Home sales show signs of slowing

Andrew LePage, analyst for CoreLogic, characterized the trends as a welcome development for those who have struggled for an extended period of time with affording buying a home.

“As we head into next year, if we see the current trend continue, then it’s likely that price appreciation would moderate,” he said.

Local sales data from the San Mateo County Association of Realtors agrees, as the county’s median sales price in September floated near $1.6 million, roughly at the level where it has sat all year.

CoreLogic, which draws from a different method for assessing sales data, suggests the area’s median sales price is closer to $1.5 million, while online housing website Zillow claims the median sales price is $1.3 million.

Regardless of the process for determining the exact median sales price, the outcome is largely the same — housing prices are not escalating at the same rate they have over recent years.

For perspective, the median sales price in September has grown by about $125,000 since at least 2015, when the median home sales price was floating around $1.2 million, according to SAMCAR data.

Expanding the scope to the entire Bay Area, LePage said the median home sales price in September dipped to $815,000, down 1.8 percent from the month prior and up 9 percent from September last year.

For the previous nine months, the year-over-year price gains averaged about 13 percent. So September’s growth was less significant than the market’s trend for most of the year, he said.

September also featured 5,970 home sales across the Bay Area, the fewest transactions in that month since 2007, when 5,014 homes were sold, according to CoreLogic. Last year, 7,358 sales occurred in September.

“The main takeaway for September data is that sales slowed very significantly,” LePage said.

He suggested shoppers are becoming more selective in their approach to buying homes, which could result in the decreased transaction rates and sales price stagnation.

“If this continues, buyers will have more to choose from and less urgency,” he said.

But he countered that perspective by noting that the market continues to be exceptionally expensive and starved for available stock.

“We would expect price appreciation to moderate. But however, at the moment, the market in a historical context is still tight,” he said.

The even bigger threat to home buyers though is mortgage rates, said LePage, as costs are increasing and making it even more difficult for those interested to enter the market.

“If mortgage rates continue to rise, that makes it tough because it makes it harder and harder to qualify,” he said, noting rates are up almost 1 percent this year. LePage was reticent to prognosticate whether the rate trends would continue over the coming year, noting the traditional volatility shown in the industry.

Mortgage rates aside though, LePage said the writing on the wall is encouraging for those who, for an extended period of time, may have felt that there is no hope that the market would turn. Time will tell whether those trends continue, he noted, while suggesting prices could be calming.

“It is certainly possible that price growth continues to weaken,” he said.

austin@smdailyjournal.com

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