San Francisco Bay Area Home Sales Tumble in H1-2016
Down 10.3 Percent from 2015, Lowest Since 2008
CALIFORNIA, AUGUST 11, 2016 – In the first half of 2016 (January through June), San Francisco Bay Area single-family home and condominium sales fell 10.3 percent relative to the same period in 2015. Sales were the lowest since 2008.
Despite the slowdown in sales, median home prices continued to rise upwards to what might be described as new levels of unaffordability. Within the six Bay Area counties included in this study, San Francisco, Marin, Alameda, Contra Costa, San Mateo and Santa Clara, the increase in median home prices from June 2015 to June 2016 ranged from a low 6.5 percent (San Francisco) to a high of 14.3 percent (Marin).
Change in Bay Area Home Sales and Prices
(January through June Totals)
“It’s no surprise that sales have slowed in the Bay Area. Median home prices in the Marin to Santa Clara corridor top $1 million. San Mateo County hit a confounding $1.26 million in June 2016,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “Prices continue to rise but have definitely slowed from the double digit increases of 2013 and 2014. The decline in sales suggests that prices may soon top, perhaps as early as next year.”
“The slowdown in Bay Area sales has given rise to the concern that we are in the midst of another real estate bubble getting ready to pop,” said Schnapp. “This time around, the factors that contributed to the 2006 real estate bubble are largely absent. Factors such as large numbers of poor quality borrowers, easy availability of high-risk adjustable rate mortgages with 100 percent financing and a Federal Reserve that was raising interest rates, are not in play today.”
While the housing market may be showing signs of slowing down, California’s economy, the sixth largest in the world, remains robust. California’s economic growth rate is nearly twice the national rate, nearly half a million new jobs were created in 2015, and the unemployment rate in June 2016 was 5.4 percent. In the Bay Area, the technology sector continues to add high paying jobs and is likely to remain a dependable fuel source for California’s growth engine. Despite the drought, tourism and farm-related industries remain strong as well.
“The biggest hurdle to the Bay Area housing market has nothing to do with the economy,” said Schnapp. “Blame restrictive zoning and burdensome building regulations that limit building and add to the cost of construction. Until those issues are addressed, we expect sluggish sales to continue well into 2017.”
“In our view, Bay Area real estate is a tough market that is largely unaffordable,” said Schnapp. “That being said, we don’t see the current trend of sluggish sales and high prices leading to a repeat of 2008.”
San Francisco Bay Area Home Sales
Home Sales – January through June (H1) totals of single-family residence and condominium sales by year from 2001 to 2016
San Francisco Bay Area Median Home Price
Median Sales Price vs. Sales Volume – Median sales price of a San Francisco Bay Area single family home. June year-over-year comparison.
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New Senate and Assembly Bills that Impact Property Owners, Housing Availability and Affordability – By Joe Washburn
Posted on 01. Aug, 2016 by AOL of California
Requires unlawful detainer proceedings to be hidden permanently unless the property owner prevails on a default judgment, summary judgment, trial, or stipulations by all parties. Allows rent cheats to hide their bad actions and perpetrate harm on other property owners by keeping the unlawful detainer proceedings hidden from public view.
AB 2003 – Neutralizes Tenant Delay Tactics
Once an unlawful detainer has been served, this requires the venue for trial to be the court most proximal to the property involved. Grants the landlord immediate access to the property if the tenant filed a claim of inhabitability. AB 2003 is not positive for small property owners.
AB 2502 – Rent Controlled Inclusionary Housing
Increases the cost and reduces the supply of housing by authorizing local governments as a condition of development, to impose a costly and inflexible price-controlled inclusionary housing requirement. In so doing, AB 2502 legislatively repeals an established court decision upholding developers’ ability to set initial rent rates for new dwelling units. Also, it undermines existing Cost-Hawkins protections by allowing local governments to impose mandatory inclusionary zoning, (i.e. rent control) on newly constructed rental housing without any consideration for the economic viability of the project.
SB 1053 – Forces Owners to Accept Section 8 Housing Vouchers.
Legislation died in Committee on March 27th.
SB 1150 – Increases Risk and Cost of Residential Loans
This allows a party not on the mortgage to interfere with a lawful foreclosure. It also establishes new, lopsided, private rights of action with draconian penalties, injunctive relief and attorney’s fees only for the prevailing successor in interest. If passed into law, SB 1150 would probably the foreclosure process by additional months, if not years, if a property is involved in probate following a borrower’s death.
Joe Washburn is a SPOSFI member. Reprinted with permission of the Small Property Owners of San Francisco Institute (SPOSFI) News. F