The real estate market in the San Francisco Bay Area is in transition as property values react to changing economic and housing trends. Although the area cost of living remains high, housing is finally becoming more affordable.
Below is an in-depth look at how home prices went in 2022, as well as the most recent Bay Area housing market predictions.
Developments in the Bay Area Housing Market
Given a population of about eight million people, real estate prices and market trends might vary by city and county. However, there are numerous overlapping pricing trends that affect both buyers and sellers.
What precisely Is the Bay Area?
The San Francisco Bay Area is defined by the Association of Bay Area Governments as the following nine counties:
- Alameda
- Contra Costa
- Marin
- Napa
- San Francisco
- San Mateo
- Santa Clara
- Solano
- Sonoma
Prices are falling, but they remain high.
The value of homes in the Bay Area surged in the early months of 2022 and have since been going downward. However, inventory remains low, which keeps prices high and helps sellers.
According to CAR, the Bay Area sales price-to-list ratio in May 2023 was 102.6%. A reading above 100 indicates that customers paid more than the asking price. when a result, when inventory remains low, many in-demand properties continue to sell for more than the list price.
While homes remain historically costly, the typical existing home price in the Bay Area in May 2023 was $1.3 million. The whole area has decreased by 11.3% year on year.
Housing Availability Remains Limited
According to a survey from the California Association of REALTORS® (CAR), the Bay Area had 1.5 months of unsold inventory in May 2023, the lowest supply level statewide.
Furthermore, the median days on the market for house listings in the June CAR report is 13 days, which is much fewer than the national norm of 43 days. The median days on the market in the state is only 17 days, a 150% increase year over year. While most house listings in California sell quickly, the statewide increase indicates a decrease in buyer desire.
In addition, there are fewer sellers listing homes in 2023 than in 2022. According to CAR, active listings in May 2023 were down 27.5% year on year. Only 3,574 new listings were added in June, compared to 4,928 in May, 2022
Multiple variables are leading property prices in the Bay Area to fall. To begin, all nine counties have had population reductions since the epidemic began in 2020.
Specifically, a lot of homeowners who can work from home have relocated to more affordable and sparsely populated counties. It is possible to stay close to the wider San Francisco area while avoiding traffic and expensive living costs. In addition to fewer listings, CAR reported a 23.8% decrease in sales over the last year.
Graphs of Bay Area Housing Prices
