Lack of affordability caused Bay Area home sales to plummet, says data firm

Data firm Core Logic released its latest Bay Area home sales report on Thursday, compiling the total number of home sales across the nine counties for August and finding a nearly double digit decline.

In San Francisco County, the number of homes sold dropped 5.9 percent compared to August 2017.

Although we should note that this is a difference of only 29 actual homes in all; the downward trend was consistent across almost the entire Bay Area:

• Alameda County: -12.6 percent (-234 homes)
• Contra Costa County: -12.6 percent (-222 homes)
• Santa Clara County: -9.3 percent (-173 homes)
• San Francisco County: -5.9 percent (-29 homes)
• San Mateo County: -10.4 percent (-70 homes)
• Solano County: -15.9 percent (-117 homes)
• Sonoma County: -3.5 percent (-24 homes)

Only Napa and Marin County saw a year over year increase in home sales, up 8.7 and 4.1 percent for August respectively in the CoreLogic numbers.

Overall sales across the Bay Area were down 9.9 percent, a difference of 845 homes compared to the same time last year.

Photo by Stanislav71

Over the same period, regional housing prices were up 12.2 percent compared to the previous year, with SF prices up 7.2 percent.

The biggest price spike was—unsurprisingly—Santa Clara County, a remarkable and wearying 19.8 percent, but SF still had the highest average home sale price at $1.31 million.

According to an emailed statement from the data firm’s analyst Andrew LePage, August marked the third monthly regional decline in a row.

LePage blames “the lack of affordable inventory on the market” for the slowdown, noting that unlike previous high markets during the 21st century “many struggling to buy today don’t have the option to stretch financially with [...] subprime and other risky financing that fueled a lot of homebuying late in the last cycle.” Yikes.

CoreLogic’s assessment is mostly similar to that made by the California Association of Realtors [CAR] earlier in September, although the specific figures vary.

CAR estimated a 10.3 percent year over year decline in sales for August in SF, even as prices jumped up 12.3 percent. CAR also puts SF’s median price in August at $1.65 million.

But note that CAR’s figures do not include condos, which probably accounts for most of the variation. Overall, both analyses agree that sales have contracted several months in a row.

• SF Bay Area Data Briefs [CoreLogic]
• SF Housing Price Drops [Curbed SF]