The spots remain in California's spotty resale housing market as the hard hit economy in the North continues to take it in the sales and price area while the stronger South still appears recession proof.
Home sales in the nine-county San Francisco Bay Area declined in a year-to-year basis for the fourteenth month in a row in October and the median price dropped for the first time in six years. Sales plummeted 19.6 percent from October last year and the $366,000 median price was down 0.8 percent from a year ago, but things are "normal" up North, according to Data Quick Information Services in La Jolla, CA.
"Today's Bay Area market is actually pretty normal. The market in 1999 and 2000 was overly rambunctious. We expect the Bay Area market to stay on an even keel through the rest of the year and on into 2002," said Mike Ela, DataQuick president.
Luxury homes likewise took a hit up north as values of high-end homes in San Francisco dropped 7.5 percent during the third quarter compared to the second quarter -- the first drop since 1999, according to the Prestige Home Index by First Republic Bank.
San Francisco's average luxury home value of $2.21 million, fell from the index's record high of $2.39 million in the second quarter of 2001, but current values are nearly identical to those of the third quarter of 2000.
"San Francisco housing values fell from their highest levels ever, largely in response to the technology slowdown in San Francisco and Silicon Valley," said Katherine August-deWilde, Executive Vice President of First Republic Bank.
Bad news for sellers was good news for buyers, some of whom saw affordability soar by double digits, thanks largely to falling prices and record low mortgage interest rates in an area where home prices remain below the half million dollar mark.
"The greatest year-to-year regional improvement was in Santa Clara County (Silicon Valley), where affordability climbed 12 points to 30 percent, as the median price decreased from $527,220 in October 2000 to $481,000 this year," said Robert Bailey, president of the California Association of Realtors.
The affordability percentage is the percentage of households that can afford the median priced home.
Affordability also jumped up north 9 percentage points in San Luis Obispo County, 7 points in Alameda County and 6 points each in Monterey and San Mateo counties and 5 points in San Francisco and Marin counties, according to CAR.
More current reports from RealtyTimes.com's Market Conditions Report of Silicon Valley reveal, thanks to the boost in affordability, the decidedly buyer's market may be near bottom.
"As of October, while buyers still have a great selection as compared to this time last year, the inventory is at its lowest since last winter. The relatively low inventory plus extremely low interest rates have encouraged buyers to make decisions. While the multiple offer frenzy of 1997-2000 is gone, multiple offers still occur for homes in good condition priced at or below market levels. Single family homes in the $400,000 to $500,000-range are currently the best sellers," said Diane Bogart of Coldwell Banker/Cornish & Carey in Los Gatos.
Statewide, affordability moved up three points, but no thanks to Southern California where it was still getting tougher to afford a home.
Affordability in Santa Barbara, for example, dropped 9 points from a year ago and now slightly more than one in four can afford the median priced home.
"While potential buyers in move-up and prestige markets are holding back, entry-level buyers are jumping in. A lot of people are qualifying for home loans now that couldn't have a year ago because of today's lower interest rates and more inclusive lending standards," said Ela at DataQuick, reporting for Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties.
Sales were up 5.6 percent from a year ago October in the area for the highest sales count ever in October since 1989. The median price paid for a Southland home was $233,000 last month way up 9.2 percent from $214,000 for October last year.
Hot Luxury Homes
Wealthy home buyers also were paying more for housing as Los Angeles luxury home values increased 2.4 percent from the second quarter, to an average value of $1.31 million -- the highest level for high-end homes since 1992. San Diego experienced the greatest increase in million-dollar home values which jumped 6.2 percent from the second quarter to $1.39 million -- the region's second highest quarterly value in the survey's history.
"Everyone is anticipating that the (Southland) market is going off a cliff like it did in Silicon Valley, but that's not going to happen here," said Alan Mark, of Prudential Malibu Realty.
"The strength of the entertainment world hasn't come back the way it normally has, but it hasn't been abandoned either. We have very qualified buyers who want to know if they can get a deal on something nice."
More current market evidence says all may not be so well in the Southland.
RealtyTimes.com's San Diego Market Conditions Report from agents in the field points to a market with flat sales prices and a strong trend toward a buyer's market.
"Overall the market is steady. Sellers are reluctant to reduce the price at this time. Sellers are not totally convinced that the market has shifted enough to warrant a price reduction. Buyer's are in the market, but the overall decision marking process is very slow. With the large number of properties to select from buyer's can take as much time as they need to make the right decision," said Joseph A. Sampson of Realty Executives Inc. in San Diego.
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