The Bay Area’s housing market stumbled in May — prime home-buying season — as high prices and low inventory held real estate sales well below normal levels, according to a report Thursday.
Sales of single-family houses were down from the same month last year in the East Bay, Peninsula and South Bay, while prices were up, according to real estate information service DataQuick, which released the report. Prices for all types of homes were at their highest since November 2007 in the nine-county Bay Area.
“There is still some pent-up demand out there, but we can’t muster enough sales to beat last year,” said Andrew LePage of DataQuick. “Inventory remains one of the key reasons, but affordability has cropped up as one of the reasons as well.”
A sold sign is posted in front of a home for sale on July 30, 2013 in San Francisco.
Some potential buyers say they’re either priced out or worn out from the competition for a relatively small number of desirable homes for sale.
Anurag Singh has decided to take a breather from home shopping. The Silicon Valley engineer said he started looking in November and December, when houses he liked were priced within his reach. But his offers kept getting trumped by higher offers.
“Then I realized it is hard to get a house in this market,” Singh said.
Now, for the same type of house he was looking for late last year, prices have risen $50,000 or more, he said. “I’m still looking but not as actively as I was earlier.”
His agent, Gina Saporito of Clickhome Realty in Santa Clara, said, “We still need more inventory. There’s a lot of buyers out there.”
But even with sales slowing, there are still enough buyers making multiple offers for what’s available to keep prices rising.
“It’s a great time to be selling real estate in the Bay Area area right now,” said Devin Ratoosh with Marvin Gardens Real Estate in Berkeley. “It really makes it easy for sellers when there’s this much competition lining up for a house.”
DataQuick reported that Contra Costa County’s median sales price gained 13.8 percent from May 2013 to $479,000, while Alameda County was up 25.8 percent to $644,000.
Santa Clara County, which surpassed its peak price for existing single-family homes in April, saw a gain of 6.7 percent to $800,000, and San Mateo County was up 14.2 percent to $925,000.
Marilyn Cunningham, president of the Contra Costa Association of Realtors, said that two weeks into June, she’s seeing an increase in listings of homes for sale, but they’re being snapped up so quickly that inventory remains low. And prices keep rising, she said.
“It’s good for sellers,” she said. “They are getting their equity back. And buyers are coming out, but it’s getting more difficult for them because prices are going up.”
May usually sees a big boost in sales as the home-buying season gets in full swing, but the tight market and high prices have sales of all types of homes — including condos and townhomes — in the nine-county Bay Area down 7.5 percent from a year ago, and 17.4 percent below the May average going back to 1988, DataQuick said.
The price gains are leveling off, however, as they near their previous peaks and as buyers drop out. The year-over-year gains between May 2012 and May 2013 were much larger in all but Alameda County, according to DataQuick.
“Buyers for whatever reason are not willing to line up for a mortgage to buy a house,” said Richard Calhoun of Creekside Realty in San Jose.
Some buyers just can’t find their dream house at affordable prices, and prefer to wait. “I want to fall in love, I don’t want to compromise,” said Shawn Clark, a chip company engineer who is content to continue renting his two-bedroom home in Sunnyvale.
If prices are rising in middle-income parts of the Bay Area, they’re through the roof in the wealthiest enclaves of Silicon Valley.
Wendy McPherson of Coldwell Banker in Menlo Park said recent tech company public offerings and acquisitions are creating wealthy buyers at a brisk pace. “We just had a buyer buy a $20 million property who was living in a $900,000 house,” she said.
Ken DeLeon of DeLeon Realty in Palo Alto said demand is so brisk for luxury real estate that one home in Atherton sold for $14 million in three days.
“I believe we are probably hitting affordability limits,” said Brett Jennings of Keller Williams in Los Gatos. His said his typical buyers are a husband and wife in tech, making a combined $240,000 a year, who still can’t afford a basic home in some parts of the valley.
“When the median home price is no longer supported by the median income, we’re near top,” he said.
Contact Pete Carey at 408-920-5419. Follow him on Twitter.com/petecarey.