For the past few years, inventory has been the big story in the San Francisco Bay Area real estate market. Or rather, a lack of inventory. Tight supply and strong demand have boosted home prices, while fueling fierce competition among buyers.
But that appears to be changing. A new housing industry report showed that several real estate markets in California — including San Francisco and San Jose — are leading the nation in terms of annual inventory growth.
That’s good news for Bay Area home buyers who are planning to enter the real estate market in 2019. It’s like getting some much-needed rain after a long drought.
Bay Area Housing Market Inventory Grows
On Halloween, a report published by the housing research team at Realtor.com® brought some good news to home buyers across the San Francisco Bay Area. In key cities across the region, housing market inventory has increased steadily over the past year.
As a result, Bay Area home buyers planning to make a purchase in 2019 could have more options to choose from — and a bit less competition.
The Realtor.com team examined housing trends in the nation’s 45 largest metropolitan areas, to figure out where the number of real estate listings has increased the most. San Jose, California topped the list with a 130% increase in active listings from October 2017 to October 2018.
San Francisco and San Diego came in third and fourth, respectively, among the 45 major metros included in this study.
To quote the report:
“In October, 26 of the 45 largest markets in the U.S. saw year-over-year inventory increases, up from 22 markets last month. The five markets that saw the largest inventory jumps were San Jose, Calif.; Seattle; San Francisco; San Diego; and Nashville, Tenn.”
The number of active real estate listings rose by 130% in San Jose, 42% in San Francisco, and 41% in San Diego.
So three of the Bay Area housing markets (along with Seattle) are leading the nation in terms of annual growth in inventory. That’s a big deal, considering how tight conditions have been over the last three or four years. It could be one of the primary factors that shapes the Bay Area real estate market in 2019.
Related: Will 2019 be a good time to buy?
Still Not a Buyer’s Market
Clearly there is a shift taking place within the Bay Area housing market, with inventory growing and competition easing. But it’s probably much too early to call it a buyer’s market. Current conditions still favor sellers, and that may continue well into 2019.
Jim Harrison, CEO of MLSListings, recently told the San Francisco Chronicle:
“We believe we are on the edge of a market trend. We do hear, anecdotally from some brokers and agents … that there is more inventory and buyers are slower to action.”
Whether this is a short- or long-term shift, however, remains to be seen.
More Properties to Choose from in 2019?
Home buyers entering the Bay Area housing market in 2019 could have more inventory to choose from, as a result of these ongoing trends. This is especially true for the San Jose and San Francisco metro areas, which have long suffered from supply shortages.
As more listing come onto the market, bidding wars among buyers could become a thing of the past — or at least a rarity.
Despite the growth in housing market inventory across the Bay Area, buyers will still want to start early and allow plenty of time to find a suitable property. The real estate market in this part of the state might not be as tight as it used to be. But supply levels are still below what’s considered to be a “balanced.”