First Republic Bank’s Prestige Home Index indicates luxury homes in San Francisco had a strong finish to 2013. But some suggest that California’s high-end housing market is starting to see a slowdown.

Mark Calvey
Senior Reporter- San Francisco Business Times

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The Bay Area’s luxury home market is signaling a slowdown ahead even as prices late last year were still showing year-over-year double-digit increases.

First Republic Bank’s Home Prestige Index released Monday found that luxury home prices in the Bay Area and other key California markets are near records amid tight supplies of homes selling for $1 million and often more.

But it’s the commentary from real estate agents that set off alarms for careful followers of the luxury housing market. The commentary follows recent economic reports pointing to a national housing slowdown, which some blame on the extremely cold weather. The National Association of Realtors said last week that January existing home sales fell more than 5 percent nationally, the worst showing in 18 months. But if bad weather is to blame, some ask why were sales down 7.3 percent in the warm and sunny West?

In discussing First Republic’s latest quarterly figures released Monday, real estate agents in California’s luxury housing market are using telltale language of trouble ahead, with such phrases as “supply is plentiful” and the “market is solid,” while others see “buyer resistance” and “expect the market to level off.”

That type of talk could put a further chill on the housing market and prompt more home owners to put their properties on the market before prices fall.

Real estate agents say that pricing and demand for the limited supply of homes on the market is approaching levels last seen just before the housing market began to crater in 2007.

Earlier this month, Christopher Stafford and Terry Wright, both of Paragon Real Estate Group in San Francisco, sent an email to clients alerting them to “shifts in the San Francisco real estate market.”

“It is far too early in the year to reach definitive conclusions regarding substantive changes in the market, but there are indications of a number of shifts,” the Paragon agents said. “From the hurly burly on the street, the word is that the quantity of offers coming in on new listings is declining. Where a new listing might have attracted 10 or 12 offers last spring, three or four are coming in now; where three or four offers would have arrived, the seller is getting one.”

For those who don’t fully appreciate what the decline in offers mean, the Paragon brokers put it bluntly, “The amount of competition deeply affects home-price increases.”

“And, according to Broker Metrics, for every two listings that accepted offers in December and January, another listing expired or was withdrawn without selling.”

The Paragon agents see plenty of potential buyers checking out online listings and open houses, but more of them are first-time buyers who are “proceeding more cautiously.” Plus that group doesn’t come in with the buying power of home equity built up over the years.

“Though the market remains hot by any reasonable standard, by some statistical measure it is cooling,” the Paragon agents advised clients. “This may reflect a transition or only a lull before the spring sales season begins.”

On Monday Stafford echoed a frequently heard lament in Bay Area real estate circles, “There is no inventory.”

“It seems some of the heat has been taken off the market,” Stafford told me, adding that he views any references to the market “cooling” as overstating the case.

Those hoping that the Bay Area’s luxury housing market gets a big lift this spring might be disappointed as the affluent experience what Marcum’s accountants call “tax shock” as their higher 2013 tax bills must be paid. This segment of the market is also greatly affected by stock market performance, given how much wealth is created in the Bay Area through stock options and initial public offerings. The IPO market also helps set prices paid by acquirers of private companies. The tie between stocks and luxury housing is so strong that one real estate agent, when asked for his outlook on the region’s luxury home market, said, “You’re asking me to predict what the stock market will do.”

The traditionally strong spring housing market may see even more inventory come to market if home owners decide that they’ll get better prices by selling sooner than later.

On Monday, First Republic’s closely watched survey of luxury home values clocked in strong gains from a year ago, but more modest gains from the third quarter, especially when looking at the third quarter’s gain over the second quarter of 2013.

In the Bay Area, luxury home values in last year’s fourth quarter rose 12.4 percent from the fourth quarter of 2012 and 1.8 percent from the third quarter of 2013. That was just below the third quarter’s gain of 1.9 percent from the second quarter of 2013.

In Los Angeles, the fourth quarter’s luxury home values rose 13.7 percent from from a year ago and 1.3 percent from the third quarter. The quarter-over-quarter gain was down sharply from a 6.7 percent gain seen in the third quarter from the second quarter.

In San Diego, luxury home values rose 16.6 percent year-over-year and 1.3 percent from the third quarter of 2013. Again, that represented dramatic slowdown in price gains from the third quarter’s 6 percent increase from the second quarter.

