Bay Area home sales fall, but prices rise

Bay Area home sales fell and prices rose a bit in October, but overall it was a quiet month, new figures show. However, it was just before Donald Trump was elected president, and mortgage rates jumped half a percentage point.

Anecdotally, real estate agents say some buyers have exited the market since the election because their loan got too expensive, they became unsure of their immigration status or just got cold feet. But so far, no data suggest that the election is having an impact on the local real estate market.

The median price paid for all homes sold in the nine-county Bay Area in October was $675,000, according to a CoreLogic report released Wednesday. That was up 3.8 percent from the previous month and up 6.1 percent year over year. The data include new and existing homes and condos that closed in October.

Year over year, the median price has risen for 55 consecutive months — since April 2012, CoreLogic said. October’s median, however, was 4.9 percent below the Bay Area’s all-time high of $710,000 set in June.

The number of Bay Area homes sold in October fell to 7,505, down 5.4 percent from the previous month and down 1.5 percent year over year. October sales were the lowest in five years and about 11 percent below the historical average for October.

Median prices can go up because of appreciation, a shift in the mix of homes sold toward higher-priced ones, or some combination thereof. In October, there was a definite shift to high-end homes in most parts of the Bay Area, said CoreLogic research analyst Andrew LePage.

This was especially true in San Francisco, where the median price jumped almost 20 percent since September to $1,225,000 in October. The city’s all-time high was $1.3 million, set in April.

Paragon Real Estate Group noted in an earlier report that a record number of single-family homes priced at $3 million and above hit the San Francisco Multiple Listing Service in September, which led to a surge in luxury home sales in October. Paragon’s data exclude most new construction.

CoreLogic, which includes new construction, said that 39 San Francisco homes and condos sold for $3 million or more in October. “That was the highest on record for any month,” LePage said.

It’s too soon to say what, if any, impact the election and rising interest rates are having on the market, because it typically takes a month or more for deals to close and get recorded with the county.

The average rate on a 30-year fixed-rate loan has risen to 4.13 percent, up from 3.62 percent on election day and a low of 3.34 percent in July, according to Mortgage News Daily. However, a year ago the rate was 4.05 percent, not much lower than today.

Zach Griffin, a loan adviser with LaSalle Mortgage Services in Oakland’s Montclair neighborhood, said he has not had any loans fall through since the election. “I don’t know that rates have moved enough to change the affordability (for buyers). It has gotten some people off the fence, saying we better move now before rates go any higher.”

Dave Walsh, a branch manager with Alain Pinel Realtors in San Jose, said an agent in his office had one potential deal “go south” because of rising rates. The agent represented a buyer who was interested in a Los Gatos home listed at $1,268,000 that had been on the market more than 60 days.

“Our buyer offered $1,180,000 because that was all he could qualify for,” and it was nearer to fair market value, Walsh said. The buyer was willing to go up to $1,198,000, but the seller would not go below $1.2 million. “After three weeks of negotiations, the seller said no,” Walsh said.

However, the house remained unsold, and this week the seller’s agent asked if the buyer would resubmit his original offer of $1,180,000. But interest rates had risen a half point and the buyer could no longer qualify for the financing. “It should have come together, it didn’t come together, and now it can’t come together,” he said.

Jeanne Garde, co-owner and managing broker of Today Sotheby’s International Realty in San Carlos, said in an email: “We have not had any deals fall out because of interest rates. However, we have had one deal collapse because the buyer was unsure of what his immigration status might be in the future.” Her office also had a few buyers back out of the market because they were not sure what would happen to home prices after the election.

“We are starting to see sellers who will have substantial capital gains looking to close in 2017 hoping that the tax laws will be adjusted in their favor,” Garde added.

It’s impossible to tally how many deals have fallen through since the election, but there does not seem to be any increase in the number of listings that have been pulled off the market without selling.

MLSListings, which handles multiple listing services for the Peninsula and South Bay counties, said a total of 619 listings have been canceled, withdrawn or fallen through since the election. That compares with 685 in the same period last year. However, the number of new listings has also fallen since the election, to 687 versus 987 in the same period last year.

Other listing services show similar results. In San Francisco, 83 listings were withdrawn from the MLS since the election, compared with 102 last year. Likewise, only 234 new listings have hit the market since the election, down from 285 last year.

This time last year, the market was so hot that some people might have put their homes on the market just to see what they could get. Today, agents “are telling clients to be a little more cautious. Make sure you have your price right,” said Jay Cheng, a spokesman for the San Francisco Association of Realtors. People who list their homes “are convinced they really want to sell.” That makes for fewer listings, and fewer withdrawals.

In Alameda and Contra Costa counties, 194 listings have been canceled since the election, compared with 222 the same time last year. A total of 1,080 homes and condos were added to the market since the election, roughly equal to the 1,040 in the period last year, according to the Bay East Association of Realtors.