Bay Area Home Sales Down for Fourth Straight Month

Home sales in the Bay Area were down 13.5 percent in July compared to the same month in 2015, according to data released today by real estate data company CoreLogic.

July is the fourth consecutive month home sales have been down across the nine-county region. According to CoreLogic analyst Andrew LePage, that's a bigger issue than the big July dip.

"When you get to three, four, five, six months, then it starts looking like a real trend," LePage said.

He points to a familiar culprit -- lack of affordable housing -- as one of the main drivers behind the consistent declines. Also to blame, he says, is low housing inventory in many markets, moderately tight credit and a quirk of the calendar. Since there were five weekends in July, there were two fewer business days to record home sales.

"If you adjust for that, sales are still down year-over-year, just not down as much," he said.

Home sales in Contra Costa, Sonoma and Santa Clara counties were down the most since this time last year, and San Francisco was the only county where more homes were sold this July than last. LePage said those numbers were boosted by a large number of new homes and condos hitting the market.

Even so, there are still supply issues in the housing market.

"We have a really inadequate, anemic supply of housing," said Tim Colen, spokesman for the San Francisco Housing Action Coalition. "That's going to keep prices uncomfortably, painfully high."

The median home sale price in the Bay Area in July was $700,000, down slightly from a record $710,000 in June and a 6.3 percent increase from July 2015. That's a far cry from the double-digit percent price increases the Bay Area was seeing a few years ago.

"That's a good thing," Colen said. "Let housing prices take a breath and cool down."

Not all counties are seeing smaller price hikes. The median sale price in Solano County jumped 14.5 percent between July 2015 and July 2016, the largest of any Bay Area county.

LePage said that's due to a "spillover effect" that's forcing people to look outside of major job centers like San Francisco for more affordable housing.

"You can't afford a home close to your job, and you start moving out," he said. "You go north, south, east, and that puts more pressure on Solano County and helps drive prices up."

Vallejo, the largest city in Solano County, has been rated one of the hottest real estate markets in the country this year.

"More people are going to be more willing to drive farther from their jobs to find a home they can afford," LePage said.

Colen says San Francisco has done better than many cities in the area when it comes to housing, but that it's still "in a bad way."

"It's hard to imagine any scenario where we get a handle on rising prices without increasing supply at all affordability levels," Colen said.