San Francisco-based First Republic Bank produces the quarterly Prestige Home Index with Core-Logic Case-Shiller, a provider of automated property valuation services to the financial services industry. First Republic has tracked luxury homes since the bank’s founding in 1985.

The fourth quarter figures and analysis may provide a snapshot of rising luxury home values as the market was turning down.

“Luxury home prices again posted double-digit gains on a year-over-year basis,” said Katherine August-deWilde, president and chief operating officer of First Republic Bank. (NYSE: FRC) “Market conditions in California’s luxury communities continue to be very strong. Limited inventory, robust demand and low interest rates are driving prices higher.”

In Marin County, higher-priced homes saw gains.

“Going into the end of the year, homes $4 million and above finally picked up,” said Pat Montag of Sotheby’s International Realty in Mill Valley. “Prices are getting close to the peak of the market in 2007. We have very little inventory and that’s constraining the market.”

San Francisco also participated in the strong housing market last year.

“Prices continue to rise because there is so little inventory and so much demand,” said Mary Lou Castellanos of Sotheby’s International in San Francisco. “There are a lot of people who want to buy. The homes that do come to market generate multiple offers and offers over the asking.”

And new tech wealth is spurring luxury home buying on the Peninsula.

“From Palo Alto to Atherton, we are seeing offers 20 percent to 40 percent over the asking price,” said Pat Kalish of Alain Pinel Real Estate in Palo Alto. “It’s tech money as well as foreign buyers. From all indications, prices will keep increasing because the inventory is so low. If you’re a homeowner, this is one of the best times ever to sell.”

Hope springs eternal among those selling real estate.

Southern California also enjoyed a strong market as the stock market clocked in with one of its best years ever in 2013.

“The demand is incredible. It is much stronger than it was in 2006 at the height of the market. Homes that were selling at $10 million in 2005 and 2006 are now $20 million and $25 million. It’s astounding,” said David Mossler of Tele Properties in Beverly Hills.

Further south in Orange County Ron Miller of HOM Sotheby’s in Newport Beach told First Republic Bank that homes at $4 million are selling above year-earlier comps.

“The attractive properties are generating multiple offers,” Miller said. “I see some buyer resistance now and expect the market to level off.”

Even further south in the San Diego area, more signs of a cooling market are evident.

“We’re seeing multiple offers and offers over the asking for properly priced homes up to $3 million,” said Linda Sansone of Willis Allen in Rancho Santa Fe. “From $3 million to $5 million, the market is solid, prices are appreciating and supply is tight. For homes $5 million and above, there is plenty of supply, and prices are rising modestly.”

Sue De Legge of Sue De Legge Associates, also in Rancho Santa Fe, said home-price appreciation was driving the market.

“Rising prices are motivating more sellers to list their homes,” she said. “We expect more inventory to be brought to market in coming months.”

And as a reminder for those who missed Econ 101, rising supply is likely to put downward pressure on prices. One thing is certain: this spring’s home-selling season will be well worth watching.

Mark Calvey covers banking and finance for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/2014/02/home-prices-san-francisco-real-estate.html?page=all

This three-bedroom home at 330 Gravatt Dr. in Berkeley is on the market for $1.15 million.

Blanca Torres
Reporter- San Francisco Business Times

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Homes in East Bay cities are seeing dramatic price gains far greater than homes in San Francisco, according to ZipRealty, an online real estate brokerage.

Oakland’s median home price ballooned 76 percent to $432,000 in August compared with $245,500 in August of 2012. In Hayward, home prices jumped 55 percent to $387,000 in August 2013 compared with $250,000 last year.

Meanwhile, San Francisco’s median went up by 20 percent to $880,000, up from $735,000.

“Oakland and other communities in the East Bay were impacted more severely by the foreclosure crisis, which took a toll on East Bay real estate values while also setting these areas up for the dramatic recovery in prices we are now witnessing,” said Lanny Baker, president and CEO of Emeryville-based ZipRealty.

Prices are up by 36 percent across the nine-country Bay Area with a median of $585,000, so cities like Oakland and Hayward represent a deal in the region.

