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Firm: Northern Calif. home sales dip sharply

November 18, 2010 6:22:59 PM PST
The recovery in the Bay Area home market hit a snag last month, both in terms of sales numbers and prices, which had been climbing. According to DataQuick, the median home price in the Bay Area is now $383,000, down 1.8 percent from the median price in October 2009.

Sales are falling and so are prices in the Bay Area housing market. According to DataQuick, just over 6,100 homes closed escrow in October, down 23 percent from the same month last year.

"I think that buyers are still hesitant to buy, seemingly they still think that prices are going to drop and they're waiting," Tracy Tilin McKendell, a realtor in Oakland's Montclair district, said.

Median prices have dipped in many Bay Area counties compared with 2009. The biggest drop came in Napa County, where prices fell 15 percent. Prices in Contra Costa and Sonoma counties dropped 7 percent. Prices were up in only two counties -- Santa Clara and Sonoma.

According to DataQuick, the expiration of home buyer tax credits, lack of job growth and concerns about the economy are keeping buyers on the fence.

Mortgage broker John Holmgren thinks buyers waiting for prices and interest rates to fall further may be making a mistake.

"I happen to think that perception is incorrect because of steps the Fed is taking to stimulate the economy, that's going to result in rising rates and rising inflation, including home prices," he said.

Alison Roessler is not waiting. Roessler's looking to jump into the real estate market for the very first time.

"I made a deal with myself about five years ago when I moved here from Oregon that I didn't want to rent for more than five years," she said. "Housing prices are good right now, everything's down. Interest rates are good, so I decided it's time to start looking."

Distressed properties still a big part of the Bay Area housing market. In October, foreclosure re-sales made up 30 percent of area's housing re-sales, up a bit from September, but much lower than the peak in February 2009 when foreclosures re-sales made up 52 percent of the market.


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