Real estate continued to be a losing venture for many San Francisco Bay Area homeowners and housing market professionals during the month of July.
Real estate continued to be a losing venture for many San Francisco Bay Area homeowners and housing market professionals during the month of July.
View Housing Market Watch RSS feedReal estate continued to be a losing venture for many San Francisco Bay Area homeowners and housing market professionals during the month of July. Homes sold at the slowest pace since 1995, with the rate of sales falling throughout the nine county region with the exception of San Francisco. Median prices also dropped, with the biggest declines recorded in Solano and Sonoma Counties.
Like most of the markets across the U.S., the San Francisco Bay Area real estate market is clearly in the midst of a downturn. Home sales have slowed to a crawl, median prices are flat or dropping, and foreclosure activity is rising to heights that haven't been seen in years.
| County | Med. Price July 06 | Med. Price July 07 | % Chg |
|---|---|---|---|
| Alameda | $590,000 | $605,000 | 2.5 |
| Contra Costa | $575,000 | $599,000 | 4.2 |
| Marin | $779,000 | $887,000 | 13.9 |
| Napa | $598,000 | $614,500 | 2.8 |
| San Francisco | $775,000 | $799,000 | 3.1 |
| San Mateo | $770,000 | $800,000 | 3.9 |
| Santa Clara | $682,250 | $700,000 | 2.6 |
| Solano | $460,000 | $415,000 | -9.8 |
| Sonoma | $542,500 | $520,000 | -4.1 |
Source: DataQuick
According to DataQuick, median prices held steady for the most part in the Bay Area during the month of July, falling only in Solano and Sonoma Counties in year-over-year comparisons. The Office of Federal Housing Enterprise Oversight tells a different story, though, reporting that prices have fallen dramatically in the second quarter of 2007 as compared to the second quarter of 2006.
According to these numbers, home prices fell 3.3 percent in East Bay, 7.2 percent in San Joaquin County, 5.4 percent in Sonoma County, 4.2 percent in Solano County, and 0.9 percent in the San Francisco-San Mateo-Marin area. The only part of the Bay Area that saw a year-over-year increase was South Bay, and at 0.6 percent, the increase was quite modest.
| # Sold July 06 | # Sold July 07 | % Change |
|---|---|---|
| 8,476 | 7,423 | -12.4 |
| # Sold June 07 | # Sold July 07 | % Change |
|---|---|---|
| 7,964 | 7,423 | -6.8 |
For the 30th month in a row, home sales have decreased in year-over-year comparisons. July sales were again at the lowest point seen in 12 years, falling more than 12.4 percent across the Bay Area during the month of July when compared to the same time period last year.
| County | Sold July 06 | Sold July 07 | % Chg |
|---|---|---|---|
| Alameda | 1,665 | 1,577 | -5.3 |
| Contra Costa | 1,747 | 1,328 | -24.0 |
| Marin | 309 | 306 | -1.0 |
| Napa | 138 | 85 | -38.4 |
| San Francisco | 542 | 564 | 4.1 |
| San Mateo | 803 | 728 | -9.3 |
| Santa Clara | 2,059 | 1,910 | -7.2 |
| Solano | 645 | 408 | -36.7 |
| Sonoma | 568 | 517 | -9.0 |
Source: DataQuick
Home sales fell within every county in the Bay Area region, the only exception being in San Francisco where sales increased 4.1 percent. Solano County again demonstrated that this area is suffering the brunt of the slowdown as its sales fell sharply during the month of July. Other counties with double-digit decreases included Contra Costa and Napa Counties.
| Area | 1 Bdr Rent June 06 | 1 Bdr Rent June 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 June 06 | 2 Bdr Rent June 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 June 06 | 3 Bdr Rent June 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 |
Source: Hud.org
With the real estate market slumping, many Bay Area residents are sitting on the sidelines in hopes that prices will fall further. In the meantime, they are choosing to rent their homes. There have been reports of many homeowners who have chosen to rent as well, hoping that by selling now, they can avoid the rapid depreciation in home values that some experts are predicting. As a result, rental vacancy rates have begun to fall slightly. The lowest rate is in San Jose, where it has declined to 2.7 for the first time since 2001.
| County | Q2 2006 | Q2 2007 | % Chg |
|---|---|---|---|
| Alameda | 649 | 1,612 | 148.4 |
| Contra Costa | 725 | 2,316 | 219.4 |
| Marin | 58 | 118 | 103.4 |
| Napa | 47 | 128 | 172.3 |
| Santa Clara | 530 | 1,275 | 140.6 |
| San Francisco | 127 | 257 | 102.4 |
| San Mateo | 222 | 463 | 108.6 |
| Solano | 350 | 1,065 | 204.3 |
| Sonoma | 157 | 407 | 159.2 |
| Entire Bay Area | 2,910 | 7,696 | 164.5 |
Source: DataQuick
Quarterly data is the most recent foreclosure data available for the Bay Area. As you can see from the chart above, foreclosure activity increased by a significant 164.5 percent across the entire Bay Area, rising the most in Contra Costa and Solano Counties. According to DataQuick, foreclosed properties haven't drawn much attention from buyers, accounting for only 4.5 percent of all home sales in July. DataQuick analyst Andrew LePage says it is likely that foreclosures are pulling down home values in some areas, but as of yet, the trend is not rampant.
| Total Foreclosures July 2006 | Total Foreclosures July 2007 | % Chg |
|---|---|---|
| 10,010 | 39,013 | 289.16 |
Throughout the state of California, foreclosure activity continues to rise. RealtyTrac, an online foreclosure marketplace, recently ranked the top 100 metropolitan areas in terms of foreclosures based on the number of filings per household. Six metro areas in California ranked in the top 10 for the month of July. These areas include Stockton (No. 2), Merced (No. 3), Modesto (No. 4), Vallejo-Fairfield (No. 5); Riverside-San Bernardino (No. 8), and Sacramento (No. 9).
In the Bay Area, the Oakland (No. 19), San Jose-Sunnyvale-Santa Clara (No. 56), and San Francisco (No. 78) metro areas made the list.
*Foreclosure information in the above comparisons was obtained from two sources, DataQuick Information Systems (Bay Area Comparison) and RealtyTrac (California Comparison). Each organization claims that the other does not properly count foreclosures. Each organization also claims that its numbers are correct.
July was another rough month for the Bay Area real estate market, and things seem likely to get much worse before they get better. A lack of sales is starting to put downward pressure on prices. Increased foreclosure activity is doing its part to speed up property value depreciation as well.
More dismal sales are projected for the rest of the year, which means that, in theory, this is now a buyers market. But with prices still well out of range for most people in the area, sellers probably won't see a scramble for properties anytime soon.
Use the links below to view past Bay Area Real Estate Reports:
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Selling a home involves more than just finding a real estate agency and sticking a sign in the front of the yard. A lot of preparation is needed if a homeowner wants to sell their home, particularly if they are in a hurry to sell.
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