Home prices in San Francisco Bay Area's markets dropped 14%-20% from their peaks, according to a report by Compass. The home sales price in Q1 of 2023 was down by 18% YoY compared to Q1 of 2022. The median sales price, $1.53M, was below the pre-pandemic value of $1.55M in Q1 of 2020. Factors that have contributed to this decline include the rise of remote work, layoffs in the tech industry, and companies like Meta shrinking their bonus plans. This media sales price is four times higher than the U.S. median sales price of $375,700.
The unemployment rate in Santa Carla County was 3.2% in March. Other counties, including San Francisco, Alameda, San Mateo, and Marin, have also been seeing an increase in the unemployment rate over the past six months. Data from Layoffs.fyi shows that job cuts in the region have eliminated over 14,000 jobs.
The report also identified the most expensive residential markets in the Bay Area. Atherton was the most expensive region in the area, with a median sales price of $11M. This price was almost double that of Hillsborough ($5.6M), the second most expensive residential market. Los Altos Hills and East Bay's Diablo community bagged the third and fourth positions. Palo Alto had the highest price per square foot, almost $1,800.
According to the California Association of Realtors (CAR), home sales in the Bay Area saw a YoY decline of 35.5% in March. All regions in California, except the Central Valley, saw YoY declines of over 30%. The highest was seen in the Far North region (38.9%). Five of the nine counties in the Bay Area saw a decline of over 35%. Experts believe this market shift provides an opportunity for homebuyers who have been priced out in the past.
Chief Market Analyst at Compass, Patrick Carlisle, said demand has rebounded in the region as buyers have accepted higher interest rates or paying all cash. The report predicts a Spring market recovery with open houses seeing increased traffic, more listing selling, and more quickly with multiple offers. However, the recovery is hampered by economic and supply constraints. The mortgage lock-in effect has made sellers more reluctant to list their properties for sale.