For several years, real estate markets on the West Coast have been thriving sellers’ markets. In recent months, markets indicators point to signs that these previously hot markets are starting to cool.
Market Indicator: Inventory Is Increasing
After years of low inventory, the number of homes available for sale in West Coast cities is growing. As of February 2019, major West Coast markets experienced dramatic year-over-year increases in inventory. Supply in Seattle has jumped to 101 percent while San Jose inventory has gone up 82 percent. In Portland, inventory has risen 37 percent.
Market Indicator: Homes Are on the Market Longer
For the first time since 2015, the number of days homes spend on the market is going up. Year-over-year figures for January 2019 show that homes are on the market much longer in several West Coast cities. Median days on the market have increased from 15 days in January 2018 to 47 days in 2019 in Seattle. Homes in San Jose are up to 45 median days on the market which is up from last January’s 12 days. The year-over-year increase in Portland went from 28 days to 50 days.
Market Indicator: The Number of Real Estate Transactions Is Declining
The number of real estate transactions has decreased throughout the West Coast. In Los Angeles County, the number of home sales in January 2019 was down 15.8 percent from the previous year. San Francisco County saw an 18.5 percent drop in homes in January 2019 in comparison to January 2018. The same county experienced a 34.4 percent plunge in homes sales from December 2018 to January 2019. In December 2018, San Diego County saw its fewest home sales since 2007.
Market Indicator: Bidding Wars Are Less Common
While frenzied bidding wars commonly accompanied last year’s home sales, West Coast real estate markets have seen a dramatic dip in multiple offers this year. Year-over-year data from January 2019 shows that home receiving multiple offers have plummetted in comparison with the same month last year. While 69 percent of Seattle home transaction involved multiple offers last January, a year later that figure plunged to 15 percent. San Francisco has seen multiple offers drop from 82 percent to 18 percent. Bidding wars in Los Angeles have dived from 73 percent to 16 percent.