September’s median single-family home price in
the nine-county Bay Area was $852,230, up 11.5 percent year over year
Bay Area home sales dropped by 14.2 percent from
August and 4.2 percent year over year, and future declines are expected for
areas affected by wildfires.
The months’ supply of inventory fell both
statewide and in the Bay Area from September of last year.
Despite fewer properties on the market than there were at
the same time last year, California home sales increased modestly in September.
Here in the Bay Area, which has the state’s most severe inventory drought, the
opposite held true, as sales dropped throughout much of the region.
The latest monthly home sales and price report from the
California Association of Realtors says that there were 436,920 existing
single-family home sales on a seasonally adjusted annualized rate in September,
a gain of 2.2 percent from August and 1.7 percent higher year over year. In the
nine-county Bay Area, sales declined by 14.2 percent from the previous month
and 4.2 percent from September of last year.
In a statement accompanying the report, CAR President Geoff
McIntosh said that he expects sales to further recede this year in areas
affected by wildfires, including Napa and Sonoma counties. In September, home
sales were down on an annual basis by 12.4 percent in Napa County and 0.5
percent in Sonoma County.
California’s median single-family home price ended September
at $555,410, down slightly from August but up 7.5 percent year over year. In
the nine-county Bay Area, the median sales price was $852,230, an annual gain
of 11.7 percent.
Eight of nine local counties saw the median sales price
increase from September 2016, ranging from 18.0 percent in Santa Clara County
to 5.1 percent in Sonoma County. Napa was the only Bay Area county where the
median sales price decreased from the previous year, falling by 2.7 percent.
CAR Senior Vice President and Chief Economist Leslie
Appleton-Young pointed to a familiar culprit — not enough homes on the market
to meet demand — as the primary factor pushing prices higher. All but 10 of the
51 counties for which CAR tracks data saw annual home price increases in
“The statewide median price rose at the fastest annual pace
since February 2017 as the housing supply shortage continued to dictate the
market, taking a toll on home sales and affordability,” Appleton-Young said.
“The tight inventory situation is particularly acute in the Bay Area region,
which saw double-digit price increases in Alameda, Contra Costa, San Francisco,
and Santa Clara counties, while sales fell markedly from the previous year in
six of the nine Bay Area counties.”
California had a 3.2-month supply of homes for sale in
September, a modest improvement from August but down from last September.
Active listings, which have been falling by more than 10 percent every month so
far this year, continued their slide, declining by 11.2 percent.
A similar trend played out in the Bay Area, with the months’
supply of inventory expanding from August to 2.2 but down from the 2.6-month
supply recorded in September of last year. Four Bay Area counties have the
lowest inventory levels in the state: Santa Clara (1.4), San Mateo (1.9),
Alameda (2.1), and Contra Costa (2.2).
Written by Pacific Union
Golden State homes should appreciate at almost double the national rate by next spring, though price growth and increasing rental costs do not bode well for affordability.
CoreLogic’s latest Home Price Insights report says that U.S. home prices rose by 6.6 percent from May 2016 to May 2017. California home prices grew by 5.8 percent in that time period, while the San Francisco core-based statistical area saw 4.6 percent annual appreciation.
Single-family rent inflation grew by 3.1 percent year over year in May, a reflection of constrained housing inventory and yet another obstacle for those hoping to enter the housing market while mortgage rates remain historically low.
“For renters and potential first-time homebuyers, it is not such a pretty picture,” CoreLogic President and CEO Frank Martell said. “With price appreciation and rental inflation outstripping income growth, affordability is destined to become a bigger issue in most markets.”
Housing affordability is already a national problem, dropping to a near nine-year low in the second quarter, according to a recent report from ATTOM Data Solutions. That analysis said that home prices grew faster than wages on an annual basis in 87 percent of U.S. housing markets, including most of the Bay Area.
California’s affordability problem is unlikely to improve in the coming year if CoreLogic’s forecast is accurate. The HPI calls for 9.7 percent home price appreciation through May 2018, compared with 5.3 percent appreciation nationwide.
Although the Bay Area has some of the nation’s priciest homes, most parts of the region are still considered to be valued normally. CoreLogic says that the San Francisco, Oakland, San Jose, Napa, and Vallejo CBSAs had normal home values as of May. San Rafael is currently considered undervalued, while Santa Rosa is overvalued.
