Sales are sagging. Prices are rising.
It’s a regional thing and it’s a national thing.
A new report from the CoreLogic real estate information service shows that September home prices were up 7 percent year-over-year across the nation.
In much of the Bay Area, the year-over-year increases were still higher: 11.7 percent in the San Jose-Sunnyvale-Santa Clara metro and 7.2 percent in the Oakland-Hayward-Berkeley metro. Trailing the national rate slightly was the San Francisco-Redwood City-South San Francisco metro, where prices rose 6.4 percent.
Frank Nothaft, CoreLogic’s chief economist, attributed the brisk pace of appreciation across most U.S. markets to the “low-for-sale inventory that is holding back sales and pushing up prices.” In other words, the supply of available homes is scant, which incites competition among buyers and drives prices upward.
According to CoreLogic, nearly half of the nation’s 50 largest markets are overvalued. Those markets include the Las Vegas, Denver, Los Angeles, Miami, Washington, D.C., New York and Houston metros. (CoreLogic defines an overvalued market as one where “home prices are at least 10 percent higher than the long-term sustainable level.”)
Interestingly, CoreLogic describes all three Bay Area metros — San Jose, San Francisco and Oakland — as being “at value,” despite the region’s widely discussed affordability problems.
The report projects that national prices will continue to rise. It forecasts a 4.7 percent increase between September 2017 and September 2018.
“While demand and home price growth is in a sweet spot,” said Frank Martell, CoreLogic’s president and CEO, the over-valuation of markets “will become more of an issue if prices continue to rise next year as we anticipate.”
Photo: This 1,193-square-foot house in Vallejo, CA, recently sold for $410,500. (Courtesy of Skip Dodge/Kennon Realty)