San Jose Home Prices Fell 17% Year-Over-Year

Home prices are falling in the Bay Area and San Jose is leading the nation, according to a new Redfin report. Its Bay Area neighbors aren’t far behind.

The South Bay logged a 17 percent drop in median home prices in February, year over year. This marks the biggest price decline in the metro since Redfin began tracking that data in 2015. Prices were down 11 percent in San Francisco and Oakland, with Sacramento dropping nearly 9 percent, year-over-year. Austin was the only metro outside the greater Bay Area to break into the top five, with a 13 percent decline.

The Bay Area also had some of the biggest declines in new home listings, as the drop in prices led buyers to take their homes off the market or not bring them on at all. New listings fell by nearly 50 percent in Sacramento, year-over-year, and listings dropped more than 40 percent in San Francisco, Oakland and San Jose. Only Milwaukee had a bigger listings decline with a 65 percent decline, year-over-year.

The report said that mortgage starts were up this week as interest rates came down following the failures of Silicon Valley Bank and Signature Bank, as well as the rapid drop in value at First Republic. Renewed buyer enthusiasm could lead to a positive change in the overall U.S. market, where prices dipped 1.8 percent from a year ago, the biggest decline in at least a decade, according to Redfin.

But the report also said the recent financial news might “further spook buyers” in the areas closest to those distressed banks.

“Housing markets in the Bay Area and New York, home to the three regional banks that have tumbled over the last week–along with many tech workers who have either been laid off or are worried about being laid off–are already feeling the pain,” the report reads. “Redfin agents are reporting that some Bay Area buyers are pausing their search due to jitters around layoffs and banking troubles.”

“Some buyers are canceling their contracts or bowing out of their home search because they work in tech and they’re worried about losing their jobs,” said Bay Area Redfin manager Shelley Rocha in a statement. “The surge in tech layoffs was already causing jitters, and now the bank failures are adding to buyers’ nerves.”