Bay Area home prices fall 41 percent

November 20, 2008 5:53:47 PM PST
Foreclosures have brought a mixed blessing to the Bay Area housing market. Homes are selling at the fastest pace in nearly a year and a half.

But the median price of Bay Area homes dropped 41 percent to $375,000 -- leaving them down more than $250,000.

In Contra Costa County, foreclosed homes typically sell at a discounted rate and that is a big reason why home sales are way up.

John Bockmon bought his 5,000 square foot home in Pleasant Hill for $825,000. It was a foreclosed property that sold for $1.2 million only three years ago.

"I'm happy. This is a house that I'll always live in now," said Bockmon.

Bank-owned homes are everywhere in Contra Costa County and they are selling fast. Sales are up almost 87 percent compared to last year, in large part because the median price has dropped dramatically, down 46 percent to under $300,000.

Such deals are even more prevalent in East Contra Costa County. Homeowners who are staying put say it's a painful process to watch.

"It plays a little bit on your psyche a little bit, because you know you're upside down and you paid so much more, perhaps double in some cases for what these folks are buying or at today's price. But that's the chance you take when you invest I guess," said Brentwood resident Tim Russell.

Homeowners have been advised to ride it out. But now, realtors are telling people they might want to hold on to their properties -even longer- before they decide to sell.

"The National Association of Realtors, it's funny, we have to keep going along with how the market is changing. Now before they had said spring of 2009 and now we are looking at a year past that so we're really looking at 2010 now," said Darrell Garrison from Prudential California Realty.

Which means this buyer's market could be around for quite some time.

Bockmon warns while there are many bargains out there, buyers still need to do their homework.

"You've got a worry about are there liens against the house, what damage did they do to the house, there are so many things that foreclosures unfortunately come with that you got to worry about," said Bockmon.

The situation in Contra Costa County is happening throughout the entire Bay Area.


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