SF home prices drop, still unaffordable for all

On Thursday, Orange County-based data firm Core Logic reported that the median home price in San Francisco is down year over year, dropping four percent in May.

Earlier this year, the firm recorded the first drop in the Bay Area’s median price year over year since 2012, diminishing an almost comically small yet still significant 0.1 percent for March. However, the price of a home in SF rose more than five percent within that period.

Now the firm’s most recent San Francisco Bay Area home sales report once again found prices down across the Bay Area, showing a decline of 1.7 percent across in all nine counties, including a four percent depreciation in SF.

Across 637 homes, the SF price (as calculated via MLS sales) declined from $1.38 million this time last year down to $1.32 million now.

Other resources have also shown small but significant dips in SF’s median year over year, but this is the first time Core Logic’s data has agreed. Last time the firm recorded a year over year decline in SF was in April 2017—at the time, a much larger decline of 7.3 percent.

The California Association of Realtors [CAR] released its May data this month. The firm not only corroborates Core Logic’s conclusions but builds on them, showing even bigger price drops at 4.8 percent in SF.

According to CAR, the May price in SF dropped from roughly $1.69 million in 2018 to $1.62 million this year. [Correction: Nope, that’s the other way around: CAR’s SF median increased 4.8 percent year over year. Whereas Core Logic looks at all home sales, CAR only compiles the price of single family homes, so their conclusions diverge.]

The year-over-year drop from CAR for the entire Bay Area was 5.7 percent, ebbing below $1 million down to $990,000.

The problem with these monthly figures is the uncertainty as to which ones are blips and which ones might be part of or the beginning of real trends.

For example, the 7.3 percent SF price drop in April 2017 was big but didn’t last, with median rices soaring for the rest of the that year.

“San Francisco is a relatively small market compared with some of the larger counties, and the median sale price tends to be a bit more volatile,” a Core Logic spokesperson tells Curbed SF.

LA-based Beacon Economics’ regional outlook report for California homes, released this week, compared performances across the entire quarter. Their conclusion: Yes, prices are down in the long term as well:

From the first quarter of 2018 to the first quarter of 2019, the median price of an existing single-family home in San Francisco decreased by 1.1 percent, or $16,200, to reach $1.43 million. While not a huge dip, it is indicative of greater weakness in price appreciation

[...] Given the Bay Area’s healthy economy, it’s possible that even with all of the wealth being created in the region, the price points for homes have reached a level that households simply cannot afford.

Beacon notes that the number of homes sold also dropped nearly six percent in SF, along with much larger declines of 11.8 percent in the East Bay and 18.2 percent in the South Bay.

Just as one month does not itself a trend make, neither does one quarter. Still, there have been few signs of housing appreciation in 2019 so far—and none of these new figures are rocking the boat.