Are Bay Area Housing Markets Getting the Jitters? June’s Median Price Growth Does Not Suggest So.

Executive Summary:

  • Bay Area home sales dropped by 13 percent year over year in June.
    • Sales in Sonoma and Napa counties slowed by more than 20 percent, while activity in San Francisco, Marin, and Alameda counties declined by about 10 percent.
    • Sales of homes priced at less than $1 million fell at the fastest rate seen in two years, down by 28 percent, driven by 50 percent drops in San Mateo and Santa Clara counties.
    • Sales of homes priced above $1 million continued to grow; however, June’s increase was the smallest seen in a year.
  • Inventory dropped by 2 percent, but the decline was the smallest seen over the last year.
    • Only San Francisco had lower inventory levels across all price ranges in June.
    • Inventory above $1 million increased in most other regions, with the largest gain in the inventory of homes priced higher than $2 million.
  • Absorption rates declined from 47 percent last June to 42 percent last month, driven by large drops in Silicon Valley.
    • However, June’s decline in Silicon Valley was down from last year’s high.
    • Absorption rates fell the most for homes priced below $1 million, suggesting affordability constraints.
  • The Bay Area’s median home price rose by 16 percent from June 2017, ranging from 9 percent growth in San Francisco to a 23 percent gain in Santa Clara County.