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Oct 17, 2006 8:39 pm US/Pacific
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Bay Area Home Prices Drop For 1st Time In 4 Years
SAN FRANCISCO (BCN / AP) ―
New real estate figures show that Bay Area housing prices declined last month for the first time in more than four years, a real estate research firm reported Tuesday.
Adding to a declining trend in the number of home sales, the price of an average Bay Area home has now fallen for the first time since the dot-com bust in 2002, according to DataQuick Information Systems.
The price of new homes fell 12 percent in September, which dragged down the Bay Area median price overall for new and resale homes and condos.
Statewide, eight major California home markets saw a drop in prices. Six of the eight counties to see declines are located in the San Francisco Bay area. Sonoma County saw the steepest drop at 7.7 percent.
The median price for a home sold in the nine-county San Francisco Bay Area was $611,000 in September. That was 1.5 percent less than in August, and 0.8 percent less than the September 2005 mark of $616,000.
A DataQuick analyst blamed the price drop on a build-up of inventory and an particular an increase in the supply of low-priced conversion condominiums—typically lower in cost than single-family homes— in the East Bay.
DataQuick also noted that the market typically goes into decline from August to September because of a shift in purchase patterns.
What was more remarkable to analysts, though, was the year-to-year decline in prices -- the first since March 2002, when the region weathered the collapse of Internet startups.
"This time around there isn't really any economic distress," the president of DataQuick, Marshall Prentice, said in a statement. "It simply looks like the real estate market's momentum last year and earlier this year pushed prices beyond their equilibrium point and the market is re-establishing its balance."
According to DataQuick, a total of 7,907 new and resale houses and condos were sold in the region last month. That was down 13.4 percent from the 9,128 sold in August and down 29.4 percent from September 2005, when 11,205 homes were sold.
Only two locales—San Francisco and Santa Clara counties—showed positive price gains over last year. In San Francisco, average home prices rose 3.5 percent to $746,000. That elevated San Francisco past San Mateo County as the second-most expensive place in the Bay Area to buy a home, behind Marin County, where the median was $813,000.
Judging by the number of home sales, double-digit percentage declines were noted in all nine counties: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano and Sonoma. Aggregated, Bay Area home sales declined 29.4 percent from September 2005.
Declines were largest in Solano County, which dropped from 1,030 sales in September 2005 to 585 sales last month, and Marin County, where the number of sales fell from 448 to 273 over the same time period.
The typical monthly mortgage payment to which buyers committed was $2,915 in September. That was up from $2,713 in September 2005 but down slightly from last month's average of $2,966.
Overall indicators pointed to moderate indicators of market distress, according to DataQuick. Fewer people used adjustable-rate mortgages, and foreclosure rates were considered below normal levels.
(© CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. Bay City News contributed to this report.)