Home sales slowed in October across the Bay Area, dropping by just under 2 percent from the year before even as prices kept going up.
In what could be a bit of relief for buyers weary of competitive bidding, the sales dip marked a break from the brisk pace of recent months when new record highs were set in an already pricey market.Sales of single-family homes had risen on a year-over-year basis during each of the previous seven months, going back to March.
Median sale prices rose, though not by the double-digit margins that had become routine for some parts of the region during the frenzy of the past several years. In Santa Clara County, a typical home sold for $869,000, up 6 percent from $820,000 in October 2014 — though down from $910,000 in September 2015.
“The rate of home price appreciation has ratcheted down in a lot of markets,” said Andrew LePage, research analyst for the CoreLogic real estate information service, which crunched the latest numbers. He noted that buyers continue to flock to less costly inland communities in Contra Costa and Solano counties, where sales rose nearly 8 percent between October 2014 and October 2015.
The overall slowing of the market is both seasonal and “a sign of the times,” he said, citing the tight inventory and lack of affordability that plague the Bay Area’s nine counties. And as the market heads into its slow season, there can be “good news for home shoppers … less competition and possibly a lower price.”
With children in school and the holidays coming, year’s end tends to be a down time for house hunting. Inventory shrinks even further and potential buyers “get on the Internet five different times and see nothing, so they stop looking,” said Margaret Garber-Teeter, an Alain Pinel agent based in Walnut Creek. “They say, `I’m going to wait until spring.’ “
Garber-Teeter said she had eight listings come on the market last month. Five have sold. Two are pending. “The market is holding. It was strong last month, but it was not like we had the kind of overbidding that we were seeing in the spring. That’s good for buyers to know.”
Her clients Richard Zinn and Becky King, who live in Walnut Creek, decided to sell a rental property they owned in that city, a 1,500-square-foot townhome with three bedrooms on a choice wrap-around lot.
“We got there late in the selling season,” said Zinn, who works in broadcasting. “But we knew it was a great property and my wife spent significant time cleaning it up and getting it ready. We staged it, put new carpet in and painted, and I think it went on the market on a Friday, and it was gone by the next weekend. There was one open house and it was gone four days later.”
The property, which listed for $699,000, sold for $728,500, he said.
Pleasanton-based agent Steve Mohseni, of Mohseni & Associates, described “a general softening of the market. We may be heading into a period when appreciation will slow down compared to what we have been seeing over the past five years. Buyers are rethinking, pausing.” After years of record prices, he said, “their willingness to pay more into new highs will be somewhat limited.”
The situation is pushing some potential sellers off the fence: “Once the market starts to soften, then people start thinking, `Well, let me get out of Dodge.’ “
He mentioned clients who moved to Cupertino in 2004, purchasing a house for $1,130,000. “They moved there to provide good schools for their kids and be in Silicon Valley close to their IT jobs. Now their kids are done with college and moved on. So they decided to sell, downsize and cash in their equity.”
The house — less than a mile from Apple headquarters — is under contract for about $2.1 million, and the couple plans to buy a new home at a fraction of that price in Pleasanton, he said, while taking their lower property tax bases to Alameda County.
“Real estate is very, very local,” said agent Mark Wong, an Alain Pinel agent based in Saratoga. “In Cupertino, anything under $1.5 million — it’ll be gone in a week with multiple offers. In Palo Alto and Saratoga, anything under $2 million will be snapped up.”
He cited a one-bedroom, 1,200-square-foot home in Palo Alto that listed last month for $1.98 million: “They got 14 offers and it sold for $2,601,000.”
The high-end market — properties listing for $3 million or more — “may be softening a little.” Even so, Wong said he was about to take “an all-cash buyer from China” to Los Altos Hills to have a look at a six-bedroom, eight-bath Tuscan-style mansion that’s listed for $10,888,000.
“It takes a little bit more time,” he said, ever the optimist, “but the buyers are still out there.”
Contact Richard Scheinin at 408-920-5069, read his stories at www.mercurynews.com/richard-scheinin and follow him at www.twitter.com/RealEstateRag
