Bay Area home prices, sales rise
Bay Area home prices, sales rise
(07-16) 09:56 PDT San Francisco — Bay Area home prices rose month-over-month for the third straight time as sales reached their highest level in three years last month, fueling hopes that the limping real estate market is slowly beginning to heal.Across the nine-county region, 6,518 existing, single-family homes traded hands, up 27.8 percent from a year ago in June, according to San Diego research firm MDA DataQuick. The median price paid was $360,000, down 29.4 percent from a year earlier but up nearly 7 percent from May.
DataQuick attributed the gathering strength to a growing perception among buyers that prices have bottomed out and the increasing availability of mortgages.
OMG! OMG! OMG!
The good times are coming back everyone! Woohoo!
July 16th, 2009 at 12:40 pm
This is good news/bad news. Medians are rising because enough mid price properties have dropped in price enough that they are bringing in buyers. Prices are still collapsed for low end, nothing is actually going up.
July 16th, 2009 at 2:33 pm
A quick lesson on median:
month 1: 200k sale, 300k sale, 400k sale, 700k house sits waiting for buyer. Median is 300k
month 2: 175k sale, 275k sale, 375k sale, 700k house is now 600k and sells. median is 325k ( (275 + 375) / 2)
Prices went down but median is up. This describes the bay area market for at least the next year, probably 2 – 3.
July 16th, 2009 at 2:53 pm
I really wish they would publish price per square foot changes. Not idiotic medians. They are virtually meaningless in certain markets. Especially those that have slower turnaround times.
You could have three houses in one area, being priced at 1 million, 2 million and 3 million respectively.
If the first house sells one year, the median sale price for that year is one million. If the second house sells for 1.5 million the second year due to price changes or a recession, the median has STILL gone up by 50%. Yet what actually occurred was that higher priced housing merely dropped in value due to price factors.
July 16th, 2009 at 2:54 pm
I agree regarding the reason for median being up. Just based on a quick look at prices on redfin in different moderately priced areas, including sunnyvale, mountain view, willow glen, cambrian, cupertino, and los gatos, it still appears as though most houses are listed at 2004 to even 2006 prices (ie. bubble prices), which is to say they are still vastly overpriced based on fundamentals. In those areas, I don’t think we are near the bottom. Subprime areas like east san jose, gilroy, etc. maybe. But everywhere else around silicon valley no.
Incidentally, I also talked to a realtor last night that said this year was by far the worst year he’s ever experienced in 15+ years. Even homes where offers are being made are quickly following out of contract because of lending or appraisal issues or because the buyers quickly realize they signed on to catch a falling knife and back out. He said he just hoped things quickly dropped another 25% so that they are back affordable and inline with historical prices and rents.
July 16th, 2009 at 3:00 pm
It’s fair enough to say sales are increasing. That’s a good sign for the housing market.
But the median is such a useless figure, it really should be ignored.
It’s flat out wrong to say prices have risen – everyone takes that to mean the same home is worth more. That’s not true right now.
Separately, my own block is an example of shadow inventory: Neigbhor across – died 18 months ago, heirs remodelled, on market since Nov. 2008 – FSBO at wishing prices doesn’t appear in MLS. Next to them – neighbor died 6 months ago – family slow to get it on the market. Sitting vacant. Next to us: neighbor in hospital – going to a nursing home after hip surgery – son still mowing the lawn, hasn’t decided what to do yet.
2 other neighbors had one spouse laid off from good job, haven’t found a job in 6 and 12 months – getting worried about the mortgage. Other neighbors still employed, but lost renters of their 2nd home, haven’t found new ones for 2 months. Can’t carry both. Can’t sell 2nd home – underwater now. 1st home at not quite underwater – but they’ve lost most of their downpayment if they sold now.
But so far, prices have held pretty steady on our block! Two places went in the last 3 months for only 5% under asking, and asking was probably about the same as in late 2008…
But I don’t feel like buying with all this pressure coming downwards on prices down the pipe…waiting as a renter makes it much easier to sleep at night right now.
