, an agent with MasterKey in Fre­mont, said tight in­ven­tory is lim­it­ing buyer choices, and homes priced com­pet­i­tively move quickly. Still, fewer home sales and bid­ding wars have calmed buy­ers. “It feels like ev­ery­one is tak­ing a breath,” Allen said.

Com­pass agent Mark Wong of Saratoga said Santa Clara County homes near tech com­pa­nies re­main pop­u­lar with young, pro­fes­sional fam­i­lies. For ex­am­ple, a home in Saratoga re­cently listed for $2.2 mil­lion re­ceived 17 of­fers, and sold in about a week for $2.6 mil­lion, he said.

But other prop­er­ties have been sell­ing closer to list­ing prices. For homes in good school dis­tricts “the mar­ket is still pretty hot,” Wong said. “There’s still a lot of buy­ers who want to buy.”

Wendy and Ai­dan Leu are in­for­ma­tion tech work­ers who bought a four-bed­room home in Sun­ny­vale in Oc­to­ber. They worked their way up the prop­erty lad­der, first buy­ing a condo in 2006 and trad­ing up for a town­home in 2014.

Wendy Leu, 40, a Bay Area na­tive, said the family wanted more room for their chil­dren, ages 8 and 10. They also wanted to en­sure the right school dis­trict for their kids — Cu­per­tino Union.

The cou­ple had a key ally — Leu’s par­ents in Cu­per­tino, who let the family stay with them for four months while they sold their town­home and looked for a sin­gle family house.

The town­home sold for about 50 per­cent more than they paid for it, and that helped them go on a home search with a bud­get of around $2 mil­lion, Wendy Leu said. The family spent two full days look­ing at about a dozen homes in the Cu­per­tino Union School Dis­trict.

The search was eas­ier than they had five years ago, Leu said, when ev­ery home sold “su­per quick, su­per high.”

They landed on a re­mod­eled four-bed­room, three­bath­room home just a few miles from her par­ents. At $1.83 mil­lion, they felt like they got a good deal. “I fell in love with this house,” she said.

Lo­cal agents say the mar­ket has set­tled into a less-fren­zied, more-pre­dictable pace. Buy­ers are more cau­tious.

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