More Signs That the Bay Area Real Estate Market Is Slowing

Back in June, we wrote that there were signs the San Francisco Bay Area real estate market is slowing down a bit. That’s good news for home buyers, many of whom have been frustrated by the hyper-competitive, fast-paced nature of the housing market.

Now, a recent report showed even more signs that the Bay Area real estate market might be slowing down in 2021. This report, published by the California Association of Realtors, showed a month-to-month decline in both home sales and prices across the San Francisco Bay Area.

The state as a whole also showed signs that it’s moderating. Statewide, sales and prices dipped slightly from June to July of this year.

Is the Bay Area Real Estate Market Slowing Down?

In August 2021, the California Association of Realtors (C.A.R.) published a housing market update with data for all of the state’s metro areas. Their report also included home sales and price data for the San Francisco-Oakland-Hayward metropolitan area, in particular.

According to that report, the Bay Area real estate market might be slowing down a bit in 2021, in terms of home sales and price growth. Both of those metrics decreased from June to July of this year.

The median sale price for existing single-family homes in the Bay Area declined by -3.6% from June to July. When measured annually, however, the median selling price was up by nearly +24% in July 2021.

Meanwhile, home sales in the area fell by -7.3% month over month. Sales were also down a bit when measured annually, posting a -1.4% decline year-over-year.

This could be viewed as a positive trend, given the overheated housing market conditions we’ve seen during the past year. A slight cool-down would be beneficial for home buyers and for the market in general.

But it’s not just the Bay Area real estate scene that seems to be slowing down a bit. Other cities and metros across the state are seeing similar trends, to varying degrees.

According to C.A.R. president Dave Walsh:

“The California housing market continues to normalize from the white-hot conditions we experienced at the height of the pandemic with both sales and prices moderating as we slowly transition from the peak home-buying season into the fall.”

He added that housing inventory remains tight across the state, and that homes are “flying off the market in record time.” So buyers should still be prepared for stiff competition.

A More ‘Buyer-Friendly’ Housing Scene

Buying a home in the San Francisco Bay Area can be challenging, especially at times when supply levels are running low. That has been the situation for the past 15 months or so. Tight supply conditions and strong demand have certainly made things challenging for buyers.

But there are signs that the Bay Area real estate market is slowing down and becoming a bit more “friendly” toward home buyers. According to Realtor.com’s chief economist Danielle Hale, a recent increase in new real estate listings nationwide is “shifting the housing market balance in a more buyer-friendly direction.”

As we wrote in a previous report, new real estate listings have increased in the Bay Area as well. This is true for many cities across the country. While inventory is still down year-over-year, the recent rise in new listings is a positive sign for buyers. If this trend continues going forward, it could make it easier to find and purchase a home in the Bay Area later in 2021 and in 2022.

An Ever-Evolving Situation

Despite these shifting conditions, we probably won’t see anything resembling a true “buyer’s market” for quite some time. The lopsided supply-and-demand situation, while improving a bit, will probably continue to favor sellers for the foreseeable future.

Even so, there is plenty of good news for Bay Area home buyers in 2021. If the local real estate market continues to slow down and cool off a bit, buyers might not have to work as hard to find a suitable property. They might encounter a bit less competition as well, which would be a refreshing change from the past 12 to 15 months.