Could a slowdown be underway in the Bay Area?

Dive Brief:

San Francisco's housing market has now cooled to one of the country's slowest growing markets, according to The Wall Street Journal. The metro area notched only a 5% rise in home prices in April, compared to the 5.5% national increase, trailing markets like Boston, San Diego, Phoenix and Las Vegas.
The deceleration can be attributed to a slowdown in employment growth — partially triggered by an ebb in the area's tech sector — and a lack of demand from would-be buyers who don't want to, or are now unable to, afford high home prices. An uptick in new apartment development has also dissuaded potential buyers from the homeownership market.
Bay Area home sales have also dipped to levels not seen since the recession. Sales in February dropped off 3.5% from the year-ago period, putting those figures at their lowest recorded levels since 2008. The month was 12.5% behind 2015's sales.

Dive Insight:

The slowdown in San Francisco's housing market comes as the area grapples with population growth driven, in part, by the region's tech industry, which is still growing even though the pace has slowed. Meanwhile, a stringent regulatory environment challenges developers' ability to keep up with that demand for housing. California, as a whole, would need to add 180,000 new homes yearly to make up for its existing inventory deficit, though the state is currently producing less than half that figure.

While Los Angeles has recently earned itself the title of the most unaffordable housing market in the U.S., cities like San Francisco and San Diego are not far behind. Homeowners in San Francisco and Los Angeles will spend a greater proportion of their income on monthly mortgage payments than will owners in other U.S. markets. San Francisco owners spend just under half of their income (40.2%) on such payments. In Los Angeles, the figure is slightly higher at 46.8%.

The Bay Area isn't the only place feeling the heat from soaring home prices. A March report from ATTOM Data Solutions found that, at the county level, one-quarter of U.S. housing markets were less affordable during Q1 2017 than they have historically been for that period.

In turn, homebuyers may be starting to fan out from major metros in search of more affordable markets across the U.S. A separate ATTOM report found Colorado Springs, CO, Charleston, SC, and Raleigh, NC, were among the top markets for homebuyers preparing to move in Q1. San Francisco, on the other hand, had the smallest share of buyers gearing up to move. Meanwhile, those within higher-priced markets like San Francisco, New York and Seattle were more likely to move farther from urban centers into more affordable counties within that region.