During the first half of the year, single-family home and condominium sales dropped 10.3% from the same period last year, bringing home sales to their lowest point since 2008, according to an article by Madeline Schnapp for PropertyRadar.
Make no mistake, this decrease in sales is not hindering home prices from soaring upwards, the article points out.
From the article:
“It’s no surprise that sales have slowed in the Bay Area. Median home prices in the Marin to Santa Clara corridor top $1 million. San Mateo County hit a confounding $1.26 million in June 2016,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “Prices continue to rise but have definitely slowed from the double digit increases of 2013 and 2014. The decline in sales suggests that prices may soon top, perhaps as early as next year.”
In fact, housing in some parts of California has grown so expensive that one housing official and her software engineer husband can no longer afford to live in there.
A report from the California Association of realtors shows that about two-thirds of Californians can’t afford to buy a home.
While the slowdown may be concerning, the author points out that the market is still different from the 2006 housing bubble.
From the article:
“The slowdown in Bay Area sales has given rise to the concern that we are in the midst of another real estate bubble getting ready to pop,” said Schnapp. “This time around, the factors that contributed to the 2006 real estate bubble are largely absent. Factors such as large numbers of poor quality borrowers, easy availability of high-risk adjustable rate mortgages with 100 percent financing and a Federal Reserve that was raising interest rates, are not in play today.”