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Is the Bay Area real estate market cooling?

A Chronicle analysis of Redfin data finds that sales have slowed in recent months, returning closer to what has served as “normal” in past years.

One Realtor told us that houses that would’ve ordinarily drawn more than 20 offers are now getting just three. Price drops are becoming more common among listings, and homes are selling closer to their asking price.

With the prospect of a recession, potential buyers likely are growing increasingly hesitant to put down the cash for a home right now.

Read more from Kellie Hwang.

• San Francisco housing development is slow and showing no signs of speeding up. The city is currently on pace to see fewer than 3,000 new homes this year.

Bear market

The recent ups and downs of the stock market have Bay Area workers worried about the fate of their retirement plans.

The top-trending local query on Google during one recent week was, “What to do with 401(k) during recession.” That same week, Bay Area searches for “Should I stop contributing to my 401(k)” quadrupled.

Don’t do anything rash, financial experts said.

But if you’re itching to do something, consider putting more money into your retirement fund as index fund prices drop.

Read more from Carolyn Said.

What to eat

Lovers of the McDonald’s Egg McMuffin will want to ditch the Golden Arches after trying Hash N Dash, a South Bay pop-up. Chronicle associate food critic Cesar Hernandez describes it as if a “McMuffin and Oklahoma City-style fried onion burger had an affair in San Jose.” If that hasn’t sold you, maybe the promise of crispy sausage or smoky pork belly will.

In the East Bay, a vintner is turning traditional wine on its head. At Free Range Flower Winery, winemaker Aaliyah Nitoto has swapped grapes out for California-grown flowers like lavender, marigold, hibiscus and rose. The result tastes nothing like soap or essential oils, but don’t expect it to taste like your traditional Chardonnay.

Around the Bay

• State water woes: Who wins and who loses in California’s water crisis? We analyzed the data to see where water is heading as contractors request supplies.

• Train tragedy: Officials released the names of three people who were killed in a weekend Amtrak crash in Contra Costa County.

• Homelessness crisis: San Francisco’s nighttime sweeps of homeless encampments in the Mission District are rankling local Latino advocates. They’re proposing a pilot program called El Proyecto Dignidad to connect them with more resources.

• Crime news: An on-duty San Francisco police officer was booked on suspicion of theft, fraud and forgery, the fourth active or retired officer arrested this year.

• By the line: A constitutional law professor dissected the Roe v. Wade opinion. Here’s what you need to know.

• Food or friend? A dramatic underwater photo from the Monterey Bay Aquarium shows starfish eating a dead sea lion.

• NextSF: What if we could stop people from becoming homeless before they lose their housing?

• Stars and stripes: If you’re looking for a place to celebrate the Fourth of July, Datebook has a running list of block parties, festivals and official fireworks displays.

Cha-ching

That’s the sound of direct deposits and debit cards landing in the hands of most Californians.

Under a budget deal announced by Gov. Gavin Newsom and state officials, inflation relief is heading to residents, with stimulus payments ranging from $200 to $350 per person.

The catch? These payments will not start until October, and legislators said it’s likely the rollout will continue into early 2023.

Read more from Sophia Bollag.

Bay Briefing is written by Gwendolyn Wu (she/her) and sent to readers’ email inboxes on weekday mornings. Sign up for the newsletter here, and contact the writer at gwendolyn.wu@sfchronicle.com.

“In general I would characterize the Bay Area as a cooling market alongside a lot of other markets that are also cooling,” said Redfin deputy chief economist Taylor Marr. “We’re seeing the entire country’s housing market react to interest rates.”

Sheila Cunha, president of the Bay East Association of Realtors, said she’s seen a slowdown for the last month. She just put a home in San Leandro on the market and didn’t receive any preemptive offers, which would not have been the case just a few months ago.

“I hate to use the words ‘normal market,’ but I’ve been doing this for over 20 years and been through all of the markets, and this is becoming a more normalized market,” she said. “I’ve been sitting in on so many meetings lately where people say they didn’t get 20 offers, they only got three.”

