Home prices in the San Francisco Bay Area rose in May but sales were muted as the red-hot market showed signs of normalizing.
The median sales price in the nine-county region increased 1.1% from April to $617,000, research firm DataQuick said Thursday. Prices climbed 18.9% — the smallest gain in 19 months — compared with a year earlier.
Buyers scooped up 7,898 homes last month, 4.5% more than in April. That was a drop from the long-term average of a 7.2% rise and, compared to May 2013, sales fell 7.5%.
A booming technology industry has supercharged the Bay Area housing market recently and the median price is now higher than any point since November 2007. Still, there were some signs in May that the torrid pace is decelerating.
Price gains slowed, while investor purchases and all-cash deals fell from a year earlier.
“Virtually all the technical indicators are pointing in the direction of more market normalization,” DataQuick analyst John Karevoll said in a statement. However, he called the rate of that change “pitifully incremental.”
Regional home prices are on pace to surpass their pre-recession peak this summer, Karevoll said. They've already done so in San Francisco and Santa Clara counties.
Sales of foreclosed homes continued to decline in May. Such deals accounted for just 3.1% of all resales last month, compared with 6.5% a year earlier.
Buyers also purchased more homes than a year earlier with jumbo loans and adjustable-rate mortgages — important financial tools in the expensive Bay Area.