following one of the most dramatic run-ups in recent years, according to a
report released Friday.
3.2 percent from a year ago, and were down 8.8 percent from July, according to
real estate information service DataQuick. While the median single-family price
of $588,000 extended several months of double-digit annual gains, it was 3.9
percent lower than it was in July, the first such drop in six months, DataQuick
Williams in Campbell. “The competitive market made it super-exhausting for
people,” he said. “They’re exhausted from looking for places,
school’s back in, and the market tends to slow down seasonally in the
Jim Kabel, a remodeling contractor in San Jose, might be a
poster child for the new market conditions. He started looking for a home
several months ago but lost out several times to higher bidders. Recently,
though, he snagged a townhouse in San Jose.
“Earlier in the season it was much busier with multiple
offers, and people were bidding higher than what I was offering,” Kabel
said. “Now it’s calmed down quite a bit. Places are staying on the market
longer, prices are dropping and there’s much less competition.”
That means shopping for a home is likely to be less of a
challenge in the coming months, said DataQuick’s Andrew LePage.
“Compared to the last four to five months, the evidence
is that it will be a pleasurable experience for home shoppers,” he said.
“There is more to choose from and prices aren’t leaping any more.”
That’s what Louis and Keelin Marcoux found after months of
getting beaten out by higher bidders for homes in Pleasanton. Louis Marcoux, an
executive with a Pleasanton medical electronics firm, said they lost out on
three houses, only to win the fourth time around in August.
“It was a blessing in disguise” to be beaten out
on the other homes, he said. “It is a better house, a better location, and
everything we were looking for. Prices started to cool down just a tiny bit by
the time we came to it. It’s definitely a little less competitive.”
The months-long trend of strong annual price gains is
expected to taper in the fall with fewer buyers, a greater selection of homes
to buy and rising mortgage rates.
“There’s not quite the frenzy there was before,”
said Lanny Baker, chief executive of Zip Realty. “Higher prices and higher
interest rates are causing that.”
In Alameda County, the median price for existing
single-family homes was $570,000, up 32.6 percent annually but unchanged from
July; in Contra Costa County, $435,000, up 39.4 percent annually but down 3.3
percent from July; in Santa Clara County, $744,500, up 24.1 percent from last
year but nearly unchanged from July, and in San Mateo County, $867,500, up 33.5
percent from last year and up 4.1 from July.
Real estate agents report increasing supplies of homes for
sale in some — but not all — parts of the Bay Area, giving buyers more
choices and more time to make a decision to buy. There are still multiple
offers and all-cash sales, but the number has dropped.
The new market conditions mean Sagar Pandey, a civil
engineer in Southern California, can take his time shopping for a home in San
Ramon. “I have a lot of family members up there and it’s time for me to
slow down a little bit,” he said.
Pandey plans to look around for at least two months to find
the right place. It’s taking longer to sell a home in Contra Costa County,
especially homes priced around $700,000 to $800,000, said Marilyn Cunningham of
Executive Brokers in Walnut Creek.
“We have seen a slowdown in our pending sales” in August,
she said, a change from six months ago when “in three days you had at
least several offers. There’s definitely been a shift in the market.”
Contra Costa County had price reductions, said Kevin Kieffer, a Danville real
estate agent. He said some sellers overshot the market and had to pull back.
“There’s more of a selection for buyers, and more of an opportunity to
come in at the asking price or even below it,” he said.
Even in Silicon Valley, where the number of homes for sale
has dropped since August, the frenzy has eased because there are fewer buyers,
said Carl San Miguel, president of the Santa Clara County Association of
Realtors. “The pressure is off at this point,” he said.
Caroline Miller, president of the Silicon Valley Association
of Realtors, said a home that sold last week for $730,000 after a $5,000 price
reduction fetched three offers. “Two months ago I would have had six or seven offers on
this little house in Campbell as opposed to three or four,” Miller said.
Condos, which made up about a fifth of all sales, are still
going strong, with sales at an eight-year high for the month of August. The
median price of a condo was $445,000, up 39 percent from a year ago.