We examined three key metrics to show where the Bay Area and California housing markets stand.

Home sales are declining

One of the most obvious signs of a real estate slowdown is a decline in the number of home sales.

Redfin data shows home sales stayed high and relatively steady for most of 2021, when the market was hot and rates were low.

At the start of 2022, there was a decline in sales, which appeared to be seasonal, then a return to growth. That momentum slowed in March; then, home sales began to decline in mid-April and are now down 19% year-over-year for the period from May 23 to June 19.

Countywide data shows the number of homes sold in San Francisco started to drop off in mid-April, and the year-over-year decline was 25% from mid-May to mid-June. There are similar patterns in other Bay Area counties, with home sales falling 22% year-over-year in Alameda County, and declining 23% in Contra Costa. Santa Clara County saw even larger declines of 26%.

Price drops are becoming more common

Redfin data shows that in the San Francisco metro area, which also includes San Mateo County, the percentage of active listings with price drops was at just 1% at the start of the year, and has gradually increased since, with a sharp ascent at the beginning of April. It’s now over 4% for the period from mid-May to mid-June.

“There are close to 1 in 5 homes in the region that are dropping their prices, and it’s a little bit higher in San Jose,” Marr said.

Homes are selling for closer to their asking price

This sale-to-list-ratio looks at what homes are selling for versus their list prices — a ratio over 1 indicates a hot market with lots of competitive bidding.

The sale-to-list ratio in the San Francisco metro area rose to the highest it’s been in the past several years in late March, peaking at 1.13. It has since decreased to 1.1. During the same period in 2021, it was 1.09, while in 2019 the ratio was 1.07.

“It’s definitely cooling down quickly,” Marr said, but noted that this is a lagging metric, and we have “yet to see how much demand has dropped off from Bay Area sales.”

He said that since rates have risen, it reduces the purchasing power of buyers and he expects the ratio to “continue to dive and it may even fall below 1 at the end of year, given how much mortgage payments have risen.”

Homebuyer demand

Redfin’s seasonally-adjusted Homebuyer Demand Index looks at data points including home tour requests and other home-buying services, and as of June 19 the index showed a 16% year-over-year decline nationwide.

Data from the Mortgage Bankers Association shows both a monthly and annual decline in mortgage applications in California. Purchase applications are down 11.9% from April to May, and 26.8% year-over-year, while refinance applications have decreased 25.3% from April to May, and 83.5% year-over-year. The agency does not have more localized data.

Wei said another sign that indicates a slowdown is that properties are staying on the market longer, which suggests a decrease in competition. According to data from the California Association of Realtors, San Francisco’s median days-on-market for May is 12 days, which is a 9% year-over-year increase.

“There are not as many multiple offers on the market, which suggests the market is not as hot as before,” Wei said.

Data from ShowingTime, which tracks real estate showings across the country, shows that the seven-day moving average declined 47% from the start of 2022 in California.

What comes next?

Renee White, a broker associate with Keller Williams who is based out of Walnut Creek, said that if a Bay Area home has the quality and is priced right, there will always be competition, particularly because of the lack of inventory. While she’s still seeing offers come in on listed homes, she believes we’re currently in a “flat market.”

“We might have to ignore the gains we had this year; those people were lottery winners,” she said, adding that “now is the time to buy when everybody else isn’t buying.”

Marr said the first signs of cooling have been more pronounced in expensive coastal markets because they tend to be more sensitive to higher rates and worsening financial market conditions.

The housing market first started to show signs of moderation in expensive coastal cities as early as February with fewer offers and mortgage applications, a decline in touring activity and more price drops on active listings, Marr said.

Nationally, real estate companies including Compass and Redfin have recently announced layoffs, and some average monthly mortgage payments in the Bay Area are more than 50% higher than they were a year ago. According to Redfin, searches for “homes for sale” on Google for the week ending on June 18 were down 14% from a year ago.

Oscar Wei, deputy chief economist for the California Association of Realtors, said, “Just like across the nation, California as well as the Bay Area is seeing some slowdown in terms of sales,” which is “not exactly a surprise.” Like Marr, he also said that buyers in the Bay Area are probably more sensitive to financial market activity.

