Good news for Bay Area home buyers — houses are staying on the market longer, and more houses have “for sale” signs hanging on their front lawn.
Bad news for Bay Area home buyers — the increased choices in the market are likely caused by high prices, fewer offers and your exhaustion.
The number of homes for sale in the first three months of the year in the San Jose metro area rose 55 percent from the same time last year, the highest jump in the nation, according to a recent study by Trulia. In Oakland and San Francisco, housing inventory grew 28 percent from the first three months of last year.
“Definitely a big jump in inventory,” said Trulia economist Felipe Chacon. “Demand is ebbing a little bit.”
In the midst of a housing shortage and rising prices, the Bay Area market has flattened out, but not nearly enough to call it a buyer’s paradise. Agents and brokers say they are expecting another solid year of sales, but aren’t betting on the influx of IPO wealth making an impact beyond a few, local neighborhoods.
Nationally, inventory has edged up for the first time, year-over-year, since 2016, Trulia found. “The coastal markets are cooling,” Chacon said.
The supply of starter homes — listed for around $760,000 — on the San Jose market grew by 78 percent, according to Trulia. In San Francisco and Oakland, less-expensive starter homes priced at around $530,000 increased 38 percent.
The days on market has grown more than 40 percent in San Jose, from 40 to 57 days, according to Trulia. The national average is 82 days from listing to completed sale.
Real estate agents say last year’s market fever has broken and buyers have become more willing to wait. But many also see signs of strong prices for sellers, and bidding wars through the spring home shopping season. Demand remains high for homes in strong school districts.
After a record seven-year run, Bay Area median home prices stalled in March, compared to the previous year. The median home price in the nine-county region fell .6 percent to $860,000, according to real estate data firm CoreLogic.
Fremont agent Sunil Sethi said demand has slowed, but buyers are snapping up homes in good neighborhoods. “It was not a very strong quarter, as far as buyers being out there,” he said. “The middle market is pretty good.”
In Fremont, the “middle market” is between $1.4 and $1.8 million, Sethi said. The price and East Bay location appeals to tech professionals commuting to major employers on the Peninsula, including Facebook, Google, Apple and Amazon.
In the South Bay, Alan Wang said the market is moving toward balance between buyers and sellers. The first few months of the year were slow, he said, but activity has recently picked up.
Wang analyzed home sales in Santa Clara County in April and the first two weeks of May. Between 2014 and 2018 during these periods, the ratio of homes sold to homes on the market was about 90 percent. This year, the same ratio was down to just 33 percent, meaning far fewer transactions for the number of homes on the market.
“Buyers are very picky now,” said Wang, based in Santa Clara. After years of ever-escalating prices and bidding wars, he added, “sellers are slowly adjusting their expectations.”
Other regions are seeing more robust inventory growth from a more traditional source — construction.
San Jose just nudged out Provo, Utah for the top housing inventory growth in the country. The mountain community, home to Brigham Young University, saw for-sale-homes grow 53 percent from the prior year, and more than doubled the percentage of starter homes on the market. The median sale price for a starter home in Provo was $259,450.
In Utah, Chacon noted, developers have been building lots of new homes.