The San Francisco Bay Area home sales numbers are in for August, and they continue to weaken.
Total sales for the Bay Area fell nearly 10 percent compared with August 2017, according to CoreLogic. Sales did increase 1.8 percent compared with July, but the total volume was nearly 18 percent below the August average going back to 1988 and the lowest since August 2011. Sales activity for the summer, June through August, was the slowest in seven years.
"Much of the recent slowdown can be attributed to the lack of affordable inventory on the market," said Andrew LePage, a CoreLogic analyst, in a release. "Unlike the frenzied market of the mid-2000s, many struggling to buy today don't have the option to stretch financially with the sort of subprime and other risky financing that fueled a lot of homebuying late in the last cycle."
San Francisco sales were down 6 percent annually. San Francisco was ranked the most overvalued housing market in the United States, according to UBS' just-released Global Real Estate Bubble Index 2018.
"Real prices in San Francisco climbed 9 percent since last summer and now exceed their 2006 peak by more than 20 percent, amid a thriving local economy, significant non-cash earnings by many tech employees, and buoyant foreign demand. The city is approaching high valuation risk," according to the report.
The median price for all Bay Area homes sold in August was $830,000, up 12.4 percent annually, according to CoreLogic. June and May saw the highest median prices ever.
"Waning affordability reflects price hikes and a significant rise in mortgage interest rates this year," LePage said in the release. "While the Bay Area's median sale price rose about 12 percent year over year in August, the monthly mortgage payment on the median-priced home jumped 21.5 percent due to a roughly 0.7-percentage-point gain in mortgage rates over that period."
The supply of homes for sale is starting to rise. San Jose saw a 67 percent increase in listings in the third quarter of this year compared with the same quarter in 2017, according to Trulia. Inventory in Oakland was up 26 percent annually.
"While this is ultimately good news for frustrated buyers, years of steadily increasing prices mean that those hoping to buy a home will need to spend a bigger share of their income once they find one," said Cheryl Young, Trulia's chief economist. "Nonetheless, those buyers daunted by low inventory and high prices have reason to be cautiously optimistic as parts of the housing market begin to ease."