July 16th, 2009 at 3:04 pm
R,
A 25% drop would probably bring us back to trend line. Overall, anyway. Certain areas have to correct more. In the area that I live in, if I saw an across the board 25% drop, that would probably be enough for me to at least begin to consider looking.
As an example, there is a house in an area near where I rent that is currently going for just over $700k. If this house were to drop to around $500k, that would begin to look appealing to me, given that it is one of the better areas and the house is actually a good size and in decent shape.
Better yet, I would prefer to just take my myself over to Austin and buy a much nicer house for about $250k.
July 16th, 2009 at 5:07 pm
BAI – they do publish $/sf.
http://www.dqnews.com/Charts/Monthly-Charts/SF-Chronicle-Charts/ZIPSFC.aspx
July 16th, 2009 at 6:47 pm
The problem the Bay Area now faces is unemployment, with high numbers especially in the juicy areas. As of today, Cisco is laying off 100’s of employees.
So… I agree, median prices and sales are not a total indicator of the much-desired “healthy” housing market status.
The observations in my semi-desirable East Bay hood is that there was a rash of sales in the Spring- predominantly tiny little starter homes. Of the buyers I see who have bought, most seem to be older and in their 50’s. Not very many younger buyers.
Anything over the 450-500k price just sits. There is more than one house that has been for sale for well over a year. The real estate agents who live down the street from me are selling their cars. Not exactly compelling evidence of a rebound.
July 16th, 2009 at 6:57 pm
nomadic,
Thanks for the link! That is VERY telling. I looked up my area (Los Gatos & Saratoga) and the price drops in the region close to the city center are upwards of 25-30% on a per square footage basis.
Of course, they are still million dollar homes. Just not as many millions.
Real Excreter outta take a look at that chart. His highly vaulted Palo Alto is down nearly 30% on a per square footage basis.
But of course, that’s just ‘useless aggregate data’…..
July 16th, 2009 at 7:08 pm
Speaking of the good ole’ Palo Alto area, as mentioned I work in the juiciest part of it. I’m now starting to see a preponderance of “price reduced!” stickers on for sale signs. Uh-oh! I suppose the notion that the housing crash would eventually hit prime areas could be coming true.
July 16th, 2009 at 10:48 pm
I’m now starting to see a preponderance of “price reduced!” stickers on for sale signs.
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I think City of Palo Alto should ban “price reduced” signs. That’s so insulting for prestigious zipcodes!
July 16th, 2009 at 10:53 pm
Real Excreter outta take a look at that chart. His highly vaulted Palo Alto is down nearly 30% on a per square footage basis.
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No, he would say that there were too many tear-downs sold this year. They were sold for lot-only.
If you ask for data, his answer would be: I showed everything in past.
July 16th, 2009 at 11:50 pm
> I think City of Palo Alto should ban “price reduced” signs. That’s so insulting for prestigious zipcodes!
Prices in Palo Alto are not reduced anymore, they are revised (1110 Embarcadero Rd).
July 17th, 2009 at 12:18 am
Pricing 2.0?
July 17th, 2009 at 8:19 am
>>Bay Area home prices, sales rise
I reported this 2 months ago as it was happening. Pralay was arguing against the facts back then (saying that just because I say so doesn’t make it true). Now we know who’s right.
July 17th, 2009 at 8:23 am
>>I’m now starting to see a preponderance of “price reduced!” stickers on for sale signs.
Those signs are designed for dumb amateurs like Bob. It’s a merely marketing strategy. Everyone knows that in this economy buyers look for bargains. Therefore, realtors initially list the home high, and then give it a Macy’s style discount to attract attention.
July 17th, 2009 at 8:25 am
>>Prices in Palo Alto are not reduced anymore, they are revised (1110 Embarcadero Rd).
This is the type of home that lends itself to such marketing strategy. It’s practically located on a freeway on ramp, with none of the qualities that make a Palo Alto home.
July 17th, 2009 at 8:27 am
I am on business trip in Southern California. Will check out some foreclosure properties today.
July 17th, 2009 at 8:32 am
As I observed, the recovery is at hand:
Housing Starts Surge
Single-family housing starts were especially strong, up 14.4% on a month-over-month basis. It was the biggest surge in that measure, considered the core of the housing market, since December 2004.
