The escalation of home prices that began 6 years ago continues. Real Estate is cyclical and the question on everyone's mind is how long is going to continue? The typical answer is that no one can accurately predict market shifts.
In the Greater Bay area, the boom is evident, making for happy sellers and concerned buyers. For the past 5 years there has been a steady increase in home prices, up to what is now an average of 72% with the median bay home price at a record $755,000. In May and June figures indicated a small turn down in pricing appreciation for the first time in 5 years.
Median home prices rose 3.1% in Alameda County between May 2016 and May 2017, but declined 1.1% between April and May of this year, according to CoreLogic. In Contra Costa County, home prices rose 6.5% between May 2016 and May 2017 but declined 0.7% between April and May of this year.
San Francisco has seen better supply of housing which has moderated pricing, though East Bay prices continue to grow due to low supply of housing.
While the job market has grown in the bay area, the development of new housing has not. A major economic event could affect our market, like Tech employers looking to attract the best employees may relocate elsewhere, fed up with local housing market pricing for their talent. However, the tech economy is thriving.
The cyclical nature of real estate booms and busts are fairly typical. The recovery period after a downturn typically lasts 5 to 7 years. We are 5 years into a recovery period that began in 2012 and cannot predict how or when it will end, it could be a slow adjustment. "The Bubble" doesn't always burst.
For now the moderate priced housing market is strong with prices appreciating quickly, where high-end real estate has plateaued. According to the Regional Forecast for Plan Bay Area 2040, the best scenario for the 9.5 Million bay area residents predicted by 2040, will be to return to the development of housing and create affordable housing to support economic growth and new job creation.
For 35+ years, Patty Rogers, Broker Associate, BRE#00669968 with Abio Properties, has been previewing and matching stylish homes to satisfied Bay Area homebuyers and breaking sales records with her listings. She is known for finding and selling unique homes with a "Modicum of Charm" and is a shrewd negotiator who understands how to successfully orchestrate deals.