EXCERPT: Bay Area home sales drooped in July to their lowest level for that month in six years. And guess what? As the housing supply continued to dry up, home prices kept climbing.
“These prices have been going up at a good clip for years now,” said Andrew LePage, research analyst for the CoreLogic real estate information service, which released its July report Wednesday. “They’re rising at a faster pace this year than last, and that reflects the very low inventory that exists in most markets, along with steady buyer demand.”
July home sales dipped 1.9 percent year-over-year across the region – and more steeply in some counties, including San Mateo (down 9.9 percent), Contra Costa (6.7 percent) and Alameda (6.1 percent).
Still, the affordability crunch is pushing many potential buyers out of the competition. Not only have prices climbed 10.1 percent year-over-year across the region, he said, but rising mortgage rates – up about half a point since last year – have boosted the typical monthly mortgage payment on a median-priced Bay Area home by more than 17 percent.
Kevin Kieffer, a Keller Williams agent in Walnut Creek, said, “Anything under a million that’s single-family is going to move within two weeks” in that city. He noted that the scant inventory “has amplified” the usual seasonal slowdown: “You’re going to see the headlines soon,” he predicted. “`Sales plunge in the Bay Area,’ and it’s not because there aren’t any buyers. It’s because there’s nothing to buy.”
Not everyone is complaining, though. Agent Alex Seroff, of DeLeon Realty in Palo Alto, said the market “keeps supporting or even exceeding expectations.” Seroff pointed to month-over-month August median price increases for homes around the Peninsula: up 3.2 percent to $2.69 million in Palo Alto; up 4.4 percent to just over $4 million in Los Altos Hills; up 3.5 percent to $1.37 million in Sunnyvale.
“Do you know who I feel very sorry for?”Alain Pinel agent Mark Wong asked. “It’s really hard for millennials to buy right now, even though they have very decent incomes. And that’s because of the down payment: 20 percent down on a $1 million house is $200,000, and who has that?