Report: Bay Area Home Sales Slowing Down in Fall of 2021

After many months of frenzied home-buying activity, the Bay Area real estate market seems to be cooling down a bit. A new report published today showed that Bay Area home sales slowed down last month, and also when measured year-over-year.

This could be a seasonal blip on the radar, or the start of a sustained cooling trend. Only time will tell. But despite any slowdown in home sales, the Bay Area real estate market remains highly competitive in 2021. That will probably be the case in 2022 as well.

Bay Area Home Sales Slow Down in Fall 2021

Earlier today, the California Association of REALTORS® (C.A.R.) published an updated housing market report with data through the end of September 2021. Among other things, this latest C.A.R. report showed an increase in home sales across the state of California.

To quote that report:

September’s sales pace was up 5.6 percent on a monthly basis from 414,860 in August and down 10.5 percent from a year ago, when 489,590 homes were sold on an annualized basis. The month-to-month increase was the largest since August 2020...

The stats mentioned above pertain to the state of California as a whole. Here in the San Francisco Bay Area, home sales actually slowed down in September (compared to August). Sales activity in our region has also declined when measured year over year.

According to this C.A.R. report, sales of existing single-family homes in the Bay Area region declined by -6.8% from August to September of 2021. Annually, sales activity was down by -7% compared to September of last year.

The statewide increase in sales activity can be attributed to the many cities across the state where purchasing activity rose last month. It was sort of a mixed bag this time around. Home sales in some California cities rose measurably from August to September of this year, while they declined in other cities and metros.

This underscores an important point that buyers should bear in mind. Real estate conditions can vary greatly from one local housing market to the next.

Meanwhile, Prices Continue to Rise

While home sales in the Bay Area might have slowed down a bit, house prices continue to climb. This is largely due to the ongoing supply shortage, which is forcing buyers to compete for scant inventory.

According to the October C.A.R. report, the median sale price for existing single-family homes in the Bay Area rose by 2% from August to September. When measured annually, prices rose by a whopping 21.7% in September 2021 (compared to a year earlier).

As the authors stated:

Median prices in all of the major regions continued to grow on a year-over-year basis, with three of them increasing by double-digits in September. The San Francisco Bay Area had the largest jump (21.7 percent) of all regions…

A slowdown in home sales across the San Francisco Bay Area is good news for buyers. It means that the real estate market might be a bit less hectic over the coming months, and possibly into 2022.

But the steady rise of house values shows that there is still plenty of demand in our market. Additionally, for-sale housing inventory continues to hover at historically low levels. So generally speaking, the market still favors sellers.

What Will the Housing Market Look Like in 2022?

To recap: Bay Area home sales have slowed during the fall of 2021, though prices continue to climb. And tight inventory conditions continue to frustrate buyers in many local housing markets.

But what about next year? What’s the forecast for the Bay Area real estate scene over the long term?

As we wrote in a recent blog post, C.A.R.’s research team recently predicted we could see an additional slowdown in California home sales next year. They expect the overall sales pace to be lower in 2022, when compared to 2021.

The rate of home-price appreciation could also slow down over the coming months. That seems to be the general consensus among forecasters. But we probably won’t see Bay Area prices drop significantly any time soon. The lopsided supply-and-demand situation mentioned earlier will probably keep house values rising — to some degree — for the foreseeable future.

Need Mortgage Financing in the Bay Area?

Bridgepoint Funding is your local mortgage specialist. We are located in the San Francisco Bay Area and have served the region for going on 20 years. We offer a full range of home loan options, including FHA, VA and conventional loans.

Please contact us if you need mortgage financing in the Bay Area!