Orange County-based data firm Core Logic released more grim and/or encouraging news (depending on your point of view) about the Bay Area housing market last week, reporting that sales dropped across all Bay Area counties year over year and that “sales have fallen on a year-over-year basis the past six consecutive months.”
Core Logic has reported since summer that sales have stalled across the region. As always when it comes to statistics, it’s best to interpret the numbers conservatively; even a real decline can often turn out to be a temporary dip or fluctuation, and even the most aggressive market will eventually hit a lull sooner or later and will often rebound.
However, the longer the trend continues, the more likely it is to represent a significant downward trend. Which might be good news for anyone suffocating from the region’s towering cost of living, but could also have troubling ramifications for the local economy.
Here’s how Core Logic breaks down November:
- The number of homes sold in the Bay Area declined more than 15 percent from last year: The total across nine counties was 6,147 houses and condos. This time last year it was 7,253, a drop of 15.2 percent. “Total November 2018 home sales in the San Francisco Bay Area were the lowest for that month since November 2014,” according to an emailed statement from the data firm.
- A trend of declining sales dominated the last half of 2018: According to previous monthly reports, “[S]ales have fallen on a year-over-year basis the past six consecutive months,” starting with an 8.3 percent year over year decline in June and peaking with a 18.8 percent crash in September.
- The effects spread across all types of homes: According to Core Logic analyst Andrew LePage, “November’s slowdown affected all major price categories, including a nearly 10 percent annual drop in $1 million-plus sales.” LePage adds, “Market corrections can spook high-end buyers.” Of course, in San Francisco most houses (but not condos) fall within the million-dollar plus range.
- Nevertheless, prices are still up: Core Logic estimates the median price of a Bay Area home in November at $815,000. While that’s down from recent months—October was $847,000 and back in the summer when the declines began it hit $875,000—it’s still well up from November 2017’s average of $785,000.
- Despite regional declines San Francisco itself came out relatively strong: In the city, sales were down six percent year over year—significant, but a small drop (the second lowest regionally) compared to most of the rest of the neighboring counties. Marin County fell hardest, down 32 percent, with San Mateo County declining 20.8 percent. Napa County had the smallest decline with 5.8 percent, although it also had the smallest sample size, selling just 114 homes compared to SF’s 498 and Santa Clara County’s regional high of 1,364 (down 11.9 percent from 1,548 last year).
The California Association of Realtors [CAR] reported a similar trend in its own November 2018 figures, with SF coming out notably worse than in the Core Logic numbers.
According to CAR, sales in SF dropped 12.2 percent compared to 2017, with the median price of a house in SF actually down year over year, from $1.5 million last year to more than $1.44 million now.
The discrepancy between the two source’s numbers are most likely due to the fact that CAR only compiles single-family home sales while Core Logic includes condo sales in its figures.
Both agencies agree that sales have declined consistently for months.