NorCal median home price down 46 percent

March 19, 2009 11:40:02 PM PDT
This is no time to be selling Bay Area real estate. DataQuick reported Thursday that the median price of a home has fallen from nearly $550,000 last year, to $295,000 now - the lowest in ten years.

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But mortgage rates, now averaging less than 5 percent, continue to fall, and there has been a 26 percent increase in home sales.

The time was finally right for first-time homebuyer sandy meyer. Meyer had been looking at homes for six months. She is in escrow on a 1,800 square foot bay point home for $270,000. The same house last year would have sold for as much as $500,000.

"I don't have to do much work at all on this house, I'll be able to move into it with just a little bit of paint and a few little things," Meyer said.

Meyer's experience illustrates all that is right and wrong with the Bay Area housing market, where prices have plunged to 10 year lows.

The drop is especially dramatic in foreclosure-fueled Contra Costa County. In just one year, the median home price fell from $450,000 to just $216,500, a 52 percent free fall. At the same time, sales jumped 70 percent.

Realtor Jenette Cope had nine offers on a bank-owned El Sobrante home, priced at $209,000.

"Five of them were first-time homebuyers, so I think it's great for that reason because at least now you can buy a home and pay it off in 30 years, whereas before you would buy a home and there's no way you could pay it off with those interest only type of loans," Cope said.

Those looking to borrow may find the market easing a bit after the Federal Reserve pumped $1 trillion into mortgage securities. The move sent interest rates plummeting.

"Yesterday morning we were right around 5 percent on a 30-year-fixed-rate loan; yesterday afternoon and this morning you can obtain low fours, four and a quarter, four and a half percent on a 30-year-fixed-rate mortgage, Scott Simonich of BWC Mortgage Services said.

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