Bay Area Home Prices Plummet as Fire Sales Surge

August 20, 2008 No Comments »

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Bay area home sales achieved their first year-over-year gain since the beginning of 2005 as distressed properties boosted the numbers, Dataquick reported.

A total of 7,586 new and resale homes and condos sold during July in nine Bay Area counties, a 5.7 percent increase from June and a 2.2 percent increase from July 2007, but still the second slowest July since 1995.

Unfortunately, foreclosure resales made up a whopping 33 percent of all resales, up from 29.9 percent in June and 4.2 percent a year ago.

“So much of today’s market is driven by distress. Unless interpreted in that context, the stats give a rather distorted view of the overall market,” said John Walsh, DataQuick president, in a release.

“We know one-third of the Bay Area’s resales in July were homes fresh off foreclosure. Who knows how many more involved a desperate seller and a lender who accepted a short sale.”

All those fire sales, especially concentrated in less expensive inland areas of NorCal, led to a substantial median sales price drop during the month.

Year-over-year, the median price paid fell a record 29.3 percent to just $470,000 in July, a 3.1 percent discount to June’s $485,000 average and the lowest figure since March 2005.

Last month, jumbo loans accounted for just 32.3 percent of all home purchase mortgages, down from 63.1 percent in July 2007.

The good news is that the typical monthly mortgage payment was $2,218 last month, down from $2,282 a month ago and $3,222 in July 2007.

(photo: aslakr)

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