Bay Area home sales stuck at 10-year low, prices flat

Bay Area home sales stuck at 10-year low, prices flat

Silicon Valley / San Jose Business Journal - 2:52 PM PST Wednesday, January 17, 2007

Bay Area home prices were flat in December while the sales pace was the slowest in a decade, a real estate information service reported Wednesday.

A total of 7,488 new and resale houses and condos sold in the Bay Area last month, up 3.9 percent from 7,204 in November, but down 19.9 percent from 9,347 in December last year, according to DataQuick Information Systems.

Sales have declined on a year-over-year basis the last 21 months. Last month's sales count was the lowest for any December since 1996 when 7,180 homes were sold. The average for all Decembers since 1988 is 8,339.

Sales in Santa Clara County last month dropped 17.2 percent year-to-year to 1,908, but the median price rose nearly 1 percent to $648,000. Sales in San Mateo county fell even more, 19.8 percent, to $739,000 and the median price dropped 1.2 percent to $730,000.

"Clearly the market is in a lull while potential buyers wait for lower prices. Because of seasonal factors prices may edge down during the next two months, but are likely to move up again in spring. An important factor is whether or not mortgage interest rates stay where they are. If they do, we should expect the market to pick up in March or April," said Marshall Prentice, DataQuick president.

The median price paid for a Bay Area home was $612,000 in December. That was down 0.6 percent from $616,000 in November and up 0.5 percent from $609,000 for December a year ago. The median peaked last June at $644,000.

DataQuick is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $2,801 last month. That was down from $2,872 in November, and down from $2,943 for December a year ago. It peaked in June at $3,183. Adjusted for inflation, mortgage payments are 10.3 percent higher than they were at the peak of the prior cycle in early 1990.

DataQuick said indicators of market distress are still in the normal range. "Financing with adjustable-rate mortgages is flat. Foreclosure activity is rising but is still in the normal range. Down payment sizes are stable. Flipping rates and non-owner occupied buying activity are down."