Bay Area home sales: ‘Flat is the new black’

January home sales in the Bay Area took a plunge from December — a 31.8 percent drop, making January the weakest sales month in nearly a decade.

“We expect home sales to be low this time of year reflecting a seasonal sales lull around the holidays,” said Madeline Schnapp, director of economic research for PropertyRadar, the real estate information service that crunched the numbers. “But the rise in rates late last year likely helped push sales to the lowest levels since February 2008.”

For the region as a whole, January sales of single-family homes and condos dropped 4.6 percent from a year earlier, according to PropertyRadar’s new report. In fact, year-over-year sales fell in each of the six counties measured: by 0.4 percent in Alameda County; by 1.4 percent in Contra Costa County; by 6.2 percent in Marin county; by 6.4 percent in San Mateo County; by 7.9 percent in Santa Clara County; and by a whopping 14.0 percent in San Francisco County.

The report buttressed other recent analyses pointing to a similar confluence of factors. Rising mortgage rates combined with a tight housing supply and chronically high median prices have tamped down home sales across the region, with sales showing an exceptional tail-off in the most expensive counties. Schnapp pointed out that San Francisco, San Mateo and Marin counties all have median home prices exceeding $1 million.

Averaging across the year, PropertyShark said 2016 Bay Area sales fell 9.4 percent from 2015. Annual sales fell in all six counties, ranging from a 6.5 percent drop in San Mateo County to a 12.6 percent fall in Marin County.

Read the full report here.

The January median price for a single family home was $750,000, down 5.1 percent from $790,000 in December 2016, but up 2.7 percent year-over-year from $730,000. Median prices were up year-over-year in all six counties — including by 2.8 percent in Santa Clara County, and, most dramatically, by 27.9 percent in Marin County.

“A low-priced home in much of the Bay Area is now considered to be $500,000 or less,” Schnapp said. “Sales of those properties fell 24.6 percent as prices march steadily higher. Surprisingly, the only price category that saw an increase in sales were properties that sold for more than $1 million. Those types of numbers are not indicative of a healthy or sustainable housing market given current income levels and wage trends.”

She finished with this prediction: “Economic growth in the first half of 2017 is expected to remain tepid with the balance of 2017 uncertain. Until the tax and trade policies of the new (Trump) administration become clearer, we believe our ‘Flat is the New Black’ market perspective will remain intact.”

Photo: Home for sale in Pleasanton. (Courtesy of Redfin)

 

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