Housing markets seeing the most turmoil are located in Contra Costa County, Napa County, and Solano County, but virtually no market in the...
Housing markets seeing the most turmoil are located in Contra Costa County, Napa County, and Solano County, but virtually no market in the...
View Housing Market Watch RSS feedSlow home sales, rising foreclosures, and falling prices continued to plague the San Francisco Bay Area throughout the month of May. Housing markets seeing the most turmoil are located in Contra Costa County, Napa County, and Solano County, but virtually no market in the nine-county region has experienced improvement since the bust.
As expected, the San Francisco Bay Area housing market was unable to shake off indicators of market distress during the month of May. Homes again sold at the slowest pace in 12 years, and fell 18.7% in a year over year comparison.
A total of 8,080 houses and condos (both new and resale) were sold in the Bay Area compared to 9,935 one year ago, and 10,186, which is the normal average for May. Every county within the nine-county region-with the exception of Marin County-experienced a double-digit decline in a year over year comparison.
The median home price also fell in some counties, according to reports by real estate information provider DataQuick Information Systems. The worst price declines were seen in Sonoma County, where median prices fell 5.4% compared to the previous May, and in Solano County, where prices declined 4.4%.
| County | Median Price May 2006 | Median Price May 2007 | % Chg |
|---|---|---|---|
| Alameda | $599,000 | $587,750 | -1.9 |
| Contra Costa | $585,000 | $590,000 | 0.9 |
| Marin | $815,000 | $850,000 | 4.3 |
| Napa | $555,000 | $627,500 | 13.1 |
| San Francisco | $770,000 | $835,000 | 8.4 |
| San Mateo | $765,000 | $807,000 | 5.5 |
| Santa Clara | $690,000 | $713,500 | 3.4 |
| Solano | $455,000 | $435,000 | -4.4 |
| Sonoma | $549,000 | $519,500 | -5.4 |
| Entire Bay Area | $638,000 | $660,000 | 3.4 |
Source: DataQuick
Even with the drops in several counties, DataQuick reported that there was still an overall median price increase in the Bay Area of 3.4%. While this increase makes it appear as though home values are moving up in spite of low sales and other problems within the Bay Area market, it should be noted that this is not necessarily the case.
The median price is not an average of asking prices, it is simply the median, meaning that half of the homes sold above the median while half sold below. Because homes are selling at a much slower pace in the low end of the market versus the high end of the market, the median automatically increases. This, however, does not mean that home values or asking prices are rising.
According to the most recent MLS data compiled by ZipRealty, asking prices have actually been reduced in 20% to 50% of Bay Area neighborhoods. In Orinda (located in Contra Costa County) for example, asking and sales prices have been reduced by some 7% in the last year alone. But, according to the median price model used by DataQuick, prices have risen 0.9% in a year over year comparison.
| # Sold May 06 | # Sold May 07 | % Change |
|---|---|---|
| 9,935 | 8,080 | -18.7 |
| # Sold April 07 | # Sold May 07 | % Change |
|---|---|---|
| 7,447 | 8,080 | 8.5 |
May is usually one of the better months for home sales in the Bay Area. There was an increase of 8.5% in the number of homes sold this month versus last month, but sales were still down 18.7% in a year over year comparison.
| County | May 06 Sales | May 07 Sales | % Chg |
|---|---|---|---|
| Alameda | 1,986 | 1,631 | -17.9 |
| Contra Costa | 1,938 | 1,366 | -29.5 |
| Marin | 355 | 359 | 1.1 |
| Napa | 174 | 112 | -35.6 |
| San Francisco | 691 | 616 | -10.9 |
| San Mateo | 855 | 763 | -10.8 |
| Santa Clara | 2,496 | 2,179 | -12.7 |
| Solano | 763 | 476 | -37.6 |
| Sonoma | 677 | 578 | -14.6 |
Source: DataQuick
For the 28th month in a row, year over year home sales fell in the Bay Area. The slowest markets were in Solano, Napa, and Contra Costa, but no market-with the exception of Marin County-performed well.
| Month / Year | Unsold Inventory Index |
|---|---|
| April 07 | 3.5 months |
| April 06 | 2.9 months |
| April 05 | 1.6 months |
The 'Unsold Inventory Index' is a tracking system used to determine how many months it would take to sell off a specific area's inventory of unsold homes. According to the most recent numbers released by the California Association of Realtors, home inventory has risen steadily in the Bay Area for the last three years, creating 3.5 months' worth of backlog.
| Area | 1 Bdr Rent May 06 | 1 Bdr Rent May 07 | % Change |
|---|---|---|---|
| Napa | $845 | $856 | 1.3 |
| Oakland-Fremont | $1,045 | $1,055 | 0.9 |
| San Francisco | $1,227 | $1,239 | 0.9 |
| San Jose-Sunnyvale | $1,059 | $1,068 | 0.8 |
| Area | 2 Bdr Rent May 06 | 2 Bdr Rent May 07 | % Change |
|---|---|---|---|
| Napa | $1,098 | $1,112 | 1.3 |
| Oakland-Fremont | $1,238 | $1,250 | 0.9 |
| San Francisco | $1,536 | $1,551 | 0.9 |
| San Jose-Sunnyvale | $1,273 | $1,284 | 0.8 |
| Area | 3 Bdr Rent May 06 | 3 Bdr Rent May 07 | % Change |
|---|---|---|---|
| Napa | $1,519 | $1,538 | 1.3 |
| Oakland-Fremont | $1,679 | $1,695 | 0.9 |
| San Francisco | $2,051 | $2,071 | 0.9 |
| San Jose-Sunnyvale | $1,831 | $1,846 | 0.8 |
Rents, for the most part, stayed the same during the month of May. According to the most recent reports, the cost of renting is approximately 1/3 of the cost of buying within the Bay Area.
| County | Q1 2006 | Q1 2007 | % Chg |
|---|---|---|---|
| Alameda | 564 | 1,578 | 179.8 |
| Contra Costa | 605 | 1,989 | 225.5 |
| Marin | 76 | 118 | 55.3 |
| Napa | 47 | 88 | 87.2 |
| Santa Clara | 527 | 1,058 | 100.8 |
| San Francisco | 129 | 216 | 67.4 |
| San Mateo | 186 | 382 | 105.4 |
| Solano | 294 | 914 | 210.9 |
| Sonoma | 157 | 407 | 159.2 |
Foreclosure activity is up everywhere in the U.S., and the Bay Area is no exception. The number of defaults has more than doubled in most of the areas in the nine-county region.
| Total Foreclosures May 2006 | Total Foreclosures May 2007 | % Chg |
|---|---|---|
| 11,204 | 39,659 | 353.97 |
California currently has more foreclosure filings than any other state. Activity, which includes notices of default, auction properties, and REO properties, has more than tripled over the last year alone.
The Bay Area housing market did not improve or bottom out during the month of May. Looking at sales totals, foreclosure numbers, and other statistics, it is safe to say that the depressed conditions will most likely continue into the summer months.
With foreclosure activity on the rise, it is also likely that more homes will flood the market and drive down prices throughout 2007. This activity could create problems that last long into 2008.
'Such strong activity in the midst of the typical spring buying season could foreshadow even higher foreclosure levels later in the year,' said CEO of RealtyTrac James Saccacio in a recent press release.
To view previous Bay Area Housing Reports, click on the links below:
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