The last few weeks of the stock market’s wild swings has alerted many about a potential recession. Pacific Union’s economist, Selma Hepp, examines January’s housing market activity in the Bay Area, addresses recent financial market volatility and how it may affect real estate markets. I’ve provided a short summary of the article’s main points below, coupled with South Beach sales activity. If you want to read the entire report .
Summary:
- Homes priced above $3 million slowed again, but not in San Francisco and Marin County.
- Sonoma and Napa counties saw higher year-over-year activity in January, continuing the post-wildfire pattern.
- Inventory levels continue to trend down, with overall supply down 20 percent from last January and declines seen across all price ranges.
- Median home prices continue to climb, with overall appreciation in the Bay Area up 12 percent from last January.
- Despite financial market volatility, the U.S. economy remains strong, with projected 2018 growth the best in a decade.
The graph below provides a compelling summary of average sales price growth in South Beach over the past 10 years, and it also highlights the annual seasonality of home price changes. Each dip occurs in December/January. At the end of 2017 into the beginning of this year, prices continued to hover at pricing comparable to 2015, which is when the highest peaks in South Beach pricing occurred. In Q4 2017’s report, we discussed a shortage of inventory drove up the average sales price in South Beach. Pricing is appreciating at a slower pace and properties are staying on the market for longer.
