Home sales across the Bay Area have plunged — and prices have risen — because few properties are available to buy.
A lack of inventory has pushed up prices for a second month in a row, with the year-over-year price of a typical Bay Area home rising 6.6 percent in September to $1.3 million, the San Jose Mercury News reported, citing data from the California Association of Realtors.
“We have an extreme lack of inventory here, and I don’t see that changing anytime soon,” Jim Hamilton, president of the Silicon Valley Association of Realtors and an agent with Compass in Los Gatos, told the newspaper.
The tight housing supply in the nine-county region comes as mortgage rates hit their highest level in 23 years, discouraging would-be sellers from trading up their homes. The rate for an average 30-year-fixed mortgage last week was 7.6 percent, according to Freddie Mac.
That has led to screeching home sales, with Bay Area deals falling 23.7 percent from last September. But buyers are still ready to get into a new home.
Last month, the average Bay Area home spent 14 days on the market, compared to 26 days a year ago.
Buyers appear eager to pay the high interest rates, gambling that it’s worth getting a beachhead in the market now, with a chance to refinance if rates fall. Some aim to jump in now because of a perceived lack of competition.
“We haven’t really seen the buyers backing off because of that higher interest rate,” Hamilton told the Mercury News. “We’re still seeing multiple offers on homes.”
Some buyers say the relatively cooler market is preferable to the feeding frenzy they expect will follow a drop in rates.
But as home costs rise, buyers’ choices are dwindling.
“There’s just nothing,” Melody Hultgren, founding partner of Nova Real Estate, which focuses on properties in San Francisco and the East Bay, told the Mercury News. “It’s not a total buyer’s market — it’s kind of the opposite.”
Sellers also complain that, despite prices shooting up in recent months, they haven’t been able to fetch the high prices seen when interest rates were lower, Ana Mernik Bohra, an agent with Christie’s International Real Estate Sereno in San Jose, told the newspaper.
“Both the buyers and sellers feel like they’re getting the short end of the stick,” she said.
— Dana Bartholomew
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