Valley home sales rise 43 percent last month over 2007; median price falls to $550,000
By Sue McAllister
Mercury News
Article Launched: 10/21/2008 10:34:36 AM PDT
Driven largely by buyers scooping up foreclosure properties, home sales in the nine-county Bay Area soared 45 percent last month compared with September 2007, the biggest jump in more than six years.
But the median price of the homes that changed hands fell substantially in Silicon Valley and elsewhere in the Bay Area, according to a report Tuesday from MDA DataQuick, and some economists predict the trend to continue into 2009.
Of the nine Bay Area counties, Santa Clara County landed in the middle of the pack last month, experiencing a less severe price decline and a less robust sales increase than some other counties.
Nearly one-third of the homes sold in Santa Clara County last month — and more than 40 percent of those sold in the Bay Area — had recently been in foreclosure.
The median price of the resale single-family houses in Santa Clara County was $550,000 in September, down 29 percent from a year earlier. A total of 1,116 resale houses sold in the county, 43 percent more than in September 2007.
In Contra Costa County, by comparison, median prices fell 50 percent while sales more than doubled compared with last year. But the steep increases are being compared with a dismal September 2007, which recorded the worst sales for any September in DataQuick's records.
Santa Clara County's September results were less dramatic than those of some other counties in part because its economy has remained relatively strong, said Christopher Thornberg of Beacon Economics.
"It's a higher-income area," and homeowners are "less overleveraged," he said, than in the eastern reaches of Contra Costa or Solano counties, for example.
Thornberg said he thinks Bay Area home prices will bottom out next year.
"Then it's going to sit there for a year or two or three," he said. "2012 is when we are looking for some recovery in housing."
DataQuick's report showed that in San Mateo County, the median price of resale houses fell to $650,000 in September, down 18.8 percent from a year earlier. The median price of Alameda County houses fell 33.3 percent to $400,000. In Contra Costa County, the median price of single-family houses plunged to $295,000, down 49.6 percent from September 2007.
Unfortunately for homeowners watching their equity shrink, the nadir of the market isn't here yet, said Sean Randolph, president of the Bay Area Council Economic Institute.
"Housing prices actually still have some way to go before they bottom out, but that varies by where you are in the region," Randolph said. He said the counties that experienced the biggest boost in sales are those where foreclosures are most significant. "Those are also the counties where you have the greatest density of homes where the amount of the mortgage is higher than the value of the house itself."
Jason Chan Lee of realty brokerage Silicon Valley REO has a different view of prices than the economists: He thinks they have already hit bottom in some parts of the valley.
"The interest level in South San Jose in low-end homes is extremely high. Prices have definitely bottomed out, because any good buy out there, you have multiple offers," which serve to drive the price up, he said.
"It's so easy to buy a house now, since the prices have dropped 50 percent-plus in some areas," he said.
Tuesday, he showed some clients a four-bedroom, bank-owned Alum Rock house that last sold for $732,000 and is now listed for $349,000. "You can't beat that," he said.
Nearly 42 percent of all resale homes sold in the Bay Area last month had been foreclosed upon at some time in the prior 12 months, according to the DataQuick report.
In Santa Clara County, for example, 30.5 percent of resales last month were of homes that had been foreclosed upon sometime in the past 12 months. Of the nine Bay Area counties, Solano County had the highest portion of such sales, at 67.9 percent, while San Francisco had just 9.5 percent.
In September 2007, just 6.9 percent of resales were previously foreclosed properties.
-Arlos
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