Times are a-changin’ in the West Coast housing markets. During the last 5 years, those markets, Denver, Seattle, Los Angeles, San Francisco and San Jose, have been leading the way to the hottest housing markets in the country.
Now, new data from Realtor.com suggests that these hot markets have pushed beyond the abilities of consumers to pay…homes are languishing on the market for longer, inventory that was next to nonexistent is beginning to spike and there are increasing numbers of price concessions.
In fact, listings prices declined in November in parts of California, Colorado, Washington and Oregon. Take a look at data showing median listing prices y/y in November 2018:
Denver-Aurora-Lakewood – -11.97%
Salinas – -7.3%
Boulder – -6.2 %
Santa Rosa – -6.17%
San Jose-Sunnyvale-Santa Clara – 3.6%
Oxnard-Thousand Oaks-Ventura – 3.34%
Colorado Springs – -2.12%
San Luis Obispo-Paso Robles -1.89%
Billings MT – -1.62%
Santa Maria-Santa Barbara – -1.42%
Reno – -1.41%
Listings prices also dropped -0.61% in the all-important San Francisco-Oakland-Hayward markets in November.
Usually, according to Realtor.com, when listings prices begin to decrease, sales prices follow. These dips, if nothing less, mirror realtors’ beliefs that homes will begin to sell for less than they did one year ago.
The number of active listings (number of homes for sale) is another key data point. When that number goes up, buyers have more choices, sellers have fewer prospects and home prices often drop.
Realtor.com found that San Jose, a market that had one of the highest home price appreciation rates in the country since the financial crisis, had the highest jump in active listings (an eye-popping +160.3%) in November 2018. Go back to the above areas that experienced decreasing listings prices in November… San Jose showed a -3.67% drop in its median listings price coupling this whopping inventory increase.
Also notable inventory increases happened in Denver with an increase of +122.9% in active listings, Santa Rosa experienced a +64.1% increase in active listings and San Francisco had a +58.3% jump in active listings.
The only sales price drop data currently available so far came from Compass data mentioned in the business blog Wolf Street…existing condominium sales prices in San Francisco dropped -2.5% in November.
Perhaps we’ll see more such reports concerning sales price drops in the future?
