SAN FRANCISCO (KRON) – After a brief slump in the sale price of homes early this year, Bay Area home prices are soaring again. The median price is back where it was last summer with no end in sight.
RE/MAX reports the median sales price in the Bay Area, which began climbing again in March, continues to rise. In fact, in June of this year, it totaled $1,190,000, the highest in the Bay Area since June of last year.
“It’s absolutely a result of historic low inventory levels. People have not been putting their houses on the market,” explained RE/MAX Gold broker Tim Yee.
Yee says the drop in the number of homes for sale has been dramatic – about 30 to 40 percent less than last year at this time.
“In June of 2022 in the city of San Francisco, there was 6,155 active listings. In June of 2023 this year, there were 3,737,” he said.
Experts say one of the reasons for that low inventory is because the federal reserve keeps raising rates.
“People are not selling because they don’t know where they’re gonna go and they would have to get a new mortgage at a higher rate. So there’s not too much encouragement for them to want to move,” said Coldwell banker Dan McLean.
And while prices in the Bay Area are unlikely to dip in the months ahead, experts believe inventory could increase if the federal government signals they are done with the rate hikes.
“I think if people know that it’s settling out, I think that will increase the number of move-up buyers, which means people will sell their starter houses and that will increase the inventory,” Yee said.
One of the key drivers of the market is interest rates. The federal government is set to discuss another quarter-point hike later this week.