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Sales of homes under $500K plummet in Bay Area

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Half a million dollars isn’t what it used to be in the Bay Area, even as recently as 2015

A cable car passing by a yellow stick Victorian house. CO Leong

The real estate site Property Radar reported on Friday that home sales overall dropped 9.4 percent across the Bay Area in 2016, a decline of 6,466 receipts. In San Francisco alone the decline was 11.2 percent.

Most of the damage was to the affordable category of housing stock: Those priced $500,000 or less.

In 2015, 18,945 such homes sold. In 2016 it was only 14,276—a whopping 24.6 percent decline—just over 62,000 homes sold across the region in total.

By contrast, sales of homes that cost more than a million dollars rose, albeit only by 1.5 percent to 19,277. Numbers for all categories of homes cheaper than seven figures declined year over year.

Casting about for some non-Property Radar figures, California Resource, a title company, recorded 110 home sales in San Francisco in January of 2017.

Of these, only 10 cost half a million dollars or less, with just eight more selling between $500K and $700K.

For January of 2016 the same database records 22 San Francisco homes for $500K or less, with two more inching in above the line at $505K and $502K.

Van Stanic

Of course, a big part of the reason fewer cheap homes are selling is that fewer homes are priced comparatively cheaply to begin with.

Property Radar estimates that, even though sales are down and growth is happening only in the highest price bracket, median prices still went up over the year.

The site says that the average price for a single-family home in the region right now is $750,000, up from $730,000 a year ago. In San Francisco it’s $1.17 million, up from $1.15 million this time in 2016.

That’s higher but still largely in line with figures like the $1.15 million that Zillow estimates (up from $1.14 million a year ago) and Trulia’s $1.13 million, up from $1.05 million a year prior.

The most recent report from the Paragon real estate group estimates San Francisco’s median much higher at just over $1.3 million (up from $1.25 in 2016), but is closer to agreement with PR about the rest of the region, estimating a $765,000 median sale price today.

Of course, only magic can predict with complete accuracy whether apparent waning demand over the past 12 months will start to push prices down.

Growth did noticeably slow all last year, even as it stubbornly insisted on rising by inches and degrees.