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The nationwide actual property market is cooling off (not like San Francisco)

A recent Wall Street Journal article claims the national housing market is “losing some of its’ frenzy” as more homes are put up for sale and overpriced homes are on the market instead of “instant buyers.”

I wondered if that was the case with the San Francisco Bay Area market, which is often an outlier when it comes to real estate, and asked three experts for their opinions.

As with most things to do with living in the Bay Area, the answer is complicated.

At the national level, the market appears to be slowing, said Daryl Fairweather, chief economist for the Redfin residential development.

“We’re going from 100 mph to 80 mph,” Fairweather said. “What is happening right now is that many buyers are pulling out of the market due to high property prices. We are seeing lower sales and a slight increase in price drops.”

She noted that the national listings “restricted the market,” but that is not the case in San Francisco, where a small exodus of people has left the city for other locations in the Bay Area or California. According to the logic, the more people go, the greater the available housing stock.

Still, San Francisco remains the most expensive market in the country.

“That’s why everyone goes, because it’s so expensive,” said Fairweather. “But when you have the money (and have lots in the Bay Area), the market isn’t really a problem for you.”

Statistically, the number of deals signed in the Bay Area’s largest markets – Santa Clara, Alameda, Contra Costa and San Francisco – is slightly lower than it was in the spring. The exception is Alameda County, which, according to Compass, has increased slightly since the spring.

That said, it’s not uncommon for these markets to slowly slow down after the spring peaks as the summer season is usually slower.

Likewise, according to Realtor.com, the new listing data in the four above-mentioned districts rose significantly in June compared to May. Alameda grew by 5%, Contra Costa by 16% and Santa Clara by 5%. Only San Francisco was down 3%. Active entries on a specific day of the month increased in all four counties in June versus May. This number is influenced by the number of new listings that hit the market and how quickly buyers are buying them.

Alan Thuma, a longtime real estate agent at Vanguard Properties, says he has seen steady inventory but also “steady absorption”. In other words, while there can be plenty of active listings, these properties book out quickly – and often quickly. One reason for the increased inventory could be that many people are traveling this summer as COVID restrictions ease.

“But everything is still moving this summer,” he said, adding that he has hosted an open house every weekend this season.

Thuma believes that we “march continuously to an autumn market”. He expects plenty of inventory in the fall, but also expects buyers to anticipate this and start looking now.

“If you are a first-time buyer, it is very natural to be trained to see the market pick up after Labor Day,” he said, indicating that many buyers would hold off their search until then.

In general, he sees any market downturn in the “foggy San Francisco” season, when the market usually fades.

So is the Bay Area housing market cooling off? Probably not, no. And while inventory can rise in the fall, as usual, expect a lot of competition.

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