A hard-charging Bay Area housing market was stopped in its tracks last month with the steepest price drop in three decades.
The median price for single-family homes across the nine-county region fell 7 percent in June from the previous month, to $1.4 million from more than $1.5 million, the San Francisco Chronicle reported, citing data from the California Association of Realtors.
It was the largest price decline from May to June ever recorded in the association’s regional home sales data, which goes back to 1990.
Rising interest rates, lingering listings and a shaky economy all signal the Bay Area housing market may have peaked after prices hit all-time highs early this year, the association said.
“From this point on we probably won’t see another record price, at least for this year, for either the Bay Area or for the state,” Oscar Wei, deputy chief economist with the California Association of Realtors, told the Chronicle.
What’s normally a busy summer home-buying season has been offset by the significant price decline in June.
In the central Bay Area, Alameda County saw the largest monthly price drop of 8 percent to $1.42 million.
In San Francisco County, home prices fell 6 percent to $1.9 million, Santa Clara County prices declined 6 percent to $1.82 million, Contra Costa County prices had a 5 percent dip to $976,940 and San Mateo County prices dropped 3 percent to $2.16 million.
At the same time, Bay Area home prices were up 5 percent in June from a year ago. But some counties did see year-over-year drops, with San Mateo tumbling 5 percent, San Francisco dropping 3 percent and Contra Costa falling 1 percent.
Home values during the pandemic years soared as house hunters untethered from the office by remote work and buoyed by historic-low interest rates scrambled for homes, sometimes bidding hundreds of thousands of dollars over the asking price.
But as the Federal Reserve has raised the cost of borrowing this year in a bid to slow inflation, mortgage rates have spiked to 5.5 percent for both jumbo and conforming 30-year fixed home loans. That’s up from less than 3 percent at the bottom of the pandemic.
Some buyers have left the market during increased job layoffs, fears of a recession or falling investment values.
Bay Area home sales fell 27 percent in June year-over-year, the largest decline since pandemic lockdowns halted most home buying in spring of 2020, Wei said.
– Dana Bartholomew
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