Bay Area Home Sales Cool Off While Prices Keep Moving Higher
A continuing inventory shortage may be the primary reason why Bay Area home sales declined in October compared to a year ago, the first year-over-year drop in sales since February. But the limited number of homes on the market has also kept home price moving higher as we edge closer to yearend.
CoreLogic, the real estate information firm, reported that that there were 7,673 new and existing home sales in October (the most recent figures available). That’s down 2.4 percent from September and 2.5 percent from October 2015 – the first YOY drop in eight months.
Napa County had the biggest YOY decline at 23.6 percent, although the small number (just 94 sales) may have exaggerated the decline. Elsewhere, San Francisco home sales were off 9.7 percent, Santa Clara County -8.8 percent, San Mateo County -8.5 percent, and Alameda County -8.2 percent.
“This decline could be the result of lower affordability and also a still-tight inventory of homes for sale,” said Andrew LePage, research analyst with CoreLogic. But he noted that sales did increase in some of the Bay Area inland areas, home to the region’s most affordable homes.
To be sure, Sonoma County had the biggest increase in sales at 14 percent, followed by Solano County at 9.7 percent, and Contra Costa County at 8.2 percent. Marin County was the only other county with an increase in YOY sales, up fractionally at 0.6 percent.
The Bay Area median sale price continued to move higher in October, rising 4.3 percent from a year ago to stand at $635,000.
All Bay Area counties saw an increase in median prices, led by Alameda County with a 13.8 percent boost to $632,500. Napa County recorded a 13.4 percent rise to $567,000 and Solano County had a 13.2 percent increase to $339,750. Santa Clara, San Francisco, and San Mateo counties all had double-digit increases in median prices.
Below is a market-by-market report from our local San Francisco Bay Area offices:
North Bay – Although there is a general seasonal slowdown as we approach Thanksgiving, our Greenbrae manager is still seeing steady new sales coming in – just not at the frantic pace as earlier this year. Our Greenbrae/Larkspur offices have experienced a flurry of new sales over the last two weeks (26 to be exact) with very quick closes – from 7 to 10 days. It would seem there are a number of buyers who must close by the end of the year. Listings are staying on the market longer and many seeing offers the second or third week versus multiple offers the first week. Novato agents have seen a slight increase in activity over the past few weeks from buyers attempting to purchase before year-end. Our local manager is anticipating the traditional slowdown over the holidays, but agents are still seeing a few new listings coming to market during a time when there is less competition and fewer multiple offers. Our Sebastopol manager says there was a noticeable drop in attendees at open houses the Sunday before Thanksgiving, but the market remains healthy for this time of year. Many agents are busy showing properties and writing offers. We have a few sellers ready to come to market after the Thanksgiving weekend, and many others preferring to wait until spring. The general Southern Marin market has slowed, however offers and multiple offers are happening on the most desirable properties. The luxury market has slowed down as expected approaching the holidays. However, demand is steady and agents are getting a fair amount of activity above $2 million.
San Francisco – The market has shifted but is still strong, reports our Lakeside office manager. There was a bump in inventory after Labor Day that has slowly been dissipating. At the same time buyers have become more cautious impacted by international events and erratic stock prices. We are seeing fewer offers generally, and many times even when a property is well priced and well presented there may be no offers at all after the first 10 days, which is contrary to the experience sellers have learned to expect over the past 18 months. Nonetheless, the market appears to be strong, properties are selling and prices are holding near what they have been for the past quarter. However, sellers who have an expectation of prices higher than or even with recent comparable sales are being frustrated and sometimes failing to sell their property. Our Lombard office manager says the market was cooling in its own right, but now the holidays are compounding the slowdown. Still a few listing agents state, “I’m expecting at least x offers, don’t bother writing unless it’s at least $___.” A buyer’s agent ignored that, wrote under asking, was the only offer and ratified. Lots of different stories on both sides of the deals that wouldn’t have happened two months ago.
SF Peninsula – In San Mateo County there were 196 properties for sale Nov. 9-12 this year compared to 162 during the same period in 2014. There were 248 ratified sales during that period this year vs. 206 last year. We are still experiencing multiple offers (2-4) on properties appropriately positioned in the market and a higher number of offers in competition for prime properties. One Burlingame property received 10 offers with seven all cash. Another home in San Mateo had six offers. In both cases, most of the offers were substantially higher than the asking price. The market is steady for San Mateo. There is a slowdown in activity but our local office is holding steady with sale and listings.
Unfortunately, no report for the East Bay.