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Million dollar homes in Bay Area to feel the heat this year

Homes priced below $1.5 million seeing the most activity
  • Pacific Union expects cumulative price appreciation of 10 percent in the Bay Area during the next three years.
  • The $5 million and above housing market will be impacted to a lesser extent by stock market volatility.
  • Pacific Union's closed 16 percent more deals this January than last.

With the stock market down roughly 10 percent from last year and volatility expected to persist, homes in the Bay Area are forecasted to experience some softness, in terms of sales and pricing, later this year.The forecasted "softness," however, will not be uniform across all housing price tiers, according to Selma Hepp, economist for real estate firm Pacific Union, who notes the Bay Area is more sensitive to stock market-wealth effects than other parts of the country.Home sales activity in the $2 million and $5 million range is expected to be most impacted by stock market conditions."Preliminary data shows that homes priced below $1.5 million are seeing much more activity than homes priced between $2 million and $5 million," Hepp stated, adding homes in the lower price range are being buoyed by favorable mortgage interest rates, high demand among younger buyers and strong job growth. The Bay Area's technology sector is still growing at a more than 5 percent year-over-...

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