Did the SF Bay Area market just turn?

[Chris Jones]

Over the past few weeks I have begun to get the sense that the San Francisco Bay Area market may be turning a corner. I have very little data to back up my feeling, and I am certainly not a market timing expert, so I wanted to reach out and see if others had a similar sentiment. I am personally interested most in the San Jose and Oakland markets, but I assume that any shift would be affecting the surrounding bay area.

Here's what I have seen:

1. Bay area rents and real estate values have risen at an incredible pace over the last few years, and it can't go up forever.

2. A recent Marcus & Millichap apartment webinar mentioned that the length of the current growth cycle has already exceeded the length of the prior growth cycle.

3. There are interesting discussions on BP questioning if we're in a bubble.

4. The stock market has fallen dramatically in the past two months, partly in response to the news of the Chinese economic slowdown. Walmart reported poor earnings. Oil has plummeted. In the past few months there have been an abundance of "experts" claiming there were many bad omens being exhibited by the market. Some people believe the stock market is a leading indicator for the real estate market. 

5. The PropertyRadar CA real property report showed sales and median prices are both down in August.

6. Apartment rents in San Jose and Oakland seem to have dropped significantly in the past few weeks/months. I spoke with one investor with properties in San Jose who said she had to drop asking rents by $300 in the past few months. Another conversation with an investor in Oakland expressed a similar sentiment. I have seen this as well when looking at rents on CraigsList.

Perhaps what I have sensed is merely a cyclical slowdown as we head into winter. All of the points above are up for debate/interpretation, but taken together, it makes me wonder which phase of the cycle we are really in.

Has anyone else sensed the same feeling? Do you have any data that supports your view?