Bay Area home sales slowed slightly in July, with last year's record prices giving way to buyer caution amidst a volatile stock market and trade wars.
Sales of existing homes in the nine-county region fell 1.5% from last July, while the median sale price dropped 1.2% to $875,000, according to a monthly report from real estate data firm CoreLogic. New and existing home sales have dropped, year-over-year, for 12 straight months.
Still, the strong local economy and lower interest rates have kept Bay Area home prices among the highest in the nation. Entry-level homes — around $1 million in many Silicon Valley cities — continue to sell within a few weeks while more expensive properties linger on the market, agents say.
CoreLogic analyst Andrew LePage said that although sales have slowed, they've picked up from recent months due to the robust job market. "Obviously, there's still a severe affordability problem in the Bay Area," he said. "Only so many people can spend over $1 million."
The real estate market has cooled from a peak of $928,000 in May 2018.
Year-over-year prices dipped across the region in July, according to CoreLogic data from Bay Area counties: median sale prices for existing homes tumbled 3.9% to $1.23 million in Santa Clara, dropped 2.5% to $1.45 million in San Mateo, declined 1.3% to $630,000 in Contra Costa, and fell 1.6% to $900,000 in Alameda.
San Francisco sale prices picked up 6.9% to $1.55 million.
The region's home prices have plateaued in 2019, leaving some sellers disappointed with missing last year's peak. Buyers have been more cautious and clear-eyed this year, breaking the fever of multiple offers, no contingencies and all-cash deals sealed in two weeks.
Agents say rapid-fire offers have given way to more normal, if still accelerated, deal-making."Buyers have more choices," said Mark Wong, an agent with Compass. "They're not in a hurry."
Chris Isaacson, manager at Coldwell Banker in Woodside, said the San Mateo County market has some cities where demand and prices are hot, and other cities where the market is cooling down.
His agents see more demand for entry-level homes, while more expensive houses are sitting longer. In the past, he said, "people were looking at what sold recently and tacking on 10%. That doesn't work any more."
Ramesh Rao, an agent with Coldwell Banker in Cupertino, said homes listed for $3 million a year ago now are priced around $2.7 million, drawing interest with a lower price, he said.
If a single-family home is move-in ready, with upscale features and in a good neighborhood and school district, a seller likely will get two or three solid offers, Rao said.
Rao added that political and economic uncertainty, including a volatile stock market, changing immigration policy and trade wars, have weighed on foreign-born buyers working in tech. "They don't want to pull the trigger," Rao said. "All of these concerns are throwing a monkey wrench."
East Bay buyers have stayed on the sidelines, with Alameda and Contra Costa sales dropping 6.8% and 11.6%, respectively. But agent Will Doerlich of Realty One in San Ramon said certain markets, such as Dublin condos, have been strong. "There's more inventory and rates are still insanely low."
Nancie Allen of Master Key in Fremont said homes in the Tri-Valley have been sitting longer, but in desirable neighborhoods a good home "can still sell in a week or two."
Sellers have found a more sluggish market but still are realizing strong gains on their investments.
Bharat and Barti Kamdar had sticker shock moving from Minneapolis to San Jose in 1978. They spent $105,000 to buy and fix up a four-bedroom in Blossom Valley. Friends from Minnesota wondered how they would afford food, Barti Kamdar remembered.
The Kamdars, retirees from the tech industry, decided to sell this year after their long-time tenants moved. The house fetched just under $1 million in July. "We thought we would get more," Barti said. Still, the couple exchanged the profits for three more investment properties near Sacramento.
Len Cook, a retired professor with a doctorate in music from Stanford, bought five townhomes in the late 1970s and early 80s as investment properties. The homes provided a steady income, easily recouping the initial investments of between $50,000 to $95,000, he said.
Cook, 88, became a widower a year ago. He and his wife had agreed to sell three properties when one of them died.
He put three units in East San Jose up for sale this year. Two sold quickly, but a third lingered on the market until this month, as buyers seemed to throw the brakes on the market, he said. The units sold for between $550,000 and $700,000, he said.
"I'm glad that we're selling now," Cook said. "We're getting pretty near top dollar."
