SAN JOSE, Calif. (KTVU) - 2018 ends with a new reality in the real estate market – the days of homes entering and exiting the market in hours are over. A sales slump in the Bay Area has turned a seller’s market into a buyer’s market.
Coldwell Banker realtor Brian Kiernan is still making a killing in the market. But as he welcomes prospective buyers to his latest prize, a four-bedroom, two and a half bath ranch-style home in the Almaden Valley section of San Jose, it’s with the knowledge this property sat on the market 70-days before he was able to broker a deal.
“Taking a pause on the buyers' side has led some homes to sit on the market a little bit longer than what we’d been accustomed to in the last couple of years,” said Kiernan.
Earlier in the year, a long time on the market was measured in a matter of days. Now it’s months, as a six-month slide that started back in June, continues into the new year.
According to housing research firm CoreLogic, across the Bay Area sales fell 8.3 percent in June, nearly 10 percent in August, 6.5 percent in October, and then a 15-percent nosedive in November. November’s median home price dropped 3.8 percent from the previous month.
“I’m not surprised that volume has dropped. This is what happens when you reach a plateau,” said Fred Foldvary, a San Jose State University economist.
He says there are indications the malaise could become a meltdown. Wall Street is erratic. Interest rates are on the rise, and home prices are reaching equilibrium – a point where both buy and seller must compromise.
“When housing becomes unaffordable, prices stop rising...I think this is the beginning signs of a coming recession such as we had in 2008,” said Foldvary.
Another crash could be years off. In the meantime, realtors, buyers, and sellers are coming to grips with the new reality.
“Too often they were throwing caution to the wind. I don’t think they have to do that today,” said Kiernan.
This, as buying a house in the Bay Area becomes more normal.