Thursday, December 27, 2007

SF Bay Area's Deep Freeze

Lower prices in the San Francisco Bay Area may be having a warming effect on the sales freeze that's hit the area this year.

by Broderick Perkins
© 2007 DeadlineNews.Com

Deadline Newsroom - Lower prices in the San Francisco Bay Area may be having a warming effect on the sales freeze that's hit the area this year.

In November, home sales in the San Francisco Bay Area were at a two-decade low for the third month in a row, according to La Jolla, CA-based DataQuick, a real estate information company, tracks sales of single-family and condos in both the new and resale home market.

Home sales in the nine-county area where down more than 36 percent in November, compared to November last year. Home sales have decreased on a year-over-year basis for 34 consecutive months, DataQuick reported.

What's more, November 2007 was the slowest sales month in DataQuick's record books, which date back to 1988.

But the good news is that prices are holding. The median price paid for a San Francisco Bay Area home was $629,000 in November, up 1.5 percent from the median price a year ago.

Home prices continued to gain in Marin, Santa Clara (Silicon Valley), San Francisco, and San Mateo counties. Prices slipped in Alameda, Contra Costa, Napa, Solano and Sonoma counties.

However, in some areas, price declines appear to be generating more sales, especially in the new home market where buyers negotiate for bargains.

Hard hit Solano County, for example, suffered a median home price decline of nearly 15 percent in the past year, but new home sales are up nearly 19 percent in just one month, from October to November this year.

The high-cost San Francisco Bay Area market's major problem is its reliance upon jumbo-loan financing. The availability of jumbo loan financing has declined this year.

But there's also a silver lining in the jumbo loan market. DataQuick said the percentage of jumbo loan financing was up slightly for the first time since August. That's an indicator sales could tick up in more areas -- if the cost and availability of jumbo loans improve.

Jumbo loans are loans larger than the conforming loan rate of $417,000. Because of their larger size they can be more expensive and more difficult for which to qualify.

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© 2007 DeadlineNews.Com

Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

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