Nonetheless, prices can vary significantly from ZIP code to ZIP code in the same city. For example, Berkeley, where the median home price jumped by 21 percent during the past year to $737,500, has three ZIP codes where the median is above San Francisco’s median: $955,000 in 94707, $901,000 in 94708 and $1.22 million in 94705, which includes neighborhoods such as Claremont, the Claremont Hills, Elmwood and Panoramic Hill.

In Oakland, the 94610 ZIP code has the highest median home price of $743,000 and encompasses neighborhoods like Grand Lake, Adams Point, Lakeshore, Crocker Highlands and Trestle Glen.

In San Francisco, some of the fastest appreciating neighborhoods include North Beach and Telegraph Hill in the 94133 ZIP code where prices grew by 82 percent during the past year as well as the Marina, Cow Hollow and Pacific Heights in the 94123 ZIP code where prices rose by 68 percent in the past year.

A number of factors influence how much an area’s median home price goes up such as number of homes available. Cities such as Oakland, Berkeley, Hayward and San Francisco had less home inventory in 2013 than the year before.

Blanca Torres covers East Bay real estate for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/09/east-bay-home-prices-san-francisco.html

Newly Transformed SOMA Office Building Achieves LEED Gold Certification

SAN FRANCISCO–(BUSINESS WIRE)– Less than two years after acquiring the 40-year-old, 410,000 square-foot office building at 360 Third Street, Kilroy Realty Corporation (NYS: KRC) has successfully transformed the property into a contemporary office and studio space for the media and technology tenants that now dominate SOMA’s real estate landscape. Last week, the redeveloped property—now 85% leased—was awarded LEED Gold certification.

“From the beginning, our goal was to deliver a top quality, top performing work environment with all the amenities sought after by creative and innovation-driven companies flooding into the SOMA area,” said John Kilroy, Jr., KRC’s chairman, president and CEO. “Not only did we achieve this but I think we’ve successfully converted this former Pacific Bell call center into a ‘hip and cool’ new digital, media and technology powerhouse.”

Today, 360 Third Street features San Francisco’s largest roof deck with views of the Bay Bridge, ATT Ball Park and the San Francisco Bay including a rooftop bar, integrated lighting and sound systems, fire pits and extensive landscaping. Elevator systems were modernized and extended to the roof deck, building infrastructure was updated to support densification and the lobby and floor plans were redesigned into contemporary, collaborative layouts. A new irrigation system was installed that reduces landscaping water usage by 50%, and a new measurement and verification system was added to the building that allows individual tenants to monitor and manage energy consumption. Bicycle storage and showers were also incorporated into the new design as part of the amenity package that tenants seek in today’s modern office campuses.

“We were able to create a new vibe in the building—taking it from un-inspired shell office space and conventional common areas to more vibrant and productive technology and media space with inviting public areas that include indoor and outdoor ‘great’ rooms and modern amenities. Achieving LEED Gold certification serves as a testament to the successful transformation of the project by our team,” said Mike Sanford, KRC’s Senior Vice President, Northern California.

KRC acquired 360 Third Street in late 2011 when the building was 9% occupied by media conglomerate, ComCast SportsNet who uses the space to broadcast its CSN Bay Area programs. Building off Comcast’s studio, 360 Third Street was able to attract Pac-12 Enterprises, who signed an 11-year lease almost immediately after KRC closed on the acquisition. The multi-floor lease agreement with PAC-12 Enterprises included the creation of a state-of-the-art studio for PAC-12′s broadcasting arm. In addition to ComCast SportsNet and PAC-12 Enterprises, the roster of tenants at 360 Third Street currently includes KNTV, AKQA, Square Trade, Flurry, Real Page and Clinkle.

About Kilroy Realty Corporation
. Kilroy Realty Corporation, a member of the SP MidCap 400 Index, is a real estate investment trust active in major West Coast office markets. For over 65 years, the company has owned, developed, acquired and managed real estate assets primarily in the coastal regions of Los Angeles, Orange County, San Diego, the San Francisco Bay Area and greater Seattle. At June 30, 2013, the company owned 13.5 million rentable square feet of commercial office space. More information is available at http://www.kilroyrealty.com.

Kilroy Realty
Mike L. Sanford
Senior Vice President, Northern California
(415) 778-5678 office
(650) 888-2228 cell
or
Caitlin Kilroy
Marketing and Leasing Associate
(415) 778-5670 office

KEYWORDS:   United States  North America  California

INDUSTRY KEYWORDS:

Article source: http://www.dailyfinance.com/2013/09/19/kilroy-realtys-360-third-street-goes-gold/

#1. This three-bedroom home in Piedmont is offered at $2.75 million. Piedmont has a School Score of 9.5 and a median home price of $1.2 million.

