Home sales in the San Francisco Bay Area were down -12.8% from last month, according to CoreLogic. This drop in home sales was not as steep a slide as in previous recent months but the sales volume is still well below the Bay Area’s historic average for February.
“For the third month in a row, Bay Area home sales were at an eleven-year low for the month,” said Andrew LePage, an analyst with CoreLogic. “However, the year-over-year decline in sales has ratcheted down the past two months from a nearly -22% annual drop last December 2018 to a decline of just under -13% last month.”
LePage points to high home prices as the chief culprit here. The median home price in the Bay Area is now $770,000, +5.5% higher than last month’s median price. Only 24% of all the homes sold in the Bay Area cost under $550,000.
Some experts see what’s happening in San Francisco Bay Area home sales as an extreme version of what’s happening across the country. As home prices continue to rise everywhere, fewer owner-occupied buyers can afford to buy those homes and more absentee/investor buyers are purchasing them. Last month, 17.6% buyers in the Bay Area were investors and/or second homeowners. This month, 19.5% buyers in the Bay Area were investors/second homebuyers.
Some industry experts are hoping that falling mortgage interest rates will help average income and first time buyers. “Lower interest rates combined with more listings compared with the number of listings early last year and an improving stock market in early 2019…(am) put some would-be buyers back into home shopping mode,” said LePage.