San Francisco Bay Area Home Sales Lowest Since 2008
Focus on San Francisco Bay Area – September 2016
San Francisco Bay Area YTD Home Sales Lowest Since 2008
Distressed Property Sales Plummet 35.7 Percent, Lowest Since 2001
September 2016 Median Price Up 2.0 Percent Y-o-Y
CALIFORNIA, NOVEMBER 11, 2016 – In the first nine months of 2016 (January through September), San Francisco Bay Area single-family home and condominium sales fell 10.3 percent relative to the same period in 2015. Sales were the lowest since 2008. Distressed property sales fell 35.7 percent, the lowest in our records since 2001.
“The 35.7 percent decline in distressed property sales drove the overall decline in Bay Area sales to its lowest level since 2001,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “For several years now, the affordability of distressed properties contributed significantly to overall sales. Distressed property inventory has declined to the point it’s now a drag on overall sales. Bay Area sales will likely remain relatively flat until new, attractively priced, inventory arrives on the scene.”
Non-distressed property sales fell 7.1 percent. As a percent of total sales, distressed property sales accounted for 7.9 percent of total sales compared to 11.1 percent in 2015 and a high of 56.3 percent in 2009.
“The low level of distressed properties available for sale in the Bay Area is likely a challenge for real estate investors,” said Schnapp. “Lower home prices in counties just outside the Bay Area, but still within commute distance, may prove an attractive alternative.”
At the county level, sales fell in all the six counties in our study ranging from a decline of 8.2 percent in Contra Costa to 15.0 percent in Marin.
Bay Area Home Sales Summary by County(January through September 2016 Totals)
Source: PropertyRadar, 2016
When sales are divided into price categories, sales of properties whose sales prices were $500,000 or less fell 26.7 percent year-over-year. Within that category, distressed property sales declined 45.7 percent while non-distressed property sales fell 20.3 percent. In 2015 sales in the $500,000 category were nearly equal to sales in the $1 million-plus category. In 2016 sales in the lower-priced category had fallen considerably while sales in the $1 million-plus category were nearly unchanged.
San Francisco Bay Area Home Sales by Price, January through September 2016(January through September 2016)
Source: PropertyRadar, 2016
“The outsized decline in distressed property sales combined with the rapid increase in prices and the lack of buyers that qualify for higher-priced homes is reflected in the 26.7 percent decline in the sales of lower-priced homes,” said Schnapp. “Income growth in the Bay Area has not kept up with rapidly rising home prices shutting out a significant percentage of would-be buyers.”
The Bay Area September median home price increased 2.0 percent from a year earlier. Inspecting median price by county reveals considerable variation. The median price was up in five of the six counties ranging from a decline of 1.0 percent in Contra Costa County to an increase of 14.8 percent in Marin County.
San Francisco Bay Area Median Price Summary by County (Single Family Residence)(January through September 2016)
Source: PropertyRadar, 2016
“In August, we asked the question of whether or not home prices in the Bay Area were peaking or plateauing,” said Schnapp. “In September, the question of peak evaporated while plateau may still be in play. Prices fell in Contra Costa (-1.0 percent), decelerated in Alameda (+4.3 percent), and Santa Clara (+2.8 percent). In Marin (+14.8 percent), San Francisco (+9.3 percent) and San Mateo (+7.3 percent) prices jumped significantly and continued to defy gravity.”
“The persistent trend of sluggish sales amidst rising prices has been the story for over a year now,” said Schnapp. “Restrictive zoning and burdensome building regulations that limit construction have made adding new inventory difficult. That being said, apartment and condo development in San Francisco is on the rise and new inventory is expected to arrive in 2017.”
San Francisco Bay Area Home Sales (6-County Region)
San Francisco Bay Area Year-to-Date Home Sales – The sum of January through September sales of single-family residences and condominiums for the current year and prior years divided into distressed and non-distressed property sales. Six San Francisco Bay Area county totals are included in this chart (Alameda, Contra Costa, Marin, San Francisco, San Mateo, and Santa Clara).
San Francisco Bay Area Median Home Prices
Median Sales Price – Median sales price of a single-family home by county in the six San Francisco Bay Area counties (Alameda, Contra Costa, Marin, San Francisco, San Mateo, and Santa Clara).