“We anticipate a continued slowdown in the coming month and probably into the second half of 2022,” Wei said. “In the coming months we’ll see more increases in interest rates. One of the reasons why we’re seeing the impact is the cost of borrowing. … This impacts people’s desire to buy a home.”

Wei said the prospect of a recession brings uncertainty to the economy and the housing market, so potential buyers will probably hold off for a bit.

• Real Estate: Track home prices in every Bay Area city and ZIP code

“In general I would characterize the Bay Area as a cooling market alongside a lot of other markets that are also cooling,” said Redfin deputy chief economist Taylor Marr. “We’re seeing the entire country’s housing market react to interest rates.”

Sheila Cunha, president of Bay East Association of Realtors, said she’s seen a slowdown for the last month. She just put a home in San Leandro on the market and didn’t receive any preemptive offers, which would not have been the case just a few months ago.

“I hate to use the words ‘normal market,’ but I’ve been doing this for over 20 years and been through all of the markets, and this is becoming a more normalized market,” she said. “I’ve been sitting in on so many meetings lately where people say they didn’t get 20 offers, they only got three.”

We examined three key metrics to show where the Bay Area and California housing market stands.

Home sales are declining

One of the most obvious signs of a real estate slowdown is a decline in the number of home sales.

Redfin data shows home sales stayed high and relatively steady for most of 2021, when the market was hot and rates were low.

At the start of 2022, there was a decline in sales, which appeared to be seasonal, then a return to growth. That momentum slowed in March; then, home sales began to decline in mid-April and are now down 19% year-over-year for the period from May 23 to June 19.

Countywide data shows the number of homes sold in San Francisco started to drop off in mid-April, and the year-over-year decline was 25% from mid-May to mid-June. There are similar patterns in other Bay Area counties, with home sales falling 22% year-over-year in Alameda County, and declining 23% in Contra Costa. Santa Clara County saw even larger declines of 26%.

Price drops are becoming more common

Redfin data shows that in the San Francisco metro, which also includes San Mateo County, the percent of active listings with price drops was at just 1% at the start of the year, and has gradually increased since, with a sharp ascent at the beginning of April. It’s now over 4% for the period from mid-May to mid-June.

“There are close to one-in-five homes in the region that are dropping their prices, and it’s a little bit higher in San Jose,” Marr said.

Homes are selling for closer to their asking price

This sale-to-list-ratio looks at what homes are selling for versus their list prices – a high ratio over 1 indicates a hot market with lots of competitive bidding.

The sale-to-list ratio in the San Francisco metro rose to the highest it’s been in the past several years in late March, peaking at 1.13. It has since decreased to 1.1. During the same period in 2021, it was 1.09, while in 2019 the ratio was 1.07.

“It’s definitely cooling down quickly,” Marr said, but noted that this is a lagging metric, and we have still “yet to see how much demand has dropped off from Bay Area sales.”

He said that since rates have risen, it reduces the purchasing power of buyers and he expects the ratio to “continue to dive and it may even fall below 1 at the end of year, given how much mortgage payments have risen.”

Homebuyer demand

Redfin’s seasonally-adjusted Homebuyer Demand Index looks at data points including home tour requests and other home-buying services, and as of June 19 the index showed a 16% year-over-year decline nationwide.

Data from the Mortgage Bankers Association shows both a monthly and annual decline in mortgage applications in California. Purchase applications are down 11.9% from April to May, and 26.8% year-over-year, while refinance applications have decreased 25.3% from April to May, and 83.5% year-over-year. The agency does not have more localized data.

Wei said other signs that suggest a slowdown are properties are staying on the market longer and days-on-market are a little bit higher, which suggests a decrease in competition. According to data from the California Association of Realtors, San Francisco’s median days-on-market for May is 12 days, which is a 9% year-over-year increase.

“There are not as many multiple offers on the market, which suggests the market is not as hot as before,” Wei said.