Blanca Torres
Reporter- San Francisco Business Times

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For homebuyers looking for a great public school district, the East Bay is the top area to buy a home in the Bay Area. Emeryville-based ZipRealty, an online brokerage, compiled a list of the top selling cities in the Bay Area with the highest ranking public schools — eight were in the East Bay.

Click on the slideshow to see the top 10 .

“Home values and school scores are always going to be linked,” said ZipRealty President and CEO Lanny Baker. “In order to give our users the most complete picture of a home’s value, we provide a School Score, which is calculated based on test-score data as well as student/teacher ratios, for every home listing on ZipRealty.com.”

The scores range from zero to 10 with 10 being the highest.

The No. 1 city with the highest school score is Piedmont, a small rich enclave completely surrounded by Oakland where the schools scored a 9.5 and the median price dropped 27 percent to $1.2 million in August of 2013 from $1.53 during the same month last year.

The only non-East Bay cities on the list were Palo Alto and Benicia.

Overall, median home prices in the Bay Area rose 36 percent during the past year to $585,000.

Nationwide, the Bay Area real estate market ranked second after Sacramento for having the best public schools. The Bay Area is followed by Las Vegas, Los Angeles and Orlando.

Blanca Torres covers East Bay real estate for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/2013/09/bay-area-real-estate-top-school-district.html

PAE Engineers designed the building systems for the six-story Bullitt Foundation building Seattle that is one of the five “living buildings” PAE has worked on.

Blanca Torres
Reporter- San Francisco Business Times

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PAE Consulting Engineers Inc. wants to work on the first “living” building in San Francisco. They just need a developer or architect to hire them.

The Portland-based engineering firm opened its San Francisco office less than three years ago to bring its expertise in sustainable buildings to the market.

PAE specializes in sustainability practices such as zero net energy, where a building generates more energy that it uses, and living buildings, which are structures that capture and generate their own water supply and are not connected to a municipal sewer system.

The Bay Area is home a few zero net energy buildings like one in San Leandro, a industrial building retrofitted to house an electrical union training center, and the Exploratorium, which opened earlier this year in San Francisco.

But there are no living buildings in the Bay Area.

“We want to find people interested in this challenge,” said John Paul Peterson, senior associate with PAE’s San Francisco office. “Let’s make this happen here. We know the science can work.”

PAE has worked on five living buildings including one in downtown Seattle, a six-story office building for the Bullitt Foundation, that opened earlier this year. The firm designed a system that composts all the waste from toilets (people still flush, in case you were wondering) and has a its won rainwater reclamation system.

The building takes advantage of natural lighting, which is more challenging in Seattle than in San Francisco, uses geothermal radiant heating and cooling, and encourages occupants to take the stairs instead of elevators as much as possible.

Blanca Torres covers East Bay real estate for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/09/pae-engineers-zero-net-energy-buildings.html

This home at 3800 Washington St. in the Presidio Heights neighborhood of San Francisco is on the market for $21 million. It has eight bedrooms, seven bathrooms and 17,895 square feet. Prices for homes above $1 million grew by 11 percent during the past year.

Blanca Torres
Reporter- San Francisco Business Times

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The Bay Area’s housing market continues heating up, but for how long?

Home values in the Bay Area rose by 27.8 percent during the past year to an average of $628,200 in July, according to Zillow, a real estate information site. Zillow calculates home value appreciation for all homes, not just homes that have sold or are on the market.

Click on the image for a slideshow of Bay Area homes that are on the market or have risen significantly in value.

San Francisco ranked third nationwide for home value appreciation after Sacramento with 33.1 percent growth to $274,600 and Las Vegas with 30.8 percent growth to $151,600.

Nationwide, home values crept up by 6 percent during the past year to an average $161,600 — about 25 percent of San Francisco’s average (kind of makes you want to move doesn’t it?).

“The U.S. housing market recovery has proven it is on very sound footing,” said Zillow Chief Economist Dr. Stan Humphries. “We have entered a new phase in the recovery when we can begin to turn away from ugly recent history and turn toward what the housing market of the future will look like and how it will act.”

