There are signs of the housing market cooling, at least in some parts of the Bay Area. This is something Trulia sees as good news for would-be buyers who've spent the past several years watching low inventory and escalating prices push them further from affordability. But it's not happening across the entire region.
Trulia looked at nine counties in the Bay Area [1] to see which are still heating up and which are cooling down. The region's stalwarts—San Francisco, San Jose, and Oakland—still have the highest median home values in the country, at $1.39 million, $1.29 million and $766,866, respectively.
But “runaway price appreciation is plaguing cheaper enclaves that border some of the most expensive and affluent cities in the Bay,” Trulia reported. That's especially true in North Fair Oaks and East Palo Alto, which logged appreciation rates of 32 percent and 25 percent, respectively, over the past year. That’s about double the 14.4 percent price appreciation for home values in the rest of San Mateo County, the report stated.
However, there are cooling pockets in North and East Bay.
“Homes in Napa County, valued at $665,000, are worth less than half the homes in San Francisco,” the report stated. “Homes in Sonoma, Contra Costa, and Solano counties are even cheaper, at $642,400, $624,700, and $432,200, respectively.”
There's a similar dichotomy with the median days on market in the past year. According to the report, homes in Napa spend 62 days on the market. In Vallejo, it's 50 days in Vallejo. Both compare to San Francisco's 40.
Still, even in San Francisco, Trulia saw signs of cooling. According to the report, homes in the Russian Hill and Telegraph Hill neighborhoods saw their days on market fall about 11 days over the last year. But that still puts their median days above 50.
“A drop in net migration also indicates a possible slowdown,” the report stated. “Until recently, all of the Bay Area metros saw more people moving in than moving out in a post-recession job boom.”
However, in the last few years, that trend has either slowed or reversed. And a decline in net migration could translate into less demand for Bay Area housing, Trulia reported. Maybe even a stabilization or actual drop in prices.