by Broderick Perkins
© 2007 DeadlineNews.Com
Deadline Newsroom – San Francisco Bay Area home sales plummeted so far in September, sales were at a level not seen since at least 1988 and the high-tech, high-priced Silicon Valley region saw sales slip the lowest level since 1984.
The record level sales slumps, blamed on tight mortgage market money worsened by high home prices, comes even as prices continue to rise in two of the area's largest counties, as well as in two smaller counties.
"A lot of escrows just didn't close in September because the buyers couldn't get financing. Some of those sales might close this month or next, but many of the deals are going to be put on hold or die on the vine. Jumbo financing has become more available in the last few weeks, but lenders are being more cautious than before, and the loans cost more," said Marshall Prentice, president of La Jolla, CA-based DataQuick Information Services .
DataQuick said the 5,014 new and resale houses and condos sold in the nine-county Bay Area in September was down 40.1 percent from 8,374 in September 2006, the lowest ever since the company began keeping records in 1998. Prices overall, on average, were up 0.8 percent.
Meanwhile, Silicon Valley (Santa Clara County), the area's most populous county, saw transactions slip from 1,986 to 1,235, a 37.8 percent decline. Prices were up 3.7 percent, according to DataQuick.
When only resale single-family homes were considered in Silicon Valley, the 521 closed transactions (down from 887 a year ago) represented the smallest number of transactions in any month since June of 1984, according to Richard Calhoun, real estate broker with Creekside Realty in San Jose and publisher of the Bay Area Real Estate Market Newsletter. The report is comprised of statistics from the area's multiple listing service, the Northern California Real Estate Exchange (NCREX) of Campbell, CA.
"There were 571 transactions in February of 2001, going into the 2001 slow down. Next was 586 in October, 1989 which was the month of the Loma Prieta Earthquake (October 17, 1989, preceding a major slowdown). Volume was lower in September 2007, than it was in September 2001 (when on September 11, terrorists attacked the nation, preceding another major slowdown)" said Calhoun.
Existing single-family homes sales were down 38.6 percent from 887 a year ago. Existing condo sales came in at 222 in September this year, down nearly 42.5 percent from last September, Calhoun reported.
The median price of resale single-family homes in Silicon Valley came in at $850,000, down from higher levels earlier this year, but up 10.5 percent from $769,000 in September last year. The median condo price came in at $525,000, also down from higher prices this year, but up 6 percent from $495,000 a year ago, Calhoun reported.
The increase in median prices reflected a greater share of the sold market going to higher-end, more expensive homes rather than any real increases in home values.
Reflecting the impact of the harder hit new home market on Silicon Valley's prices, when new, existing, single-family and condos were considered, prices rose only 3.7 percent (the greatest increase in the 9-county area) over the year as sales slipped 37.8 percent, according to DataQuick.
DataQuick also revealed a 1.9 percent year-to-year median price increase in San Francisco, as sales fell 17.3 percent -- the area's smallest home sales decline.
Other counties in the Bay Area with an increase in the median home price included Marin County, up 1.6 percent as sales fell 32.5 percent and Contra Costa County where prices were virtually flat, up only 0.2 percent, as sales fell 48.7 percent from September to September.
Contra Costa County revealed the greatest sales decline and Solano County revealed the greatest median home price decline, down 10.9 percent as its home sales plummeted by 47 percent.
Other big losers were Napa County, where sales were down 47.3 percent and prices fell 10.8 percent; Alameda County, where sales dropped 43.9 percent and prices were down 5.3 percent; and Sonoma County, where sales fell 35.7 percent and prices were down 5.7 percent.
San Mateo's prices were flat, not moving at all as sales dropped 34.1 percent, according to DataQuick.
There was some indication some buyers were taking advantage of bargains on second homes and rental properties as DataQuick said non-owner occupied buying activity had increased in the Bay Area.
Otherwise, market distress was evident in record-level foreclosure activity and in the reduction of adjustable rate mortgage (ARMs) and multiple mortgages financing.
Also, flipping rates were flat.
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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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