The number of Greater Bay Area homes on the market over the past year has hit a two-decade low.
New listings in May throughout the 11-county region fell below 80,000 homes, the San Francisco Chronicle reported, citing figures from Compass.
That’s down from a pandemic high of more than 100,000 homes in mid-2021 and the all-time high of more than 180,000 in 2006.
The number of home sales, the lowest since the Great Recession in 2008 in a region that includes Santa Cruz and Monterey counties, fell last month to fewer than 60,000, according to the Chronicle.
The low number of new listings, calculated on a 12-month rolling basis, has helped drive up prices in the Bay Area, now among the highest in the nation, though less than during the pandemic boom, experts said.
The region’s median home price shot up 17 percent to $1.23 million between February and March, hitting $1.25 million in April, while buyers faced a shortage of homes for sale. The culprit: high interest rates, with potential sellers unwilling to trade up for pricey loans.
“In 2023 so far, increasing demand despite the much higher interest rates … has been confronted with severely depressed levels of new-listing activity, and this has put upward pressure on prices,” Patrick Carlisle, chief market analyst for Compass, told the Chronicle.
Driving the lack of listings is what realtors call the “mortgage lock-in effect.”
When mortgage rates are high, property owners with lower mortgage rates are loath to sell and take on a new mortgage unless they have to. Most homeowners across the U.S. have mortgage rates well below the current weekly average of 7 percent, according to Redfin.
There were 23 percent fewer new listings last month nationwide compared to May 2022, according to Zillow. April and March also saw year-over-year declines of more than 20 percent.
— Dana Bartholomew
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