San Francisco Bay Area Real Estate Market Survey

 

 

 

Note that it is not unusual for median home sales prices to peak for the calendar year in spring (Q2). This is due not only to heightened buyer demand, but also to the extreme seasonality of the luxury home market - more luxury home sales (as a percentage of total sales) pull overall median sales prices up.

 

 

Markets in late 2017 through spring 2018 were very hot virtually throughout the Bay Area (as illustrated by the high appreciation rates represented by the dark blue columns below). In the second half of 2018, markets cooled considerably - besides issues of simple affordability, financial markets saw nerve-wracking volatility and large declines, and interest rates jumped dramatically. Then, in 2019, stock markets recovered, interest rates plunged, and real estate markets strengthened once more, though not to the levels of early 2018.

Generally speaking, except for those markets most affected by the slew of local high-tech IPOs - San Francisco and the greater Oakland region - most markets saw either no significant year-over-year appreciation or year-over-year declines in median house sales prices from their Q2 2018 peaks (gray columns). Santa Cruz County bucked this trend. The next major indicator of market direction will come from autumn selling season data.

 

 

 

 

When calculating these rates, results vary enormously depending on the year the calculation begins with. These start with the year 2000. If we started with 1995 - prices rapidly appreciated between 1995 and 2000 - the rates would jump; if we began with 2007 - the height of the subprime boom - then the rates would drop. The same issue exists with calculating stock market returns.

 

These approximate calculations are based simply on the all-cash median house purchase price in 2000 and median sales price in mid-2019, without adjusting for closing costs (or the effect on "return on cash investment" of not paying all cash upon purchase).

 

 

 

High-end home markets in outlying counties - the four with the lowest percentages in the chart below - have softened considerably, and would typically be considered to be in buyer's market territory. This doesn't mean that some luxury homes there don't sell quickly at excellent prices. It does mean that many luxury homes don't sell without price reductions, or don't sell at all.

 

 

The following 2 charts illustrate the respective sizes of county markets, the long-term trend in sales volumes, and the dramatic effect seasonality has on the ebbs and flows of activity.

 

 

Below are a number of standard statistics broken out by county or region to illustrate respective market conditions.

 

Looking just at 2019 YTD stats, the greater Oakland-Berkeley market has been the strongest in the Bay Area, which is why we have broken it out. If its effects on overall Alameda County stats were deleted, Alameda figures would adjust to somewhat cooler-market readings.

 

 

In most counties, the percentage of active listings undergoing price reductions in a given month has increased well above the rates of the first half of 2018. San Francisco percentages over the past 4 months are an exception to this trend: The roll-out of big local IPOs this past spring are probably the main factor.