The housing market has improved significantly, but I’m not sure the Bay Area’s performance will continue to rise at the rapid pace we’ve seen in the past couple of years.

Also, the market here is increasingly shifting toward the high-end and away from first-time and entry-level buyers.

First Republic Bank reported today that luxury home prices in the Bay Area jumped 10.9 percent during the second quarter of this year compared with 2012 to an average of $2.9 million — the highest since the fourth quarter of 2008 and approaching the all-time highs of 2007.

Blanca Torres covers East Bay real estate for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/08/bay-area-home-values-up-28-percent.html

Jeff Bezos

J.K. Dineen
Reporter- San Francisco Business Times

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Amazon.com Inc. is pushing ahead with a San Francisco expansion that will grow its footprint in the city to nearly 150,000 square feet.

In August, the Seattle-based online retailer signed a 65,000-square-foot lease at 475 Sansome St. The deal surprised downtown real estate observers because Amazon (NASDAQ: AMZN) had previously leased 20,000 square feet in the Sansome St. building but had planned to sublease the space when it took 83,000 square feet at 188 Spear St. Instead, not only did Amazon decide to keep its space at 475 Sansome St., it tripled its commitment there.

Amazon has about 80 jobs open in San Francisco, more than half of which are for its Amazon Music division, according to the group’s website. The ads are looking for engineers and designers to “help us build the world’s best online music player.”

The deals come as Amazon, led by Jeff Bezos, is also making big moves in Silicon Valley. In 2012, the group agreed to a lease of close to 600,000 square feet at Jay Paul Co.’s Moffett Towers complex to house its Lab 126 subsidiary, previously located in Cupertino. The lab is where the Kindle and the Amazon smartphone are developed.

“Amazon is on a space tear in the Bay Area,” said Research Director Colin Yasukochi of CBRE. “If you add up what they did down in the valley and what they are doing here, they have added a lot of space in the Bay Area. Of course, if you compare it to what they are doing in Seattle, it’s a drop in the bucket.”

In downtown Seattle, Amazon is developing a 3.3-million-square-foot high-rise campus on three blocks; construction is underway on the first block.

The Sansome St. deal was the second large new lease in the month of August, slightly smaller than Cisco’s 67,000-square-foot lease at 500 Terry Francois.

J.K. Dineen covers real estate for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/2013/09/amazon-goes-on-bay-area-growth-spurt.html

The Golden Gate Bridge is seen in the view from a 15,000-square-foot custom built home on Belvedere Island in Marin County, California, U.S., in Dec. 2012. The builder couldn’t find a buyer for the brand-new waterfront mansion he listed in January for $45 million. He hoped one will turn up at an auction, where the starting bid was $25 million. Photographer: David Paul Morris/Bloomberg

Blanca Torres
Reporter- San Francisco Business Times

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Home prices across the country show signs of stabilizing — except in the Bay Area where we continued to see big price spikes. Why do we always have to play the role of outlier?

Signs of stabilization depend on increases in median home price, numbers of new listings and the average number of days for-sale homes stay on the market.

In the Bay Area, our inventory of new listings increased by only 3 percent to 8,006 homes in July 2013 compared with the same month last year, while our median home price soared by 40 percent to $610,000 in July, up from $436,000 the prior year, according to Emeryville-based ZipRealty.

At the same time, nationally, inventory levels grew by an average of 12 percent and median home prices beefed up by 15.8 percent — a lot more moderate than our 40 percent hike.

Van Davis, ZipRealty’s president of brokerage operations, called the growth in the U.S. real estate market, “one of moderation with underlying strength.”

“The increase in listings coupled with moderating price growth and sales volumes provide significant evidence that the real estate market is beginning to become more balanced,” Davis said.

More inventory on the market keeps prices from ballooning, but clearly that isn’t happening in the Bay Area.

In fact, our total inventory of available homes dropped by 21 percent to 8,275 in July 2013, compared with 10,466 in July 2012.

Places where new listings are climbing at impressive rates include Denver with 34 percent growth, Portland, Ore. with 24 percent, Orange County with 22 percent and Seattle and San Diego both with 21 percent.

“Several metros on the West Coast, which have had the greatest supply imbalances, are now seeing the biggest increases in listings,” Davis said. Did you notice San Francisco is a glaring omission on that list?

