Sand Creek Plaza

The numbers are in, and they’re exactly what we expected. With banks unloading a record number of foreclosures, bay area home sales soared, while the median price plummeted. This is according to a real estate report released Thursday 11-20-08.

Most of the action, and the big bargains, were in areas where bank repossessions have become a fact of life. Almost half of all existing homes sold were foreclosures. Their bargain-basement prices sent the median price tumbling 45 percent during the past year to $375,000. This is all according to research firm MDA DataQuick of San Diego.

Despite an economic crisis and a stock market plunge, the fire-sale prices pulled more buyers into the market. A total of 5,624 resale homes changed hands in the nine-county Bay Area in October, up 66.2 percent from a year ago.

The Bay Area median price hasn’t been this low since October 2001, when it was $370,000. However, the median’s tumble reflects more the swing to lower-priced homes in lower-priced areas where foreclosures are commonplace, rather than an across-the-board depreciation. This doesn’t mean every Bay Area house has gone back to 2001 levels, but it does tell an interesting story about where people are buying, and where they are not.

During the boom years, prices in lower-cost areas appreciated as subprime buyers rushed in. With the bay area in a buying frenzy it’s time for you to secure a cost effective location that will outlast these economic hard times. Sand Creek Plaza specializes in finding you great deals in this crazy real estate market. Our knowledgeable staff is a phone call away.

Zillow.com the website now best known for delivering bad news to delusional home owners announced today homes values have slide for the 7th consecutive quarter down 9.7 percent in the third quarter of this year relative to their levels one year ago. This marks the seventh consecutive quarter of negative year-over-year declines, each quarter turning in a greater negative annual change than the prior quarter. For comparison, the revised second quarter annualized change in the Zillow Home Value Index was 8.6%. For the first time this quarter, the depth and duration of the housing downturn in some markets has translated into flat or negative five-year annualized appreciation rates. Twenty-seven of the 163 markets covered experienced negative five-year annualized value changes and another twelve markets had basically no change over that period of time. For example, Stockton real estate has dropped 3.8% on an annualized basis since 2003 and Boston home values have dropped about one percent annualized over the past five years. Some markets are now teetering on the edge of seeing no appreciation over the past decade such as Detroit where real estate values have increased less than one percent on an annualized basis over the last ten years.

It is essential that the supply of homes accumulated during this downturn is sold off fast. Sales volumes must pick up to a pace that exceeds the normal rate of sales to bring back this market. If we think of the inventory of unsold homes as a bucket of water, and the bucket already has a historically high level of water in it, if we keep pouring more water into it, the bucket is bound to spill over.