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Firm: N. Calif home sales drop 23 percent in July

August 19, 2010 8:47:32 PM PDT
A bleak new snapshot of the local economy tonight: *every county in the bay area* recorded a "double-digit decline" in "home sales," for the month of July.

Here is a bleak snapshot of the local economy -- every county in the Bay Area recorded a double-digit decline in home sales for the month of July. Sales were down 23 percent from a year ago, making it the worst month of July in 15 years.

Cuong Nguyen is trying to sell his custom-built home in San Jose. After just two weeks, he lowered his asking price to $899,000 to lure a buyer.

"If you put the house up for sale, then you want to sell it and move out right away, right? But waiting two weeks is kind of frustrating," says Nguyen.

Nguyen is not alone. The home sale numbers from DataQuick are brutal. In July, 6,773 homes sold in the nine county Bay Area region. That's a dramatic 19 percent drop from the month before.

Real estate agents say some of the pullback can be blamed on the federal tax credit expiring, but many say the bigger issues are a lack of money and confidence.

"It's the economy. It's the job market. It's hard to feel hopeful when you're not sure you're going to have a paycheck," says Cherie Colon from Windermere Silicon Valley Properties.

Not even record low mortgage rates hovering near four percent enticed buyers. The CEO of The Loan Source, Rick Soukoulis, says that may in fact have temporarily stalled activity.

"I think you've just had a drop in rates and when rates drop like this, people tend to sit on the fence until they think they've stopped dropping," says Soukoulis.

What is fairly stable are home prices.

DataQuick reports the median Bay Area home sold for $402,000. That's down 2 percent from June but up 2 percent from a year ago. As for home sales, there is a lot of interest in what the next couple of months will bring.

"It looks like a lot of buyers are back from vacation and I can actually sense a little more activity. We still have to see how they translate into actual closed transactions," says Association of Realtors president Karl Lee.

Nguyen is hoping to see a little more of that foot traffic in the weeks ahead.


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