Bay Area Housing Market Says "Cool It!"
Anywhere else, this might be bad news. Here, it's a welcome relief from a nerve-wracking multimonth seller's market on steroids.
The San Francisco Bay Area has a long history of being crazy expensive. Heck, guards at Alcatraz, which closed in the 1930s, opted to live on residences on the Rock because the rent was cheaper than in the city. Not one but three cities from this area — San Francisco, Oakland and San Jose — are listed in the Top 10 Most Expensive Cities report from Kiplinger.
Then 2013 happened. Hopeful homebuyers waiting until after the Super Bowl to start placing bids were crushed when, out of the blue, a homebuying frenzy seized the entire region like a plague. There were one-day flash sales: Open houses began resembling roller-derby games; bidding wars led to failed offers $100K over asking. Whispered stories made the rounds of banks refusing to cover loans on houses they deemed overvalued. The rental market went up precipitously, and middle-income families found themselves in increasingly dire straits as cash buyers snapped up every last housing crumb.
It has been brutal.
So while around the country, the real-estate obsessed are anxiously hoping for the indexes to rise, here in the Bay Area, a real-estate slowdown is a welcome sign of stability, a gentle dip rather than a severe correction. The median home price in San Francisco dropped 3.9 percent in August, after 6 months of steady increases, to $588K in the greater Bay Area. Single-family home sales are down 8% from July and 3.2% from a year ago.
Why? Well, school is back in — that's a
traditional market coolant. But in many areas, the inventory has increased. You're
even seeing price reductions.