Data from ShowingTime, which tracks real estate showings across the country, shows that the seven-day moving average declined 47% from the start of 2022 in California.

What comes next?

Renee White, a broker associate with Keller Williams who is based out of Walnut Creek, said in the Bay Area if a home has the quality and is priced right, there will always be competition, particularly because of the lack of inventory. While she’s still seeing offers come in on listed homes, she believes we’re currently in a “flat market.”

“We might have to ignore the gains we had this year; those people were lottery winners,” she said, adding that “now is the time to buy when everybody else isn’t buying.”

Marr said the first signs of cooling have been more pronounced in expensive coastal markets because they tend to be more sensitive to higher rates and worsening financial market conditions.

The housing market first started to show signs of moderation in expensive coastal cities as early as February with fewer offers and mortgage applications, a decline in touring activity and more price drops on active listings, Marr said.

Nationally, real estate companies including Compass and Redfin have recently announced layoffs, and average monthly mortgage payments in the Bay Area are more than 50% higher than they were a year ago. According to Redfin, searches for “homes for sale” on Google for the week ending on June 18 declined 14% from a year ago.

Oscar Wei, deputy chief economist for the California Association of Realtors, said that “just like across the nation, California as well as the Bay Area is seeing some slowdown in terms of sales,” which is “not exactly a surprise.” Like Marr, he also said that buyers in the Bay Area are probably more sensitive to financial market activity.

“We anticipate a continued slowdown in the coming month and probably into the second half of 2022,” Wei said. “In the coming months we’ll see more increases in interest rates. One of the reasons why we’re seeing the impact is the cost of borrowing… This impacts people’s desire to buy a home.”

Wei said the prospect of a recession brings uncertainty to the economy and the housing market, so potential buyers will probably hold off for a bit.

Kellie Hwang is a San Francisco Chronicle staff writer. Email: kellie.hwang@sfchronicle.com

• Real Estate: Track home prices in every Bay Area city and ZIP code

“In general I would characterize the Bay Area as a cooling market alongside a lot of other markets that are also cooling,” said Redfin deputy chief economist Taylor Marr. “We’re seeing the entire country’s housing market react to interest rates.”

Sheila Cunha, president of Bay East Association of Realtors, said she’s seen a slowdown for the last month. She just put a home in San Leandro on the market and didn’t receive any preemptive offers, which would not have been the case just a few months ago.

“I hate to use the words ‘normal market,’ but I’ve been doing this for over 20 years and been through all of the markets, and this is becoming a more normalized market,” she said. “I’ve been sitting in on so many meetings lately where people say they didn’t get 20 offers, they only got three.”

We examined three key metrics to show where the Bay Area and California housing market stands.

Home sales are declining

One of the most obvious signs of a real estate slowdown is a decline in the number of home sales.

Redfin data shows home sales stayed high and relatively steady for most of 2021, when the market was hot and rates were low.

At the start of 2022, there was a decline in sales, which appeared to be seasonal, then a return to growth. That momentum slowed in March; then, home sales began to decline in mid-April and are now down 19% year-over-year for the period from May 23 to June 19.

Countywide data shows the number of homes sold in San Francisco started to drop off in mid-April, and the year-over-year decline was 25% from mid-May to mid-June. There are similar patterns in other Bay Area counties, with home sales falling 22% year-over-year in Alameda County, and declining 23% in Contra Costa. Santa Clara County saw even larger declines of 26%.

Price drops are becoming more common

Redfin data shows that in the San Francisco metro, which also includes San Mateo County, the percent of active listings with price drops was at just 1% at the start of the year, and has gradually increased since, with a sharp ascent at the beginning of April. It’s now over 4% for the period from mid-May to mid-June.

“There are close to one-in-five homes in the region that are dropping their prices, and it’s a little bit higher in San Jose,” Marr said.

Homes are selling for closer to their asking price

This sale-to-list-ratio looks at what homes are selling for versus their list prices – a high ratio over 1 indicates a hot market with lots of competitive bidding.

