An eight-month drop in Bay Area home prices has hit the skids, with prices in Wine Country now on the upswing.
The decline in each of the Bay Area’s nine counties has begun to soften, while Sonoma and Napa counties saw growth in March, the San Francisco Chronicle reported, citing figures from Zillow.
While home values in the 100 biggest Bay Area cities or Census-defined locales are lower than they were both a year ago and six months ago, drops from month to month are starting to shrink – with some rebounding.
Experts say the trend is a sign of recovery, with the market poised to heat back up by early summer.
“Monthly paces of price declines have really slowed down,” Zillow Senior Economist Jeff Tucker told the Chronicle. “We may very well be in the midst of a turnaround.”
In the first growth for any Bay Area county since last June, home values in Sonoma between Feb. 28 and March 31 rose by 0.2 percent. At the same time, values in Napa inched up 0.1 percent.
Prices in San Francisco and Solano counties each fell by 0.1 percent. That compares to San Francisco’s 1.6 percent average decrease per month over the previous eight months, and Solano’s 0.7 percent decline per month over the same period.
In Sonoma County, the cities of Healdsburg, Sebastopol, Sonoma, Cotati and Cloverdale each saw a rise of less than 1 percent in March, as did American Canyon in Napa County.
The municipal increases weren’t limited to Wine Country. Walnut Creek in Contra Costa County and San Bruno in San Mateo County also saw home values creep up in March.
The spring and early summer months of April, May and June are the busiest in home sales, which means that the real estate market may start to heat back up, according to the Chronicle. A Zillow forecast last month predicted home values in San Francisco metro areas would likely fall 2.7 percent in the next year overall.
“Conditions have improved considerably” in the Bay Area, Compass said in its April 2023 real estate report.
Though the market “remains significantly weaker on a year-over-year basis,” the Compass report stated, “it’s worth remembering that the market (at the beginning of 2022) was severely overheated, approaching the peak of a historic, 10-year boom.”
The reason parts of Wine Country might see a faster recovery comes down to demand from people looking to move for reasons other than just employment, whereas urban centers rely more on people moving for a job, Tucker said.
Homes around the Bay Area are starting to see more bids and spending less time on the market. Competition is beginning to come back.
“If a home shopper goes out there and is expecting the conditions they heard about on the news last winter or if they’re really focused on year-over-year price changes, and they think every seller will be happy to see them, they’re in for a rude awakening,” Tucker said.
— Dana Bartholomew
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