Bay Area home prices keep climbing, but sales slow

Bay Area home buying slowed in June, as the busy summer home shopping season was chilled by scarce inventory and yet another month of near record-setting prices.

Median prices last month for existing homes in the nine-county region rose double digits over the previous year to $920,000, just short of the record high set in May, according to a report released Wednesday by real estate data firm CoreLogic.

Home sales dropped 9.2 percent from the previous year, suggesting many house-hunters are finally fed up or priced out of the Bay Area. The median re-sale price of single family homes in the region increased 12.1 percent from last June.

“It’s obviously a combination of affordability and inventory constraints,” CoreLogic analyst Andrew LePage said. “We’re seeing it statewide and nationally.”

Across the country, sales of existing U.S. homes dipped in June for the third straight month, according to a report released this week by the National Association of Realtors. Lawrence Yun, chief economist for the group, said a severe housing shortage is driving buyers out of the market.

Bay Area home sales last month dipped to the lowest level for a June in four years. San Francisco was the only Bay Area county to see an uptick in sales — and only by an additional 17 homes.

The Bay Area housing shortage has driven up home values, creating personal wealth for homeowners, while leaving renters and newcomers grasping to get into the market.

The streak of year-over-year sale price increases began in April 2012, when the median Bay Area home price was $425,000. But the days of half-million dollar homes have long passed, with seven-figure cash offers becoming the norm.

About 80 percent of homes sold last month topped $500,000. More than 4 in 10 Bay Area homes sold for more than $1 million.

The median sales price in June for single family homes in Alameda County was $947,750, according to CoreLogic. Prices rose to $1.32 million in Santa Clara County, $1.5 million in San Mateo County, $1.6 million in San Francisco, and $650,000 in Contra Costa County.

The surge was led by Santa Clara County, where home prices rose 19.9 percent compared to last June. Alameda County prices rose by 13.1 percent in the same period, while San Mateo jumped 14.5 percent, Contra Costa rose 9.1 percent, and San Francisco increased 14.8 percent.

Home sales historically increase from May to June, as families decide on purchases after the end of the school year. But Bay Area sales dropped 2.2 percent over the last two months.

Sales also slowed in Southern California, with Los Angeles purchases falling 1.1 percent over the previous month. The greater Los Angeles region saw nearly a 12 percent drop in transactions from last year, according to CoreLogic data.

LePage called the decrease in June home sales significant, adding that coming months may give a better picture of whether the super-charged market is slowing.  “It’s hard to say what comes next in terms of volume,” he said.

In the Bay Area, high prices are knocking some families out of the market, local brokers said. Rising interest rates have also slowed purchases.

Bill Moody, an agent with Referral Realty and president of the Silicon Valley Association of Realtors, said inventory has been growing this year, but still hasn’t returned to normal levels.

Santa Clara County properties near big tech companies remain popular, with strong sales in Sunnyvale, Mountain View and San Jose. “You can’t find a decent property for under a million bucks,” Moody said.

Mark Wong, an agent with Alain Pinel in Saratoga, said he sees fewer bids coming on properties, but prices have not dropped. “The market is looking for a direction,” Wong said.

Wong said buyers have started to bid up townhomes, where first-time buyers can get better value.

Henry Fan and his wife, Phoebe, looked at about 30 homes before winning a bid on a three-bedroom, two and a half bath townhome in San Jose for $1.11 million.

The young family told Wong they wanted space for their two boys, aged two and six months, to grow up. The rent on their two-bedroom apartment in Mountain View was going up to about $4,400 a month, and the couple decided it would make financial sense to buy their first home.

“We were a little bit worried,” said Fan, a 43-year-old engineer at Tesla. But the couple saw home prices continuing to rise, and they didn’t want to keep renting.

Their two-year old is excited about the community pool. “We are not going to sell it for the next 10 years,” Fan said. “At least.”