Orange County-based data firm Core Logic summarized housing sales (for both single-family homes and condos) across the Bay Area in June this week and noticed that two counties—Sonoma and Santa Clara—have seen median sale prices decline year over year nearly every month since the start of 2019.
Much of the June data followed other broad trends for the year, namely that the price of housing dropped across the Bay Area as a whole (down 2.3 percent year over year to a median price of $855,000), but rose in San Francisco (up 3.6 percent to more than $1.39 million).
The number of homes sold in SF and the larger region tumbled compared to last year, down 21.1 percent (to 482 sales) in the city and 12.6 percent (to 7,357) across all nine counties, which is also in line with what’s happened most of 2019.
Core Logic economist Andrew LePage points out one trend that’s been overlooked until now: “Santa Clara and Sonoma [counties] logged annual declines in their overall median sale prices in June. In both cases, this was the fifth consecutive month with a year-over-year decline,”
Santa Clara County dropped 1.6 percent compared to June of 2018, down to $1.13 million.
The slide started in February, when the year-over-year median declined 7.4 percent, from $1.3 million to roughly $1 million. March’s decline was 10 percent, April’s was 3.1 percent, and May’s six percent.
The drops in Sonoma County have been less severe, sliding 3.2 percent compared to June of last year, from a median of $620,000 to $600,000. February’s decline was 4.4 percent, March was at 2.5 percent, April at 4.9 percent, and the slide in May was 2.5 percent.
Note that in Core Logic’s numbers the price in San Francisco increased or stayed the same year over year for all of those months except May.
The general slippage around SF has some market watchers wondering whether the housing party is over in the Bay Area. Wolf Street declared earlier this month that “Housing Bubble 2 has lots its mojo” after the California Association of Realtors recorded similar declines (including Santa Clara and Sonoma) for June.
But Compass economist Patrick Carlisle cautioned in a report summarizing 30-years of Bay Area housing booms and busts that “it is vital to understand how extremely difficult it is to predict when different parts of a cycle will begin or end.”
He cites a point in 2015 when “financial markets entered into a period of volatility, IPO activity stopped in its tracks, and high-tech hiring slowed,” leading to predictions of sudden declines in housing in the near future.
Instead, according to Carlisle, median house prices in San Francisco “have gone up over 20 percent” since 2015.