Just when it seemed Bay Area home prices couldn’t jump any higher, they soared to dizzying new heights in November — and in the process, set a new record.
The median price for a single-family home in the Bay Area last month was $825,000, up nearly 15 percent from the same time last year, according to new data from property analytics company CoreLogic.
That’s the most expensive since CoreLogic started keeping track in 1988, surpassing the last record of $823,000 set in June. (That data excludes sales of new homes, which make up a small fraction of the region’s housing inventory).
“For the clients that I’m working with that are buyers, it is stressful,” said Sunnyvale-based real estate agent Kevin Swartz. “It is sometimes, I would say, disheartening.”
Meanwhile, the number of available home keeps shrinking, intensifying competition and contributing to the vertigo-inducing prices. Homeowners in the Bay Area’s nine counties sold just 5,123 single-family houses in November, down 2 percent from the same time last year, according to CoreLogic.
Santa Clara County saw the most dramatic price increase last month, with the median price for an existing single-family home jumping nearly 26 percent year-over-year to $1.18 million — a record for the county.
Even areas where homes remain comparatively affordable saw major spikes. In Solano County, the median price of a single-family home increased 14.5 percent, to $402,000. In Contra Costa County, the median price spiked nearly 10 percent to $564,500. Alameda County also saw a major jump as the median price there reached $825,000, up nearly 11 percent from last year.
The relentless rise in prices is about more than just price appreciation. It also reflects a shaking up of the market, according to CoreLogic research analyst Andrew LePage. A greater share of Bay Area sales are happening in high-end neighborhoods, which is skewing the calculation of the region’s median prices.
“There just isn’t enough inventory in the lower price ranges,” he said.
In Santa Clara County, almost 77 percent of sales of existing single-family homes closed at $800,000 or more, up from 65 percent the year before, LePage said. At the other end of the spectrum, just 9 percent sold for less than $500,000.
Homes that cheap are a relic of the past, at least in Silicon Valley, Swartz said.
“There is nothing like that anymore,” he said.
Over the past month, Swartz also has noticed homes getting appraised for less — and in some cases, much less — than the price they sold for. That development is disturbing for buyers’ peace of mind, but it also can have a more troubling effect of pushing a property out of reach for a first-time home buyer. If a property appraises for much less than its contract price, a bank often won’t lend enough to make up the difference, leaving the potential buyer without the means to afford the down payment.
“It’s going to probably mean that those fringe buyers who can just barely qualify are going to have to take a step back from the market until it slows down again,” Swartz said.
It’s not clear when that might happen. For now, the years-long upward trajectory shows little indication of slowing.
The median price of new and existing Bay Area houses and condos has increased an average of 11.6 percent year over year for the past six months, according to CoreLogic.
November marks the 68th straight month of year-over-year price increases. But that stretch isn’t unprecedented: The Bay Area saw a 69-month streak in the late 90s that stretched into 2001.
Whether buyers see relief next year will depend on how much housing supply the Bay Area generates, LePage said. Just 723 new homes were sold in the region last month, compared to 5,123 older homes, which make up the bulk of the market. And the number of new homes sold dropped more than 14 percent from last year. In San Francisco, just 13 new homes sold last month, compared to 128 in November of last year.
“There just aren’t a lot of signs,” LePage said, “that it’s going to loosen much.”