The seven-year fever driving up Bay Area home prices may finally be breaking.
Far fewer homes sold in December than the previous year, and median sale prices barely budged in the nine-county region, in a report released today by real estate data firm CoreLogic.
Cautious buyers in the country's most expensive housing market waited for better deals or refused to sign budget-busting mortgages, agents say. The number of home sales plunged 20% from the previous December, and marked the slowest holiday month in 11 years, according to CoreLogic. And after months of price gains exceeding 10%, the median re-sale home price in the Bay Area grew just 1.3%.
"Last month, the San Francisco Bay Area logged one of its sharpest declines in home sales since the end of the last housing downturn," said CoreLogic analyst Andrew LePage. "The decline reflects a variety of factors. Mortgage rates hit a seven-year high in November, affecting December closings, and stock market volatility created an additional headwind in high-end markets."
Santa Clara County, home to Apple, Google and other hugely profitable and expanding tech giants, saw home sale prices plummet 10% in December. In 2018, homes prices in the county rose by double digits every month through the spring and summer.
The median resale price for a home in Santa Clara County — still one of the most expensive spots in the country — dropped to $1.06 million.
Year-over-year prices fell in three other Bay Area counties: prices dropped 2.5% to $1.33 million in San Mateo, 5.2% to $632,500 in Napa and 6.6% to $590,000 in Sonoma.
Other counties notched gains: Contra Costa rose 2.8% to $557,000 and San Francisco increased 11.5% to $1.45 million. Alameda County home sales stayed flat at $800,000, according to monthly data.
Overall, the median sale prices for an existing home in the Bay Area sold in December was $775,000, down from a peak of $935,000 in May. Every county saw fewer home sales. Bay Area home prices have risen every month, year-over-year, since April 2012.
Agents say buyers are unable to stomach higher prices and are waiting for deals. Sellers are receiving fewer offers on homes, and house hunters who haven't given up hope are finding some slight relief.
"My phone's not ringing like it did six months ago," said agent Matt Rubenstein with Compass Real Estate in Contra Coast County. The dip in interest is normal around the holiday season, he added, and sales remained strong for good neighborhoods.
Santa Clara County agents report homes staying on the market longer and sellers making more concessions. The close proximity to tech companies and good schools still makes the area desirable.
Myron Von Raesfeld, CEO of Windermere Silicon Valley, noticed less activity in November and December. "The market is holding its own right now," he said. "The general trend is slowly down."
Sandy Jamison of Tuscana Properties in San Jose said sellers are looking for peak prices, while buyers are looking for discounts. She has seen deals collapse over $10,000 price differences.
"It's been slow," Jamison said. "I have a lot of sellers waiting."