The sale-to-list ratio in the San Francisco metro rose to the highest it’s been in the past several years in late March, peaking at 1.13. It has since decreased to 1.1. During the same period in 2021, it was 1.09, while in 2019 the ratio was 1.07.

“It’s definitely cooling down quickly,” Marr said, but noted that this is a lagging metric, and we have still “yet to see how much demand has dropped off from Bay Area sales.”

He said that since rates have risen, it reduces the purchasing power of buyers and he expects the ratio to “continue to dive and it may even fall below 1 at the end of year, given how much mortgage payments have risen.”

Homebuyer demand

Redfin’s seasonally-adjusted Homebuyer Demand Index looks at data points including home tour requests and other home-buying services, and as of June 19 the index showed a 16% year-over-year decline nationwide.

Data from the Mortgage Bankers Association shows both a monthly and annual decline in mortgage applications in California. Purchase applications are down 11.9% from April to May, and 26.8% year-over-year, while refinance applications have decreased 25.3% from April to May, and 83.5% year-over-year. The agency does not have more localized data.

Wei said other signs that suggest a slowdown are properties are staying on the market longer and days-on-market are a little bit higher, which suggests a decrease in competition. According to data from the California Association of Realtors, San Francisco’s median days-on-market for May is 12 days, which is a 9% year-over-year increase.

“There are not as many multiple offers on the market, which suggests the market is not as hot as before,” Wei said.

Data from ShowingTime, which tracks real estate showings across the country, shows that the seven-day moving average declined 47% from the start of 2022 in California.

What comes next?

Renee White, a broker associate with Keller Williams who is based out of Walnut Creek, said in the Bay Area if a home has the quality and is priced right, there will always be competition, particularly because of the lack of inventory. While she’s still seeing offers come in on listed homes, she believes we’re currently in a “flat market.”

“We might have to ignore the gains we had this year; those people were lottery winners,” she said, adding that “now is the time to buy when everybody else isn’t buying.”

Marr said the first signs of cooling have been more pronounced in expensive coastal markets because they tend to be more sensitive to higher rates and worsening financial market conditions.

The housing market first started to show signs of moderation in expensive coastal cities as early as February with fewer offers and mortgage applications, a decline in touring activity and more price drops on active listings, Marr said.

Nationally, real estate companies including Compass and Redfin have recently announced layoffs, and average monthly mortgage payments in the Bay Area are more than 50% higher than they were a year ago. According to Redfin, searches for “homes for sale” on Google for the week ending on June 18 declined 14% from a year ago.

Oscar Wei, deputy chief economist for the California Association of Realtors, said that “just like across the nation, California as well as the Bay Area is seeing some slowdown in terms of sales,” which is “not exactly a surprise.” Like Marr, he also said that buyers in the Bay Area are probably more sensitive to financial market activity.

“We anticipate a continued slowdown in the coming month and probably into the second half of 2022,” Wei said. “In the coming months we’ll see more increases in interest rates. One of the reasons why we’re seeing the impact is the cost of borrowing… This impacts people’s desire to buy a home.”

Wei said the prospect of a recession brings uncertainty to the economy and the housing market, so potential buyers will probably hold off for a bit.

Kellie Hwang is a San Francisco Chronicle staff writer. Email: kellie.hwang@sfchronicle.com

When Chevron vacates the 100-acre campus in 2023, freeing up prime real estate for the area’s growing life-sciences industry or developers looking to build apartments, it hopes to move into a smaller space in San Ramon, which will remain its headquarters, the Wall Street Journal said.  

There are deep roots in California for Chevron going back to the late 1800s. While company leadership has pushed for a permanent move to Texas in the past, the oil company’s legacy in the state coupled with the location of its Richmond refinery in the East Bay has kept the company in California, sources told the Wall Street Journal. 

“The current real estate market provides the opportunity to right-size our office space to meet the requirements of our headquarters-based employee population,” a spokesperson told SFGATE. “The move is expected to occur during the third quarter of 2023. Chevron will remain headquartered in California, where the company has a 140-year history and operations and partnerships throughout the state.”