Looking ahead, CoreLogic expects that homes in the San Jose, Oakland, Napa, Vallejo, and Santa Rosa CBSAs will be overvalued by May 2022. Home values in San Francisco and San Rafael are projected to remain normal over the next five years.
Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious.
SAN JOSE SEES NUMBER OF YOUNGER HOMEOWNERS PLUNGEThe number of young U.S. homeowners has been shrinking since the beginning of the century, particularly in Silicon Valley, one of the nation’s most expensive housing marketa.
A study by apartment-search website ABODO says that the homeownership rate for Americans under the age of 35 — the largest generation of adults — dropped to 33 percent as of 2015, a decline of 5 percent from 2001. In the San Jose metro area, the homeownership rate for young adults plummeted by 34.8 percent in that time period, the largest such drop in the country.
Five California cities rank in the bottom 10 for the lowest rates of millennial homeownership. The Los Angeles metro area has the fewest homeowners under 35 in the country, at 17.8 percent. San Jose ranks No. 5, with a millennial homeownership rate of 20.2 percent, followed by No. 6 San Francisco, where 20.5 percent of those under 35 own homes.
A study earlier this year estimated that millennials in major California cities need around two decades to amass a down payment, and ABODO’s report is even more discouraging to younger homebuyers. Millennial buyers in Los Angeles will need an average of 32.2 years to amass a 20 percent down payment of more than $112,000, the longest wait in the country. San Francisco and San Jose millennial buyers face the next lengthiest savings times in the U.S. — a respective 28.7 years and 27.9 years — to amass down payments that exceed $140,000.
NAPA: ONE OF AMERICA’S TOP CITIES FOR A BACKYARD BASHThe Fourth of July is the quintessential holiday for a backyard barbecue, and there’s almost no place better in the U.S. for one than the Wine Country.
A realtor.com report ranks the 10 best American cities for backyard parties based on lot size, outdoor entertainment amenities, online sales of outdoor summer items, and number of sunny days. By that criteria, Napa ranks as the country’s second best city for outdoor summer parties behind Sarasota, Florida. With a median lot size of 8,000 square feet and 260 gorgeous sunny days per year, Napa also earns points for its spectacular scenery and homes that line the Napa River, many of which have private docks.
And speaking of pleasant weather, Los Angeles also makes the cut of top cities for outdoor parties, with 284 sunny days per year, the most on realtor.com’s list. Los Angeles’ median-sized 7,1000-square-foot lot and temperate evenings make it ideal for enjoying a flick on a backyard movie screen, an increasingly common sight in the city.
OAKLAND RENTS DROP ACROSS THE BOARD IN JULYThough Oakland remains a hot spot for Bay Area home shoppers who are priced out of San Francisco, rents in the city are at least cooling off this summer.
Zumper’s latest monthly rent report puts the median monthly rent for a one-bedroom apartment in Oakland at $2,100, tying it with Los Angeles for the nation’s sixth priciest market for tenants. One-bedroom apartments in Oakland fell by 0.5 percent from June and 7.5 percent from July of last year, while two-bedroom rental prices dropped even more.
As the nation’s most expensive rental market, San Francisco’s median price of $3,450 for a one-bedroom unit was up 2.4 percent from June but down 1.7 percent year over year. With a median rent of $2,390, No. 3 San Jose saw one-bedroom rents rise by 0.8 percent on a monthly basis and 4.8 percent from one year earlier.
MORTGAGE RATES AGAIN FALL TO 2017 LOWMortgage rates declined to another 2017 low last week, although rising Treasury yields may cause them to rise in the coming weeks.
Freddie Mac says that 30-year, fixed-rate mortgages averaged 3.88 percent for the week ended June 29, down from 3.90 percent the previous week and up from 3.48 percent one year ago. Fifteen-year, fixed-rate mortgages averaged 3.17 percent, unchanged from the week before and up from 2.78 percent at the same time last year.
According to California Association of Realtors President Geoff McIntosh, low mortgage rates may have accounted for the state’s home sales increase in May, though he noted that the Federal Reserve’s recent decision to raise interest rates means that favorable mortgage rates aren’t likely to last forever
Written by: Pacific Union