Friday’s report suggests that the battered housing market is gradually stabilizing, according to Mike Larson, real estate and interest rate analyst at Weiss Research.
July 17th, 2009 at 8:58 am
I reported this 2 months ago as it was happening. Pralay was arguing against the facts back then (saying that just because I say so doesn’t make it true). Now we know who’s right.
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LOL! The urge of proving himself right must be so high that RealEstater didn’t even bother to read the article. Here what article says:
Median is down. Got to be “useless aggregate data” for RealEstater.
Remember we bottomed in January? But still falling?
Wow! 37.3% foreclosed!!!
If this the article used by RealEstater to prove himself right, he is bigger and larger pathetic bull than we thought.
July 17th, 2009 at 9:08 am
Pralay,
You’re getting distracted again. We’re talking about X, and yet you’re arguing Y and Z. Typical trolling from you.
July 17th, 2009 at 9:08 am
Those signs are designed for dumb amateurs like Bob. It’s a merely marketing strategy.
——
So when RealEstater shows property that is listed $1.2M initially and later price gets reduced to $1.15, we all know that it is just “marketing strategy”.
And when he says “no downturn here” (or asks “is this what you guys call downturn pricing”) by showing those listed properties, we all know that he was just joking.
July 17th, 2009 at 9:10 am
We’re talking about X, and yet you’re arguing Y and Z.
——
LOL! It is coming from a guy who cannot even make some basic logical argument.
July 17th, 2009 at 9:14 am
Housing Starts Surge
Single-family housing starts were especially strong, up 14.4% on a month-over-month basis. It was the biggest surge in that measure, considered the core of the housing market, since December 2004.
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Useless aggregate data.
July 17th, 2009 at 9:18 am
Bay Area home prices, sales rise
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The article is based on DataQuick data. We all know that “DQ is thoroughly useless aggregate data” that lumps up nine counties together.
July 17th, 2009 at 9:19 am
>>Useless aggregate data.
You failed to read the context. We’re not just talking about RBA housing per se. This kind of figure contributes to the national recovery that Obama/Geithner are talking about.
July 17th, 2009 at 9:20 am
Once again, we’re talking X, and you’re talking about Y and Z. Troll on, Pralay!
July 17th, 2009 at 9:20 am
You failed to read the context. We’re not just talking about RBA housing per se. This kind of figure contributes to the national recovery that Obama/Geithner are talking about.
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National recovery? Useless aggregate data.
July 17th, 2009 at 9:23 am
Once again, we’re talking X, and you’re talking about Y and Z.
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Good to see that you know that X, Y, Z are different letters.
That’s quite an improvement for someone who cannot even spell correctly.
July 17th, 2009 at 9:41 am
California no longer has double digit appreciation for property values. Big deal! But at least we have double digit unemployment (officially).
July 17th, 2009 at 2:35 pm
I’ve got some news for those of you waiting for house prices to “rebound” – that ain’t gonna happen for 10 years minimum. What’s happening here is that real estate prices are slowly stabilizing, and sales are catching up to form an equilibrium with the inventories. Prices will be right around these near-bottom levels for a long time, so don’t go trying to flip properties any time soon.
Otherwise, this is obviously good to hear.
July 17th, 2009 at 3:16 pm
Juiceman,
Isn’t that what they said about the stock market?
July 17th, 2009 at 5:19 pm
…with none of the qualities that make a Palo Alto home.
Except that fact that it is, in fact, in Palo Alto. I know houses get tossed out of the RBA regularly, but cities don’t tend to toss homes out of their community.
Thanks for the laugh.
July 17th, 2009 at 5:46 pm
“with none of the qualities that make a Palo Alto home.”
The poster has none of the qualities that make a valuable burbed contributor.
July 17th, 2009 at 6:23 pm
how can you say that? he made me laugh out loud.
July 17th, 2009 at 6:42 pm
That makes him an invaluable contributor
July 17th, 2009 at 8:56 pm
how can you say that? he made me laugh out loud.
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He is natural born genius who does not know how much entertainment value he provides.