For a few months, it seemed the speeding Bay Area housing market was ready to slow down.
Agents reported sluggish sales and longer market times. Buyers had just a few more options.
But any buyer relief was short-lived — median sale prices for existing Bay Area homes surged 4.9% year over year in January, according to a report released Thursday from CoreLogic. The region’s highest-in-the-nation home prices sent many shoppers to the sidelines, and overall sales dropped 12.8%, hitting lows not seen in a decade.
CoreLogic analyst Andrew LePage said buyers delayed purchases due to stock market volatility and uncertainty caused by the government shutdown. The Bay Area had its lowest number of January home sales in 11 years, according to CoreLogic.
“Changes in home prices this year will hinge largely on the direction of mortgage rates,inventory, jobs and incomes,” LePage said.
But for families and individuals buying homes, the simmering market continued to bubble in the nine county area, with median prices for existing homes rising to $750,000 in January, a gain of $45,000 from the same time last year.
Median sale prices for resale homes rose 1.9% to $1.07% in Santa Clara, 5.6% to $565,000 in Contra Costa, 1% to $767,750 in Alameda, and 3.9% to $1.29 million in San Francisco. Prices dropped slightly in San Mateo County, where the typical home sold for $1.33 million.
The Bay Area market has seen year-over-year gains every month since April 2012. The median sale price peaked in May at $935,000.
But the high prices in Santa Clara County — home to tech giants and a booming economy — dropped home sales 18 percent from the previous year. Even bargain hunters stayed away from Contra Costa County, where transactions fell 17%.
Agents say the market for starter homes — in the Bay Area, around $1 million — remains hot. Buyers are being more discerning for properties selling around $2 million. But overall, agents report strong demand and short housing supply continues as the local economy surges.
“Is now a good time?” said Alameda agent Sophia Niu. “In the Bay Area, now is always a good time.”
The market looked to be slowing down in last quarter of 2018, Niu said, with uncertainty in the stock market and rising interest rates. But the first two months of 2019 have been busy for Niu and other East Bay agents, she said.
Nui placed a four bedroom, 1,800 square foot single-family home in Alameda on the market in January. Her clients expected a softer market than the year before. But after two open houses, the owners received multiple offers substantially above the $828,000 asking price, Niu said.
“All indications are that this year is going to be really strong,” she said.
But not all segments of the market are soaring, agents say. Properties above $2 million — common in Silicon Valley cities near employment centers — are sitting on the market longer.
Michael Tkachuk, 42, moved from Luxembourg in September with his wife and 11-year-old son. He braced for high prices in the Bay Area, but was willing to make the move for an executive tech job and a good schools.
“We knew that it was expensive,” said Tkachuk, an executive at a cybersecurity firm in Santa Clara. But by the end of July, he added, “the market kind of cooled down.”
The spotted an ideal house with five bedrooms and a big backyard on a quiet street in Los Gatos and bought below the $2.8 million asking price. The school is great and the neighborhood is filled with redwoods.
His agent, Ramesh Rao of Cupertino, said high-end sales have been slower, and customers have been more savvy about checking prices.
“It’s a very interesting market compared to last year,” said Rao, whose clients include many in the tech industry. Prospective buyers are still filling up open houses, but are less willing to make quick, all-cash offers.
“This time, people just look,” Rao said. “Buyers are very careful.”
Tribune Content Agency