Bay Area home prices rose substantially in March despite a drop in sales compared with last March, according to the California Association of Realtors, but those numbers reflect deals entered into before most counties imposed shelter-in-place orders March 17.
Data from several local real estate groups for the weeks since then show a big drop in pending sales, new listings and closings — and a sharp increase in homes being pulled off the market.
The real estate market has changed dramatically since the coronavirus trapped most people in their homes. Although real estate has been deemed an essential service, agents can't hold open houses. One-on-one showings are strongly discouraged, but still allowed if the home is vacant or staged and the agent follows strict protocols. For example, there generally can't be more than one agent and two buyers in the house at a time, wearing masks, and surfaces must be disinfected between showings. The economic uncertainty has also pushed many sellers and buyers to the sidelines, unless they have an urgent need to move.
The statewide association's report for March shows that heading into the pandemic, the Bay Area market was going strong, at least price-wise.
The median price paid for an existing, single-family home in the Bay Area rose to $1,009,790 in March, up 11% from February and 7.4% higher than a year ago.
The median price rose on a year-over-year basis in every Bay Area county. Contra Costa had the largest increase, 10.4%. Prices also rose month to month in every county except Solano, where it fell 2.6%. (The report excludes sales of condo units, newly built homes and sales not reported to a multiple-listing service.)
The number of Bay Area sales that closed last month rose 30.1% from February but was down 12.1% from last March.
Statewide, sales were down 11.5% from February and down 6.1% from a year ago.
That sales decrease "is only a prelude to what we'll see in April and May because sales were still modestly strong during the first two weeks of March," Jeanne Radsick, a Bakersfield Realtor and the association's president, said in a news release. However, a 25% drop in pending sales "suggest the decline could extend beyond the next couple of months."
To get a sense of where things are going, I asked a couple of local multiple-listings services what they're seeing since March 17. Although they don't track data exactly the same way, they both show sharp drops — 40% to 50% in some cases — in activity.
In San Francisco, from March 17 through Tuesday, 383 sales had closed, 425 new listings came on the market and 325 listings were taken off the market (either put on hold or canceled).
During the same period last year, 642 sales closed, 876 new listings hit the market and only 112 were pulled off, according to the San Francisco Association of Realtors' listing service.
"Business is still going on but at a greatly reduced volume," said Marc Dickow, broker with Core7 Real Estate and the association's president. Homes that were in contract before March 17 are for the most part closing, but as for new deals, "if people can wait, I think they are waiting to see how this all shakes out."
In five South Bay counties, from March 17 through Tuesday, the number of closed sales dropped to 1,872 this year from 2,290 last year. The number of new listings fell to 2,063 from 3,768. And the number of canceled or withdrawn listings rose to 1,140 from 670, according to MLSListings, which covers San Mateo, Santa Clara, Santa Cruz, Monterey and San Benito counties.
More telling is a sharp drop in listings that went from active to contingent or pending. These are buyers who, since March 17, had an offer accepted on a house. That number has fallen sharply, to 1,714 this year from 3,956 the same period last year.
"That will result in a big drop in closings" in the weeks ahead, said Larry Knapp, a spokesman for MLSListings.
Some contracts being signed now have language that delays inspections until after shelter-in-place orders are lifted.
Knapp added that the big drop in new listings means that the housing-inventory shortage that existed before March 17 will be even worse when people can stop sheltering.
It's far too early to say what impact the coronavirus will have on prices. But in San Francisco, the average listing price for a home that came on the market between March 17 and Thursday was $2.54 million this year, way up from $1.58 million.
Average prices can be skewed by a few very expensive homes, but in San Francisco it's true that most new listings are high-end homes, said Jay Cheng, a spokesman for the San Francisco Realtors Association.
Looking ahead, "the next couple of months are going to see sharply reduced sales," said Leslie Appleton-Young, the statewide association's chief economist. "The rest of the year is up for discussion. We don't know how long we will be under shelter-in-place, how long it will be before consumers are comfortable returning to a public life. We know it will be gradual. We don't know what the collateral damage will be in the labor market."
