OAKLAND, Calif. - Bay Area home prices as well as those in other California instances, may have reached a temporary limit on what people can and are willing to pay. After years of runaway price growth, the Bay Area has reached a sizable but not insurmountable bump in the road.
Zillow, the national online real estate database company, interviewed 110 housing experts and economists for its year-end survey of the nation's housing markets.
"Experts mostly predict slow down, but not broadly falling home prices. We're expecting to see price appreciation just under three percent for the next year," said Zillow.com economist Jeff Tucker.
Then, researchers looked to see which markets are the most likely to be under the three percent increase in 2020.
"The top of the list was San Francisco, San Jose and, actually, Los Angeles. Some of these markets were where prices actually fell in 2019. They're coming out of very hot years in 2018 and very, very low inventory at the end of 2017," said economist Tucker.
Joe Velasco is an agent for Compass Real Estate in the Southbay and Peninsula.
"What I've noticed in Santa Clara County along last year in the last twelve months, you know, prices came down about 6%," said Velasco. But, that's not the case in towns with excellent school systems. "In those areas specifically, we are seeing, you know, growth in the market," said Valasco.
The Bay Area forecast taps the brakes on increases.
"Mostly prices rising more slowly that the rest of the country. In fact, especially for San Francisco and San Jose, expecting prices to actually drop a little bit over the next year.
"The way we see it is these markets have hit a bit of an affordability ceiling where there just weren't that many buyers left who could actually break into the market for the first time, if they didn't already have a lot of equity from their last home," said Tucker.
"I haven't even looked into it because it hasn't seemed like a reality and I don't know if I would want to own a home in this area just because of how high the prices are," said renter Liz McFeeters.
The other thing keeping prices higher than the rest of the nation is the severe shortage of homes actually available for sale.
"This morning I checked, there was less than 700 homes available, you know, in Santa Clara County and that goes for both condos and town homes," said Velasco.
That's why some folks are choosing to leave.
"It looks like more and more workers in California or people who might have once thought about moving to California and turning instead to growing cities in the south, especially, Austin, Nashville and Charlotte," said Tucker.
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