A recent Wall Street Journal article claims the national housing market is “losing some of its ‘frenzy'” as more homes go up for sale and overpriced homes sit on the market rather than “getting snapped up immediately.”
I wondered if the same applied to the San Francisco Bay Area market, often an outlier in terms of real estate, and reached out to three experts for their opinions.
As are most things related to Bay Area housing, the answer is complicated.
Nationally, the market does appear to be slowing down, said Daryl Fairweather, the chief economist at housing site Redfin.
“We’re going from 100 mph to 80 mph,” Fairweather said. “What’s happening right now is a lot of buyers seem to be backing off the market because of how high housing prices have gotten. We’re seeing lower sales and a slight uptick in price drops.”
She noted that nationally, listings have “constricted the market,” but that’s not the case in San Francisco, which has seen a small exodus of individuals leaving the city for other Bay Area or California locales. As the logic goes, the more people who leave, the greater housing inventory available.
Nonetheless, San Francisco remains the most expensive market in the country.
“That’s why everyone’s leaving, because it’s so expensive,” Fairweather said. “But if you have the money (and many in the Bay Area do), the market isn’t really a problem for you.”
On a statistical level, the number of listings going into contract in the Bay Area’s largest markets — Santa Clara, Alameda, Contra Costa and San Francisco — is slightly down from peaks hit earlier in spring. The exception is Alameda County, which was slightly up from spring, according to data provided by Compass.
Nonetheless, it’s not unusual for these markets to begin to slow after springtime peaks, as the summer season is typically slower.
Likewise, new listing data in the four counties mentioned above did pick up significantly in June over May, according to Realtor.com. Alameda was up 5%, Contra Costa 16% and Santa Clara 5%. Only San Francisco was down, by 3%. Active listings on any given day of the month increased in June over May in all four counties. This number is affected by the number of new listings coming on the market and how fast buyers are purchasing them.
Alan Thuma, a longtime realtor with Vanguard Properties, says he’s seen steady inventory but also “steady absorption.” In other words, while there may be many active listings, those properties are getting snapped up — and often quickly. Part of the reason for increased inventory may be that lots of people are traveling this summer as COVID restrictions wane.
“But everything’s still steadily moving this summer,” he said, adding that he’s hosted an open house every weekend this season.
Thuma believes we’re “steadily marching to a fall market.” He expects lots of inventory in autumn, but also expects buyers may anticipate that and start looking now.
“There’s a natural thing where if you’re a first-time buyer, you’re being coached that the market starts ramping up after the Super Bowl,” he said, implying that many buyers will hold off their searches until then.
Generally, he sees any lulls in the market being attributed to the season in “foggy San Francisco,” when the market typically slows.
So is the Bay Area housing market cooling off? Probably not, no. And while inventory may increase in the fall, you can expect lots of competition, per usual.
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