Blanca Torres covers East Bay real estate for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/08/housing-market-stabilizing-everywhere.html

This one-bedroom home in Berkeley at 1196 Cornell Ave. is on the market for $400,000.

Blanca Torres
Reporter- San Francisco Business Times

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For all the talk in recent years about more Bay Area residents steering toward a “car-free” lifestyle, it sure is hard to find a place to live that is affordable and pedestrian-friendly once you leave San Francisco’s city limits.

Emeryville-based ZipRealty Inc. ranked the most walkable cities with the most affordable homes near San Francisco and came up with a whopping four cities: Emeryville, downtown San Jose, Albany and Berkeley.

ZipRealty used data from WalkScore.com, which ranks locations with walkability scores of 0 to 100, to come up with its list.

“One of the allures of living in San Francisco is the city’s beautiful and convenient walkability, and that appeal is well-reflected in its lofty real estate prices,” said CEO and President Lanny Baker. “According to our partner Walk Score, San Francisco is the second-most walkable large city in the United States, behind New York City. In the local study we conducted, the most walkable and affordable communities were quite surprising alternatives to the high average price in San Francisco, which currently exceed $1 million.”

Here is a breakdown of the four cities with median home price and Walk Score:

1. Emeryville: $388,888 / 80.
2. Downtown San Jose: $508,450 / 74.
3. Albany: $622,500 / 86.
4. Berkeley: $786,256 / 95.

This list points out some interesting dynamics about Bay Area real estate. It appears living in a city where you can get around without a car will cost you a premium. San Francisco by nature is a dense, walkable city with amenities around the corner in most neighborhoods. In contrast, cities around San Francisco developed with the more suburban model of separating residential and commercial areas, making residents dependent on cars.

Emeryville is a compact, 1 square-mile sized city that has undergone a major transformation during the past few decades from an industrial wasteland to a city with thriving commercial and retail districts. Most of the housing there is either apartments or condos, as is the case with most of the homes for sale that fit ZipRealty’s criteria for affordable and walkable.

Having alternatives to driving is not just better for the environment and buyer’s pocketbooks, but has other benefits, said Josh Herst, CEO of Walk Score.

“The trend in urban areas is moving toward less dependency on cars and a greater commitment to live more sustainably,” Herst said. “People in walkable neighborhoods weigh six to 10 pounds less than those who don’t. Walk Score has also done extensive research showing that walkable places make people happier and healthier. Finally, short commutes reduce stress levels and give people more free time to be involved in their communities.”

Blanca Torres covers East Bay real estate for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/08/top-bay-area-cities-where-you-can-buy.html?page=all

Buying ain’t easy. First prices soar, then they slow down, but rising interest rates make up the difference.

Blanca Torres
Reporter- San Francisco Business Times

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The rapid rise of home prices may be slowing, but too bad interest rates are now creeping up.

In the Bay Area, home prices are still growing, but not as fast, according to Trulia, the San Francisco-based online real estate marketplace.

The firm found that while home prices jumped 17.2 percent in the month of July compared with July 2012, price growth slowed down during the last six months. From January to March, prices rose by 6.5 percent and from April to June, they went up 3 percent.

“The biggest price slowdowns have come to some of the hottest local markets,” said Jed Kolko, Trulia’s chief economist. “California and Nevada remain the Wild West for asking home prices, with some of the sharpest drops during the bust, strongest rebounds over the past year, and now biggest slowdowns in the past quarter.”

Nationwide, asking home prices dropped slightly— 0.3 percent — in July compared with the previous month. It’s the first time since November 2012 that prices didn’t go up.

They are still up 11 percent for the month of July compared with the same month last year.

One major factor deflating home prices is rising interest rates during the past six months.

In the past couple of years, historically low interest rates boosted sales and skyrocketing price growth, but higher rates are now dampening the mood.

“Asking home prices are now starting to lose steam as mortgage rates rise, inventory expands and investor demand declines,” said Trulia in a recent market report.

A year ago, a buyer could afford to pay a higher asking price because interest rates were low. Now, buyers may end up paying the same per month, but more of their payment will go toward interest versus the principal value on the loan.

So even if prices level off or go down in the months to come, buying a home in the Bay Area will still be just as costly if not more.

Blanca Torres covers East Bay real estate for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/08/bay-area-home-price-growth-leveling-off.html