For a few months, it seemed as if the speeding Bay Area housing market was ready to slow down.
Agents reported sluggish sales and buyers having a few more options.
But any buyer relief was short-lived — median sale prices for existing Bay Area homes surged 4.9 percent year over year in January, according to a report released Thursday from real estate data firm CoreLogic. The region’s highest-in-the-nation home prices sent many shoppers to the sidelines, and overall sales dropped 12.8 percent, hitting lows not seen in more than 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.
“Sales started to sputter late last year,” LePage said. “There’s plenty of people just priced out.”
Future changes in the market, he added, will hinge on mortgage rates, housing inventory and the strength of the economy.
In December, median sale prices inched up just 1.3 percent, hinting at a possible end to a record-breaking streak of higher prices that started in April 2012. Four counties actually saw price drops.
But families and individuals buying homes in January found the simmering market still bubbling throughout the nine-county area, with median prices for existing homes rising to $750,000 in January, a gain of $35,000 from the same time last year.
Median sale prices rose 1.9 percent to $1.07 million in Santa Clara, 5.6 percent to $565,000 in Contra Costa, 1 percent to $767,750 in Alameda, and 3.9 percent to $1.3 million in San Francisco. Prices dropped slightly in San Mateo County, where the typical home sold for $1.33 million.
The median sale price for existing homes peaked in May at $935,000.
But the high prices in Santa Clara County — home to tech giants and a booming economy — contributed to home sales falling 18 percent from the previous year. Bargain hunters even stayed away from more affordable Contra Costa County, where transactions dropped 17 percent.
Agents say the market for starter homes — in the Bay Area, around $1 million — remains hot. Buyers are more discerning for properties selling around $2 million.
The sales slowdown was more pronounced for high-end homes on the Peninsula, according to CoreLogic. The number of homes that sold for more than $2 million dropped, year-over-year, in December and January by 36 percent in San Mateo County and 26 percent in Santa Clara County.
But overall, agents report strong demand and short housing supply 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 the last quarter of 2018, Niu said. 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.
Nancie Allen, president of Bay East Association of Realtors, said the pace of sales has slowed. “Buyers are feeling much more patient,” she said. If a home looks like a good deal, she added, “I’m still seeing multiple offers and offers way above asking.”
Real estate agent Ramesh Rao, of Cupertino, said high-end sales have been slower, and customers have been more savvy about checking prices.
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 enticing tech job and 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.”
They 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.
Rao, Tkachuk’s agent, said his tech industry clients come into the market with more data and sophistication.
“It’s a very interesting market compared to last year,” said Rao. Prospective buyers still are 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.”
