The latest forecasts for the San Francisco Bay Area suggest that home prices will continue rising throughout 2019. So for those planning to enter the market, a sense of urgency might be warranted.
The good news is that Bay Area home buyers could have more properties to choose from next year, thanks to some much-needed inventory growth that has taken place in recent months.
Here’s a roundup of the latest trends for the real estate market, with a forecast for 2019.
Forecast for Bay Area Housing Market: Prices Rising in 2019
According to Zillow, the median home value for the San Francisco-Oakland-Hayward metro area rose to around $967,200 as of December 2018. That was an increase of nearly 10% from a year earlier.
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Looking forward, their forecast for the Bay Area real estate market suggests that prices will rise by around 7% between now and the end of 2019. That’s good news for homeowners in the area, who are enjoying some good equity growth. But it’s a cause for concern for local home buyers.
If these latest forecasts prove accurate, Bay Area home buyers who delay their purchases until later in 2019 could encounter higher costs. So a strong case could be made for buying sooner rather than later.
Here’s a related forecast for San Francisco in particular.
Outmigration: Fewer Buyers in the Market Next Year?
Outmigration. That’s one of the biggest buzzwords right now, when it comes to the San Francisco Bay Area housing market.
Merriam-Webster defines outmigration as the act of leaving “one region or community in order to settle in another especially as part of a large-scale and continuing movement of population.” And that kind of trend is happening across the Bay Area.
In its 2019 housing market forecast, the California Association of REALTORS® wrote the following:
“The outmigration trend [during 2018] was even worse in the Bay Area, where housing was the least affordable, with 35 percent of homebuyers moving out because of affordability constraints.”
In other words, a lot of folks who want to buy a home are moving elsewhere, where they can get more for the money.
But there could be a silver lining to this trend. For those home buyers who choose to stay in the Bay Area — and plan to buy sometime during 2019 — there could be less competition next year.
Outmigration and other factors are causing a shift within the Bay Area housing market. Demand has softened over the past year, forcing sellers to drop their prices in many cases.
According to an October 2018 article in the The Mercury News:
“Although the [Bay Area real estate] market still favors sellers, economists also see signs it has begun to turn. About 40 percent of recent real estate listings have dropped prices this year, and homes have begun to spend a few more days on the market.”
Good News: Real Estate Inventory on the Rise
The big story right now for the Bay Area real estate market is inventory. In short, there are more homes on the market today than in recent years. This is something that will likely continue into 2019 as well.
According to an October report from the National Association of REALTORS®, San Francisco and San Jose were leading the nation in terms of housing inventory growth. (See our full coverage of that report here.) This bodes well for Bay Area home buyers in 2019. In addition to having a bit less competition, there should be more properties to choose from over the coming months.