The overheated Bay Area real estate market cooled in October, with sales volume flattening and more sellers cutting their asking price – even while overall home price appreciation continued, according to real estate reports.
“There’s not a lot of oomph in the market post-midsummer,” said Andrew LePage, an analyst at San Diego’s DataQuick. “The pace of price appreciation has slowed if not halted, although it’s still up by a very impressive amount compared to a year ago.”
A total of 7,595 new and resale houses and condos changed hands in the nine-county Bay Area in October, DataQuick said. That was down 3.9 percent from October 2012, and 11.2 percent below the historic October average.
For the 19th consecutive month, the median price rose compared with a year earlier, notching in at $539,750, up 29.7 percent from the same time last year, DataQuick said. The median inched up 1.8 percent compared with September, and is slightly off its recent high of $562,000 in July.
DataQuick said about three-quarters of the median change came from rising home values; the rest from a changing mix of homes sold.
Distress sales – foreclosures and short sales – which drag down the median, were about 14 percent of resales, down sharply from 35 percent in October 2012, DataQuick said.
Lowering the price
A Zillow.com analysis of MLS data showed that price cuts became increasingly common in September, accounting for about a fifth or more of listings in each county except San Francisco, where 13 percent of properties had a price reduction.
Real estate agents, buyers and sellers all noted that a slowdown is palpable, although that is typical in the fall and winter.
After outgrowing their four-bedroom Corona Heights house, Carol and Peter Carrubba listed it for $1.699 million in October, in line with recent sales prices for nearby homes.
“It’s a great house, but when we moved in, we had two small children; since then my mother-in-law moved in with us and we’ve had another baby,” said Carol Carrubba.
After a couple of weeks with plenty of interest but no offers, they sliced $200,000 off the asking price.
“We wanted to reduce the price so we could energize interest in the property – and that seemed to do the trick,” said their agent, Kevin Koerner of Zephyr Real Estate.
They received two offers and now are in contract right around the asking price.
For buyers, the softer market means a better chance at staying within their budgets.
Sonal Basu, an agent with Redfin in the Tri-Valley area, said she represented a family seeking a Pleasanton home for under $900,000 who were consistently outbid throughout the spring and early summer. They didn’t even bother bidding on one $900,000 listing, assuming it would sell for far more. However, after it had an accepted offer fall through, that house was relisted at $870,000, and her client was able to swoop in and buy it at that price.
“I’m seeing more properties sit on the market and do price reductions,” she said. “Lately, we’re seeing just one or two offers, a huge market difference from 30 or 40 offers” earlier in the year.
Agents said the government shutdown in early October caused a slight slowdown in buyer traffic and may have delayed some deals, but it doesn’t seem to have made a significant dent.
Koerner said he sees signs of “buyer fatigue” as people take time off from house-hunting until after the holidays.
Leslie de Bretteville of McGuire Real Estate in San Francisco said sales of multimillion-dollar homes in neighborhoods like Pacific Heights have stalled recently.
“I see a real slowdown; there are a lot of big houses for sale and they’re just sitting,” she said. “They could be overpriced; buyers now are careful and don’t want to overpay.”
She has a luxury listing that hasn’t found a buyer. The two-bedroom remodeled condo in Pacific Heights, with panoramic views of the Golden Gate Bridge and San Francisco Bay from every room, started out at $3.95 million in September, which was exactly in line with similar recent sales, she said. After 30 days, the priced was slashed by half a million dollars, but it still has not received an offer.
“A price reduction has to be at least 10 percent to mean anything,” she said.
Showing how quickly the market can turn, “I sold another condo the same size as this one for double this price in July,” she said. While that condo had more parking and amenities such as a pool and gym in the building, it was otherwise comparable, she said.
The tech impact
Jamie Comer of McGuire in San Francisco said she’s seeing the loft category – live-work units with sleeping areas above an open living area, usually located South of Market – “catch fire” this year, driven by buyers from the tech industry.
“Tech buyers are offbeat, innovative and quirky; they really like lofts,” she said.
Despite some speculation that newly minted Twitter millionaires might juice the market, agents said that seems unlikely.
“When Facebook went public, people tried to liken it to the dot-com surge in early 2000 – but you just can’t generate that much change in a market with just one company,” Koerner said. “Twitter being in San Francisco as opposed to Facebook on the Peninsula is different in proximity, but I don’t think a few hundred employees will cause any kind of disruption in the market.”
Carolyn Said is a San Francisco Chronicle staff writer. E-mail: firstname.lastname@example.org Twitter: @csaid