Despite all the new wealth created by tech IPOs in 2019, home prices in the Bay Area are stagnating at potentially dangerous peaks.
According to real estate firm Compass, the median price of a home in San Francisco rose 1.3% Y/Y to $1.6 million, the smallest growth since 2012.
Compass said the median price for homes in Santa Clara County, which includes San Jose, Santa Clara, Cupertino, Palo Alto, Sunnyvale, Stanford, and Santa Clara, collectively saw 6% declines to $1.26 million.
Last spring, CNBC was drumming up the narrative that tech IPOs, including Uber, Slack, Pinterest, and Zoom Video Communications, would boost the housing market with new buyers. However, many of the IPOs went bust last year and didn’t create a new buyer pool as home prices are at danger of reversing from record-high levels.
The S&P CoreLogic Case-Shiller San Francisco Home Price NSA Index shows that the average change in the value of the residential real estate in the region has been slipping since July 2018.
After a seven-year tech party and the Federal Reserve injecting obscene amounts of liquidity into the market to fuel bubbles -- it seems that Bay Area home prices could have hit a structural high. This means a correction could be nearing.