- San Francisco Bay Area housing market inventory is starting to rise.
- Active listings rose by 46% in June 2022, compared to a year earlier.
- This is the latest sign of a shift within the Bay Area real estate scene.
- Inventory growth could help balance the housing market into 2023.
The past few weeks have brought some good news for frustrated home buyers in the San Francisco Bay Area. And one of the most positive trends has to do with housing market inventory. Realtor.com recently reported a significant increase in the number of property listings in the region.
Bay Area Housing Market Inventory on the Rise
As it turns out, S.F. Bay Area housing market inventory is finally starting to rise. This means there are more homes coming onto the market, a trend that could help balance the market going forward.
This is great news for home buyers and real estate agents all across the Bay Area. For buyers, ongoing inventory growth could make it easier to find a suitable house within budget.
This data comes from the research team at Realtor.com. The company’s latest nationwide housing market report, published on June 30, showed a significant increase in real estate listings within the San Francisco-Oakland-Hayward metropolitan area.
Here’s the most notable data point from their June report:
Active real estate listings within the San Francisco-Oakland-Hayward metropolitan area increased by around 46% in June of 2022, compared to a year earlier.
So it seems that Bay Area housing market inventory is starting to grow, at long last. It’s hard to say whether or not this trend will continue going forward. But some analysts expect to see additional supply gains through the end of 2022 and into 2023.
Danielle Hale, chief economist for Realtor.com, recently wrote: “we anticipate that more inventory will eventually cool the feverish pace of competition” among home buyers in the U.S.
Changing Conditions: From ‘Shrinkage’ to Growth
It’s worth noting that Bay Area housing market inventory was declining earlier this year, and for much of 2021 as well. That makes this recent report stand out even more.
We can see this market change by looking at Realtor.com’s previous housing reports. For instance, here are the year-over-year changes in active real estate listings for the Bay Area, going back several months:
- June: Bay Area listings were up by 46%, compared to a year earlier
- May: Listings were up by 32.5%, year over year
- April: Listings were down by -4.1%
- March: Listings were down by -10.7%
These numbers show that the Bay Area housing market inventory situation has gone from “shrinkage” to growth, when measured by the annual change in total property listings.
Sellers Appear to Be Getting the Message
With Bay Area housing market inventory on the rise, sellers will have to be more mindful and flexible when it comes to pricing their homes. And it seems that some of them are getting the message.
This latest Realtor.com report also revealed an increase in the number of price reductions within the S.F. Bay Area region. In this context, a “price reduction” occurs when a homeowner / seller lowers their asking price from the original listing amount. This often occurs do to a lack of offers.
In June of 2022, 15% of property listings within the San Francisco-Oakland-Hayward metropolitan area had a price reduction. That was an increase of 10% compared to a year earlier.
Just a few months ago, the share of listings with a price reduction was closer to zero. Much has changed since then.
A More Balanced Real Estate Market in 2023
This latest report brings good news for home buyers all across the San Francisco Bay Area region. A rise in housing market inventory will ease competition among buyers, giving them a respite from the fast-paced conditions we’ve seen over the past two years.
But make no mistake — the Bay Area real estate scene still favors sellers, and that probably won’t change any time soon. The most likely scenario, based on current trends, is that the market will even out a bit over the coming months.
While it’s helpful for buyers, recent inventory growth within the Bay Area housing market won’t undo the severe supply shortage we’ve been grappling with for years. It would take months of sustained growth to ease the supply crunch. And right now, that appears beyond the horizon.
Even so, we seem to be moving toward a more balanced real estate scene here in the San Francisco Bay Area. The housing market of 2023 could be a bit more buyer-friendly, with more homes to choose from and a less frenzied pace of sales activity.
How Inventory Growth Could Be a Game-Changer
If the Bay Area housing market continues to see inventory growth, it could be a game-changer when it comes to negotiating leverage. Buyers could gain more leverage for a change, as homeowners find themselves competing against a growing number of sellers.
During the latter half of 2020, and through all of 2021, home sellers within the Bay Area real estate market had the upper hand. All they had to do was list their properties and wait for the offers to pile up. But that’s beginning to change.
According to a recent Bloomberg article: “Bay Area homes are taking longer to sell and bidding wars are less intense, leading to a smaller share of sales above listing prices…”
If the housing market inventory situation continues to improve, with more homes becoming available, bidding wars could become a thing of the past in cities all across the region.