Home prices fall, sales rise in the Bay Area

October 15, 2011 12:38:05 AM PDT
People are buying more homes in the Bay Area than they did one year ago, and they're getting lower prices. The typical house on the market last month sold for $365,000, down 7.5 percent from last year.

One six-bedroom, six-bathroom Danville home went on the market in March for $1.098 million, but is now priced at $999,000. The seller paid more than $1.2 million six years ago.

Still, Contra Costa County real estate agent and analyst Vicky Nagy says single family homes at any level are not where prices have really plummeted.

"In our area, in single-family homes, we have stability and even some growth in the prices -- average and median prices," Nagy said. "We are hurting badly in the condos and townhomes."

DataQuick says the median home price in Contra Costa County in September was down 13 percent from a year ago. The median price then was $298,000; now the median price is $252,000.

Marin County dropped 10.5 percent from $702,500 to $628,400.

San Francisco County had the smallest drop with one percent, from a median of $620,000 to $613,750.

"It's jobs," Nagy said. "It all comes down to jobs and employment. If we had a situation where we did where people expected to retain their jobs and get a healthy increase and had job security, people would be more likely to want to buy a home."

Short sales, where the bank and homeowners have agreed to sell the house for less than what is owed, accounted for more than 20 percent of Bay Area home sales last year.

"Our agent told us there aren't a lot of bargains, and we're finding that's the case," home buyer Deb Nolan said.

Nolan and her husband are looking to buy in the Alameda and Contra Costa County areas. One three-bedroom, one-half-bathroom home in Dublin is a short sale with two lenders.

The Nolan's offer of slightly below list price was rejected, and Nolan was surprised.

"I figured that if banks are trying to get out from under the properties...that they'd be anxious to take them off their books," Nolan said. "I'm finding that's not the case, they still want as much money as they can get."

Last month, absentee buyers -- mostly investors -- bought a near-record 19.4 percent of all Bay Area homes sold. A former president of the California Mortgage Brokers Association said that's bad because the homes are not being occupied, and occupied homes bring stability to the market.

Homes still difficult to purchase for many homebuyers

Mortgage rates are at their lowest in years and home prices have dropped, but that doesn't mean it's easy to buy a home.

One townhouse on the top of a hill in El Sobrante is a bank-owned property on sale for $140,000. Real estate agent Swarn Munjal has a thick file of paperwork that was three months of work she put in to help her client buy the house.

"It took us three months, now its garbage," said Munjal.

Munjal said the bank found fault with the borrower one day before the home was to close.

"Banks are very tight. They don't want to give the money, if your credit is not that good and he paid 20 percent also. He put 20 percent down. Even then he didn't get the loan," said Munjal.

Munjal said condo and townhome prices have dropped more than single family homes. She also said those kind of prices have attracted investors who have cash, pushing out many family homebuyers who have to seek a mortgage.

"This time the prices are low, they are buying it, they're flipping it also. They buy a rundown house, fix it up, and put in on sale within three months," said Munjal.

DataQuick also reports that even with investors weighing in home sales were well below the average since 1988. It says the market is basically on hold.

ABC7's Tomas Roman contributed to this report.

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