The nine-county San Francisco Bay Area housing market is taking it on the chin.
February sales of all homes (new, resale, single-family and condos) plummeted to the lowest level in 11 years and the median price declined on a year-over-year basis in five of the nine counties, according to La Jolla, CA-based DataQuick.
Some 6,305 homes sold in the Bay Area in February, down 7.9 percent from a year ago, but up 2.2 percent from January. The sales were, however, the lowest for February since 1996 when 5,940 homes sold, Data Quick reported. January sales were also at 11-year lows.
On a year-over-year basis, the area's sales have fallen for 25 consecutive months, but the declines have eased since hitting rock bottom in July 2006 when sales plummeted 32.4 percent from the previous year Data Quick reported.
With prices falling in most counties, the median price rose only 0.3 percent for the entire region, from $618,000 a year ago to $620,000 this February.
"This is what we mean by a market 'flattening out' in terms of price appreciation," said Marshall Prentice, DataQuick President. "Given the normal month-to-month wobbling of the median, prices just couldn't look much flatter than this.
Even in the region's "hot" spot, Marin County, where home prices jumped 3.8 percent and sales were up 4.1 percent from a year ago, realty agents were putting the market in the buyer's corner.
"As of March 4, 2007, 26 percent of available residential listings in Marin County are in escrow, indicating a buyer's market. For the month of February 2007, 172 transactions closed for an average sales price of $1.11 million. The average original list price of these homes was $1.14 million," according to Kelley Eling, a Pacific Union Real Estate agent reporting to RealtyTimes' Market Conditions.
Eling gave Marin's Current Market Rating a 2 based on a scale of 1 (solid buyer's market) to 5 (solid seller's market). She also said the Current Price Trend was a 3 on a scale of 1 (solidly falling prices) to 5 (solidly rising prices).
Prentice said, along with the after effects of unsustainable appreciation during the boom years, the market is an example of buyers and sellers locking horns with sellers refusing to lower prices and buyers stubbornly tightening the purse strings.
That's particularly true in Contra Costa County which suffered the region's worst year-to-year price (down 5.5 percent) and sales (down 18.7 percent) declines in February.
"The real estate market seems to be returning to normal after years of prices going up more quickly than anyone expected. For a while, many buyers took a break because of the increasing prices and overwhelming competition," says Julie McCoy, a real estate agent with RE/MAX, reporting to Market Conditions for the Contra Costa County city of Concord.
"It's a more healthy market and sellers have nothing to worry about because prices are not crashing, they are simply leveling out. This is likely to be the trend until we reach spring when activity should pick up."
She added, "The market is great right now for buyers and sellers, so if you're looking to move, don't put it off hoping that things will lean more in your favor. Take advantage of great interest rates and celebrate."
McCoy gave Concord a Current Market Rating of 2 and a Current Price Trend of 2, indicating a market leaning in buyers' favor.
Location was key for counties clustered nearest the bay itself, Alameda, Marin, San Francisco and Santa Clara (Silicon Valley). They were the only four to enjoy continued price increases in February even as sales fell in San Francisco and Santa Clara counties.
In Santa Clara County (Silicon Valley) a mixed market, with some multiple offers in the high-end sectors, helped keep prices slightly above last years by 1.5 percent.
"Some areas are strongly a buyer's market, yet in other areas it is neutral. Buyers in some price ranges have come back to the market. The condo market is doing well right now. Low interest rates and good inventory make it a perfect time to get into homeownership," said Pat Dulleck, a San Jose Realty World broker reporting to Market Conditions.
Dulleck said half the homes in the county were selling for less than asking price with only 25 percent were selling for more.
Dulleck rated the market in favor of buyers as prices moved toward smaller gains and a potential year-to-year decline.
