Home sales plunge, prices flat
Author: Skia
Category: Real Estate
The Bay Area home market continued to seek equilibrium in October, as prices stayed flat and the number of homes sold hovered at five-year lows, according to a report released Wednesday.
The median price for all homes in the nine-county region, including resale homes, condos and new homes, remained at $614,000 — the same as in October 2005. A total of 7,979 residential properties changed hands, down 24.1 percent from the 10,508 sold during the same month last year, according to DataQuick Information Systems, a real estate reporting service. It was the lowest number of October sales recorded since 2001.
Most residences sold are existing single-family homes. In that category, 5,328 homes were sold, down 23.8 percent from the same month last year. The median price edged up 1.4 percent to $653,000 from $644,000 in October 2005.
“Basically it was just a hold-steady month,” said DataQuick analyst Andrew LePage.
“We had a huge shift this year in the supply of homes for sale and the level of demand. It’s clear there’s less demand. Many buyers who are out there and interested are on the sidelines waiting to see if prices will fall more.”
Those buyers who do plunge in are finding that the market is still competitive, but no longer the frenzied free-for-all that characterized the price run-up.
Julie Davidson Rocherolle and husband Narendra, both technology executives, have been looking for a house in Mill Valley for about a year.
Early on, they got caught up in bidding wars and “had our heart broken twice,” with unsuccessful offers, she said. Rocherolle said the calmer market helped them finally land a three-bedroom home, which they closed on last week.
“We’d been patiently waiting for a year and things were nutty for the first nine months of that,” she said. “Within the past six weeks, we felt that sellers were a little more nervous. We noticed that more-expensive homes were staying on the market for longer.”
The couple, who are first-time home buyers, were up against just one other bidder this time. They ended up paying 5 percent over the asking price for their home, which sold for more than $1 million. Marin County’s median price was $915,000 in October, up from $914,000, or just 0.1 percent, since October 2005.
Resale condos paralleled the trend of resale homes throughout the Bay Area. The median price declined 0.2 percent to $489,000. The number of sales fell 29.9 percent to 1,416 from 2,019 a year ago.
Peter Susskind recently experienced the San Francisco condo market from both sides.
As a seller, he accepted an offer for his one-bedroom Potrero Hill condo just below his asking price. It sold for $495,000, $4,000 shy of what he had asked.
“I have bought and sold properties in this country for 25 years,” said Susskind, who is from England. “After a month or so, properties get stale and the agents don’t want to bring their clients around. They’re waiting for the price to drop. It was a very good offer and it came before I had to start thinking about dropping the price.”
But as a buyer, Susskind still had to compete against other bidders. He wound up paying $740,000 for a three-bedroom condo, also in Potrero Hill, that was listed for $699,000. He is in the process of closing.
“I’ve been watching closely for the last year, and while things have certainly cooled down a bit, prices are really not going down very much at all,” he said.
New homes, which include condos, condo conversions and detached homes, experienced the biggest price decline, down 7.9 percent for the Bay Area as a whole.
In Contra Costa County, even though the number of new homes sold bounced up 9.5 percent to 472, the median price fell 20.5 percent, to $570,000. New-home prices in San Mateo, Napa, Solano and Sonoma counties also suffered double-digit declines.
DataQuick’s LePage said he sees Sonoma and Napa counties as the most vulnerable to price erosion, although because they are small markets, it’s harder to extrapolate from the numbers. Sonoma’s resale home price was down 5 percent for October, the fourth month in a row it has sunk.
But overall, the Bay Area seems to be as steady as one could expect in a down market.
“We still don’t see anything that says the Bay Area market is tanking,” LePage said. “We see a lot that suggests it is flattening out. Some (areas) will see erosion in value, but so far it has been modest.”
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