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Throughout The Bay Area, New Listings, Active Listings And Price Reductions All Surged

A report from the Marin Independent Journal in California. “Marin real estate professionals said the slowing pace of sales and corresponding price reductions could offer openings for buyers looking for a foothold in Marin. ‘Definitely the number of sales are down,’ said Patti Cohn, of Pacific Union Real Estate. ‘Some buyers are staying on the sidelines in general, wondering about the state of the market,’ she added. ‘There are slightly more homes on the market now and we are seeing price reductions here and there.'”

“Kathy Schlegel of Golden Gate Sotheby’s International Realty said she has seen ‘much less traffic at open houses and fewer multiple offers in the last few months.’ ‘Prices are up from the same time last year, but we have seen an increase in list price reductions recently, which means the prices of homes have appeared to level off since June,’ she said.”

The San Francisco Chronicle. “Signaling a market in transition amid a surge in new listings, the median price paid for a new or existing Bay Area home or condo last month was $815,000, down 1.8 percent from August but up 9.3 percent from September 2017, CoreLogic said.”

“Sales in the nine-county region dropped sharply to 5,970. That was down 22.1 percent from August and down 18.9 percent year over year. That was almost twice the normal drop between August and September and the lowest sales count for the month of September since 2007.”

“‘There is still a gap between sellers who are trying to extrapolate out what they have seen in the past three or four years in price increases and buyers who have more options to choose from. I think that still has several months to play out,’ said Jordan Levine, senior economist with the California Association of Realtors.”

“Throughout the Bay Area, new listings, active listings and price reductions all surged last month year over year, said Patrick Carlisle, chief market analyst with the Compass real estate brokerage.”

“The change was most striking in Santa Clara County, which had been one of the nation’s hottest markets for most of this year. There, new listings of existing, single-family homes were up 83 percent year over year in September, active listings were up 120 percent and the number of homes with price reductions was up 308 percent, Carlisle said.”

“In San Francisco, the comparable numbers were 28, 8 and 32 percent. If you compared September 2018 to September 2016, the increases were much less dramatic. That’s because the Bay Area market was ‘ferociously hot’ from 2017 through this spring, Carlisle noted.”

“Last week, the California Association of Realtors reported that the number of existing, single-family homes on the market in the Bay Area was 44 percent higher in September than in September of last year. Statewide, active listings rose only 20 percent, the sixth consecutive month of increases following 33 straight months of declines.”

“Levine said the market is transitioning from a strong seller’s market to more equilibrium. ‘The market is less competitive, with a lot more listings for buyers to choose from. That, taken together within higher interest rates and higher prices, has cooled demand. You are seeing time on market come up a little bit, premiums are coming down to list (price) or a little lower.’ There are ‘more active listings that haven’t sold yet that have price reductions,’ he said.”

From ABC 7 News. “There are signs that the red-hot Bay Area real estate market may finally be cooling off. A new report by Corelogic shows the Bay Area just had its slowest September in 11 years. Last month, our nine-county region recorded 5,970 homes sold. That’s down nearly 19 percent from September of last year.”

“Sales dropped just over 22 percent from August to September, and while there’s always a slowdown from summer to fall, this decline is nearly double the 30-year average. Prices are also trending downward.”

“‘The home prices have been going up almost 100 percent in the last five years and it’s just unsustainable. So a small drop in prices is expected,’ said Bay Area realtor Donald Kung.”

“So what does this mean for you? ‘When you look at the market, when you see some corrections and this is a neighborhood you want to buy into, this is a good opportunity for buyers. And maybe sellers’ expectations need to be taken down a little bit,’ Kung said.”

This Post Has 23 Comments
  1. ‘the Bay Area market was ‘ferociously hot’ from 2017 through this spring’

    Gosh, I hope no one overpaid in such an environment.

    ‘The change was most striking in Santa Clara County, which had been one of the nation’s hottest markets for most of this year. There, new listings of existing, single-family homes were up 83 percent year over year in September, active listings were up 120 percent and the number of homes with price reductions was up 308 percent’

    Oh dear… What happened to my shortage?

    1. BTW, a parabolic blow-out top followed by a sharp reversal is consistent with a bubble. And to see the supposedly most desirable, single family Santa Clara shacks, get slammed hardest is exactly what we’ve seen in London, Manhattan, Vancouver, Toronto and Sydney.

  2. while there’s always a slowdown from summer to fall

    Wait a minute. Just a few weeks ago wasn’t a realtor saying things always pick up in September?

    1. And what about “Its slowing down because the kids are going back to school”.

      Dear REIC: My Christmas wish this year is for you guys to get your stories straight. Is that too much to ask?

    2. Carl, I remember that too. Maybe they are talking about retirees getting the urge to snowbird (I don’t remember the area).

      1. That’s January. It happens every year to my Dad. Once the holidays are over and the winter blues start to take effect, he always says “I need a place in Florida. I need to get out of here.” Except for a several month government sponsored trip to Vietnam he has lived in upstate NY his whole life.

    1. When you need lumber, go to a lumber yard. When you need mech or elec, go to a supply house….. and pay half the price.

      Paying double for materials that don’t meet spec doesn’t make sense.

    2. Yet another reason to leave that state if at all humanly possible. (Note: I was born and raised in SoCal)

  3. Amazing how history repeats itself. This is our area in about 2006, complete with the same public rhetoric in press. Have you noticed the change in,tone over the past month or so? The language is changing as is interpretation of data. Even Shiller said it is reminiscent of 2006 although he back peddled by following that he did not foresee a crash. Read between the lines. No one has a crystal ball but history is a pretty good teacher.

    1. “History may not repeat itself but it does rhyme.” -Joseph Anthony Wittreich

      I read Shillers statements the other day as well. It’s funny how many media outlets reported Shiller as saying there was no bubble (or something along those lines). He was actually very cautionary:

      “If the markets go down, it could bring on another recession. The housing market has been an important element of economic activity. If people start to get pessimistic about housing and pull back and don’t want to buy, there will be a drop in construction jobs and that could be a seed for another recession. By the way, we’re overdue for another recession.”

      He continued:

      “The housing market does have a momentum component and we’re seeing a clipping of momentum at this time.”

      Yeah, I wouldn’t expect this correction to play out exactly like the last one. But you know one is coming. Even Yun was saying that wage growth has been like 10% in the past 6-8 years and housing prices have gone up like double. That implies a correction of around 40% to get back in line with what was already a bit frothy. In a true correction, the pendulum tends to overshoot on the way down.

      1. That implies a correction of around 40% to get back in line with what was already a bit frothy.

        Exactly.

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