California homebuyers have had a reprieve from higher home prices in the last few months but that reprieve, at least in Bay Area home prices, is now past tense.
According to CoreLogic, median home sale prices shot up +4.9% y/y in January 2019. This price explosion sidelined many prospective buyers and overall sales volume in the Bay Area plummeted -12.8%. Sales volume in this 9-county region has not been at such a low level in a decade.
Median prices in existing Bay Area homes rose to $750,000, a gain of $45,000 from the same period last year. Take a look at the specifics:
- Santa Clara – +1.9% to $1.07M
- Contra Costa – +5.6% to $565,000
- Alameda – +1% to $767,750
- San Francisco – +3.9% to $1.29M
- San Mateo – dropped a bit to $1.29M
Home prices in the Bay Area have seen year over year gains every month since April 2012. Median sale prices peaked in May 2018 at $935,000.
Santa Clara’s high prices slashed the number of home sales. -18% from last year at this time and Contra Costa County’s sales fell -17%.
The starter-home market in the Bay Area ($1M) continues to sizzle due to a bubbling local economy, strong demand and short supply.
High-end sales, defined as $2M+, however, are slowing. According to agent Ramesh Rao of Cupertino, “Customers are more savvy about checking prices than they were last year. Prospective buyers still fill open houses but they are less willing to make quick, all cash offers. This time, people just look. Buyers are very careful.”