East Bay Real Estate Slowdown
After a dramatic six-year run-up in home sales and prices, a mild slowdown is underway in the East Bay.
Photo courtesy East Bay Association of Realtors
After a dramatic six-year run-up in home sales and prices, a mild slowdown is underway in the East Bay, according to real estate data firms and local real estate agents.
The median sale price of a home in the Oakland metro area was $750,000 in April — the exact same median price as one year ago, in April 2018, and a sharp contrast to the meteoric rises of past years, according to the real estate firm Redfin. The metro area encompasses most of the East Bay.
“Price appreciation has slowed from what we saw last year,” said Nancie Allen, president of the Bay East Association of Realtors. “It’s a more balanced market.”
Allen noted that the amount of inventory, meaning the number of homes for sale, has increased. One of the reasons often given for the Bay Area’s soaring prices was the tight market, with buyers competing over the few homes for sale. But this, too, is changing.
The number of homes for sale in the Oakland metro area jumped 54.6 percent in the first quarter of 2019, compared with the first quarter of 2018. There were 9,203 homes for sale in the first quarter, according to Redfin. The reason there are more homes on the market is that it’s taking longer for homes to sell.
However, Allen noted that while some areas are seeing more days on the market for homes and even price reductions, “‘Location, location, location’ still holds true.”
Allen, an agent with MasterKey Real Estate Advantage in Fremont, said prices and inventory are still strongly linked to specific places. For example, the number of homes for sale in Concord zoomed 48.4 percent in April compared with April 2018, to 181, according to Redfin. However, inventory increased only 5.9 percent in Oakland then and went down 5.7 percent in Berkeley.
Sellers can still expect a good return, Allen said. “The market is still incredibly good,” with multiple offers on homes that are properly priced.
The lack of price appreciation isn’t limited to the Oakland metro area. Prices were flat in the San Francisco metro area in April compared with the previous April. The median price there is $1.4 million.
Along those lines, “The Oakland metro area remains a more affordable place to live relative to the San Jose and San Francisco metros,” said Daryl Fairweather, Redfin’s chief economist.
The median sale price of a home in San Jose was $1.15 million in April, representing a 5 percent decline compared with April 2018.
“It’s interesting that in April, we saw an annual price decrease in San Jose, while prices remain flat in both San Francisco and Oakland. Our agents have noted that traffic in San Jose has contributed to declining demand for homes,” Fairweather said.
The economist said she believes the trend will continue in the Bay Area. Allen agreed that the moderating trend is firmly in place.
“We are in our new normal now for the rest of the year unless something dramatic should happen,” Allen said.