Bay Area home prices continue to slip
Bay Area home prices continued to decline in September as the regional market slows from the rapid pace set over the past seven years.
The median sales price in September for an existing home in the Bay Area dropped 4.7%, to $810,000, despite low interest rates, a strong stock market and booming regional economy, according to real estate data firms CoreLogic and DQNews.
Bay Area home prices still are among the highest in the nation.
"It's still a good, strong seller's market," said Jeff LaMont, a Coldwell Banker agent in San Mateo. "It's still a challenge for buyers."
The Bay Area residential market has seen year-over-year sale prices drop in several months this year. That follows a record run of rising home prices that began in April 2012 and ended in March.
Adding to the housing pressure is the region's robust economy, which added 5,100 more jobs in August, according to the state's Employment Development Department.
Existing home sales increased 3.5%, led by busy markets in outlying counties: Sonoma (up 29%), Napa (up 14%), and Solano (up 18%). Sales remained relatively flat in Alameda, Contra Costa, Santa Clara and San Mateo counties.
Year-over-year median prices grew 3.9% to $632,500 in Contra Costa County, increased 4.2% in San Francisco to $1.48 million, and inched up less than one percent to $869,500 in Alameda County. Prices dropped 3.7% to $1.16 million in Santa Clara County and fell 2.7% to $1.45 million in San Mateo County, according to DQNews.
Agents say buyers are willing to wait for the right deal, avoiding bidding wars and hesitating to push far past their budgets. Homes in move-in condition, near transit or with a short commute still top the list of desirable features.
Matt Rubenstein, a Compass agent in Walnut Creek, said starter homes between $700,000 and $900,000 have been attractive, especially if they're in good shape and within a strong school district. "If they show really well, there's always going to be interest," he said.
Rubenstein has noticed some nervousness among buyers — the market has stayed strong for nearly eight years, and some are concerned about an inevitable drop. He said he tells buyers to plan on staying in the house for at least seven years and trust the strong, regional economy.
Ramesh Rao, a Coldwell Banker agent in Cupertino, said pricing at or below comparable homes in a neighborhood is key to attracting buyers. The market isn't as hot as it was last year, he said, but plenty of younger tech professionals still want to buy.
Larger trends in the housing market don't apply to Silicon Valley. "Listen to what's happening locally," Rao said, "not nationally."
As bidding wars have largely receded, house hunters can afford to shop around a bit longer.
Bay Area natives Tiphanie and Paul Cimoli have bought and sold houses for 30 years. The couple lives in a single family home in South San Jose and wanted to buy an investment property to rent out to their oldest son and a roommate.
The Cimolis blitzed the market, touring 75 homes in three months. They bought a San Jose townhome for about $780,000 after it had been marked down twice and the seller was motivated to get rid of the unit. Still, the couple found the diligent search a bit more demanding than other, earlier purchases.
"We actually thought that there were a lot of choices out there," Tiphanie said. "We found that the really good ones went fast."