TheMReport

TH E M R EP O RT | 51 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST LOCAL EDITION LOCAL EDITION DATA The Bay Area Isn't So Hot Anymore SLOWDOWNS IN THIS MARKET MAY SIGNAL GOOD NEWS FOR HOME AFFORDABILITY. CALIFORNIA // There are signs of the housing market cooling, at least in some parts of the Bay Area. This is something Trulia sees as good news for would-be buy- ers who've spent the past several years watching low inventory and escalating prices push them further from affordability. But it's not hap- pening across the entire region. Trulia looked at nine counties in the Bay Area to see which are still heating up and which are cooling down. The region's stalwarts—San Francisco, San Jose, and Oakland—still have the highest median home values in the country, at $1.39 million, $1.29 million, and $766,866, respectively. However, runaway price ap- preciation is plaguing cheaper enclaves that border some of the most expensive and affluent cities in the Bay, Trulia reported. That's especially true in North Fair Oaks and East Palo Alto, which logged appreciation rates of 32 percent and 25 percent, respectively, over the past year. That's about double the 14.4 percent price appreciation for home values in the rest of San Mateo County, the report stated. However, there are cooling pockets in North and East Bay. "Homes in Napa County, valued at $665,000, are worth less than half the homes in San Francisco," the report stated. "Homes in Sonoma, Contra Costa, and Solano counties are even cheaper, at $642,400, $624,700, and $432,200, respectively." There's a similar dichotomy with the median days on market in the past year. According to the report, homes in Napa spend 62 days on the market. In Vallejo, it's 50 days. Both compare to San Francisco's 40. Still, even in San Francisco, Trulia saw signs of cooling. According to the report, homes in the Russian Hill and Telegraph Hill neighborhoods saw their days on market fall about 11 days over the last year. But that still puts their median days above 50. "A drop in net migration also indicates a possible slowdown," the report stated. "Until recently, all of the Bay Area metros saw more people moving in than moving out in a post-recession job boom." However, in the last few years, that trend has either slowed or reversed. And a decline in net migration could translate into less demand for Bay Area housing, Trulia reported—maybe even a sta- bilization or actual drop in prices. The Great Migration of 2018 REDFIN EXAMINES WHY HOMEOWNERS ARE RELOCATING TO OTHER MARKETS CALIFORNIA // With mortgage rates rising in tandem with inter- est rates, affordability problems continue to be a serious issue for the industry—and an issue that in some markets is only getting worse. This is especially true in the priciest metro areas, leading potential homeowners to seek a home elsewhere, often states away. An analysis by Redfin, a real estate brokerage, analyzed a random sample of more than 1 million of its website's users across 80 metro areas for the period lasting from July through September 2018. The major fact highlighted by the analysis is the accelerating trend of homebuyers who seek to flee metro areas, which in the last few years have seen prices soar. Driven by high costs and in search of something practical, these prospective homebuyers are targeting the South as well as the middle of the country for their next home. A total of 25 percent of Redfin's users in Q 3 2018 sought a home outside their current metro area, 3 percent- age points higher than the same quarter last year. San Francisco; New York; Los Angeles; Washington, D.C.; and Denver were the five metro areas that saw the highest netflow out, a number calculated by how many people were looking to leave the metro area minus how many were planning to move in. Nearly 22 percent of San Francisco Bay Area residents looking to move are searching elsewhere, up 4 percentage points from last year. The majority of these San Franciscans are heading to Sacramento and Seattle, whereas Portland is taking in a greater percentage of Bay Area residents than anyone else. More than a third of New Yorkers (34 percent) want to leave the city, a number that has remained the same as it was last year. A large number of these New Yorkers are hoping to end up in Boston, but sizable numbers could very well alter demograph- ics in other metro areas like Atlanta, San Diego, Miami, and Nashville. Denver has moved steadily up the list, having debuted on the top-10 areas with greatest outflow only in Q1 2018. In Q2, Denver dropped to sixth and now finds itself in fifth place. A year ago, 17 percent of those living in the Denver area looking to move were planning on going elsewhere; that number has now increased to 24 percent. Of these, a little less than a quarter plan on remaining in the state, relocating to either Colorado Springs or Fort Collins. The states with the highest net flows in are Florida, Texas, and Tennessee, but the specific metro areas seeing the biggest inflows are Sacramento, Atlanta, Phoenix, and Portland. All are big cities where employment prospects are favorable and home prices still relatively affordable—at least in comparison to the areas they are fleeing. Median house prices in the regions seeing the greatest net inflow average around $150,000 less than the regions with the greatest net outflow.

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