In another sign that the Bay Area housing market is cooling, the number of homes for sale here has spiked — signaling more options for buyers, and potentially lower prices.
There were 43 percent more homes on the market last month in the San Jose metro area, which includes Santa Clara and San Benito counties, than there were in January 2018, according to a Zillow study released Thursday. Inventory increased by 25 percent in the San Francisco metro area, which includes San Francisco, San Mateo, Alameda, Contra Costa and Marin counties.
“There’s no doubt that the winds have shifted very rapidly in the Bay Area housing market,” said Zillow senior economist Aaron Terrazas.
Those spikes in inventory are good news for buyers who have been struggling to get offers accepted in a hyper-competitive, exorbitantly expensive market.And they mean sellers may need to reign in their expectations slightly when it comes time to set a price tag. But experts say the Bay Area real estate market still has a lot of cooling off to do before it could be considered affordable for a first-time home buyer, or before a home purchased years ago will cease to be a good investment.
Prices are still rising in the Bay Area, but more slowly. While median home values in the San Jose area shot up 25 percent year over year last spring, in January they inched up just 7 percent year over year, reaching $1.2 million. The median value for a San Francisco-area home was $957,400 in January — up from $910,500 a year ago.
There were 7,792 homes on the market in the San Francisco metro area last month, up from 6,233 the year before, according to Zillow. In the San Jose area, there were 3,011 homes for sale, up from 2,102 the year before. Both metro areas saw more homes for sale last month than they have at any other point since 2016. Inventory has been increasing for several months, and nearly doubled in October in the San Jose area.
“It’s easy to get a high percentage rise when you have a low number to start with,” said San Jose-based real estate agent Mike Gaines. “Our inventory still is terribly low.”
The San Jose area saw the largest percentage increase among the major metropolitan areas Zillow studied. Seattle was second, with a 37 percent increase. But while the jump was most pronounced in the country’s priciest markets, it’s a nation-wide trend.
Across the U.S. last month, the number of homes for sale increased 1 percent from the year before.
In San Jose, buyers are getting better deals than they were a year ago, Gaines said. Some homes are receiving offers for less than their asking prices. And sellers are being forced to think more carefully about a realistic price before they list their home.Part of the reason more homes have come on the market recently is that home owners increasingly are being tempted to sell, Gaines said. As their neighbors’ homes sell for hefty sums, they don’t want to miss their opportunity to cash out.
“We’ve got a lot of folks who want to get out of here,” he said. “They feel this year will be the best opportunity to get their home on the market, get it sold and move somewhere.”