Fewer houses for sale, less buying and another monthly dip in prices could be bringing a modest correction to the sky-high Bay Area housing market.
The median price for a single family home in the nine-county region fell nearly 3 percent to $805,600 from the previous October, according to real estate data and listing firm Zillow. The median price of a home in Santa Clara County — home to Stanford University and headquarters of tech giants Apple, Google, Hewlett Packard and others — continued a 10-month retreat, falling 5.9 percent to $1.08 million.
Zillow senior economist Cheryl Young said some parts of the Bay Area have hit an “affordability ceiling,” and that the declining prices could be seen as a small market correction after years of soaring values.
“We’re starting to see things slow down,” Young said, “but that doesn’t mean it’s less expensive in some of these areas.”
The trend lines for the region’s home sales still show strong demand and limited supply, benefiting long-term owners and sending entry-level prices higher in some communities. But year-over-year median single family home prices in the Bay Area have been sliding since June, according to Zillow data.
Median prices edged up 1.4 percent in the more affordable suburbs of Contra Costa County to $650,800 and jumped 3.3 percent in the region’s most expensive city, San Francisco, to $1.4 million.
But prices dipped elsewhere: San Mateo dropped 1.4 percent to $1.31 million; and Alameda slumped 1.2 percent to $855,200, according to Zillow.
Price cuts have become more common in some cities. Zillow data shows that in San Jose and San Francisco, more sellers were willing to cut their prices this year than last.
Young said the retreat in Santa Clara County prices suggested high listings have been unsustainable over the long-term, with affordability a big concern for buyers.
“There’s not a lot of supply out there,” Young said.
Homes on the market are still selling quickly. Homes typically sold at the same pace in October as they did the year before. Houses listed in Alameda and San Francisco took 15 days to sell, and took 12 days in San Mateo County, the same as the year before, according to data from the California Association of Realtors (CAR).
In Santa Clara County, homes took an average of 18 days to sell in October — four days longer than the previous year, according to CAR. Contra Costa County homes went from an average of 16 to 17 days on the market during the same period.
Local agents say the market has settled into a less-frenzied, more-predictable pace. Buyers are more cautious.
Nancie Allen, an agent with MasterKey in Fremont, said tight inventory is limiting buyer choices, and homes priced competitively move quickly. Still, fewer home sales and bidding wars have calmed buyers. “It feels like everyone is taking a breath,” Allen said.
Compass agent Mark Wong of Saratoga said Santa Clara County homes near tech companies remain popular with young, professional families. For example, a home in Saratoga recently listed for $2.2 million received 17 offers, and sold in about a week for $2.6 million, he said.
But other properties have been selling closer to listing prices. For homes in good school districts “the market is still pretty hot,” Wong said. “There’s still a lot of buyers who want to buy.”
Wendy and Aidan Leu are information tech workers who bought a four-bedroom home in Sunnyvale in October. They worked their way up the property ladder, first buying a condo in 2006 and trading up for a townhome in 2014.
Wendy Leu, 40, a Bay Area native, said the family wanted more room for their children, ages 8 and 10. They also wanted to ensure the right school district for their kids — Cupertino Union.
The couple had a key ally — Leu’s parents in Cupertino, who let the family stay with them for four months while they sold their townhome and looked for a single family house.
The townhome sold for about 50 percent more than they paid for it, and that helped them go on a home search with a budget of around $2 million, Wendy Leu said. The family spent two full days looking at about a dozen homes in the Cupertino Union School District.
The search was easier than they had five years ago, Leu said, when every home sold “super quick, super high.”
They landed on a remodeled four-bedroom, three-bathroom home just a few miles from her parents. At $1.83 million, they felt like they got a good deal. “I fell in love with this house,” she said.
