Recently, the Silicon Valley Business Journal reported on an interesting trend in the Bay Area housing market, in which home prices have surprisingly begun to decline.
According to a report released last month by real estate database CoreLogic, the median price of Bay Area homes sold in July decreased MoM by a stunning 2.9 percent, from $875,000 to $849,625.
Santa Clara County also experienced a MoM decrease in median sales prices July, down from $1.112 million to $1.15 million. The largest decrease on a county level, however, was demonstrated by Marin County, where median prices dropped 5.2 percent to $1.1 million. Coincidentally, San Francisco experienced a 3.7 percent decrease to $1.3 million.
While no Bay Area counties experienced an increase in home prices, median prices in Napa essentially remained constant, down only $50 to $669,500.
Interestingly, YoY Bay Area median home prices rose in July by 11.4 percent, as a result of a 17.1 percent increase over the same period in Santa Clara County alone. That said, it may still be too early to tell whether or not the latest decline in home prices is indicative of a larger shift in the near future.
Still, this latest trend does exemplify the accounts of numerous Santa Clara County real estate agents, who’ve described witnessing a declining number of offers, houses remaining on the market for weeks on end, and even frustrated sellers lowering their original asking prices.
Holly Barr, an agent with Realty Sereno Group in Willow Glen who became known as the listing agent who represented a small, burnt-down home that sold for nearly $950,000, says, “We cut one $100,000.” Bar mentioned the market initially began cooling back in May, which is atypical for the area.
Barr went on to explain, “I think it’s been a little longer than a blip, so I also feel like it’s correcting itself in that sellers are not expecting what they would have gotten three months ago.”
While buyer fatigue has in fact been a topic of conversation in several interviews and real estate reports recently, the CoreLogic report mentioned earlier provides the first example of this concept being illustrated by data.
Other agents have chimed in, citing higher interest rates and immigration restrictions in the tech industry as additional factors that have had an impact on home prices. Doug Larson of Coldwell Banker in Cupertino explained, “For people coming from China and India, many spouses are not being allowed to work… To buy a house here, you need both salaries.”
While prices have begun to drop, however, the report also shows that sales have declined overall in the area, with the number of Bay Area homes sold in July down 10.2 percent MoM. Similarly, Santa Clara County home sales dropped by 11.6 percent during the same period. As for YoY sales, the Bay Area experienced a .3 percent decrease overall, while Santa Clara County saw a 7.1 percent decline.
George Saghafian of Realty One Group Infinity in Campbell said, “We haven’t had a ‘normal’ market since around 2002 or 2003 because it’s always been going up… We had a fast crash in there, but it went up again. So I think this market is taking a pause.”
As for whether or not July’s numbers are more than a simple pause, at this point, only time will tell. Saghafian believes there’s no reason to panic yet, explaining, “I don’t think we’re in a down trend unless we’re in for some bigger economic event, which I don’t foresee because Apple is doing good, Google’s doing good, Facebook is relatively chill.”
Are You Buying Or Selling A Property In The Bay Area?
At Intempus Realty, we pride ourselves on our solid reputation as one of the top real estate brokerages in the area! If you’re thinking about buying or selling in the San Francisco Bay Area, we’d be more than happy to help you navigate the market—especially now!
For more information about our Bay Area real estate services, please contact our professional team today!