The median price for a new or resale single-family house or condominium in the Bay Area last month was $612,000 $4,000 less than in November but $3,000 more, or 0.5 percent higher, than in December 2005.
Some 7,488 homes changed hands in December, or almost 20 percent less than the 9,347 homes sold in December 2005. However, there was a slight uptick in sales from November, when 7,204 homes changed hands. Sales have now declined on a year-to-year basis for 21 straight months.The slowdown is taking its toll on some homeowners.
The number of homes in some stage of foreclosure in December continued to rise in the Bay Area compared with a year ago due to a slowing market and rising interest rates on adjustable-rate mortgages, according to a separate report released Wednesday by RealtyTrac.com, an online foreclosure marketplace. The majority of the foreclosure proceedings involved homeowners who fell several months behind in payments.
In Alameda County, 720 homes were in foreclosure, almost four times the number of a year ago. In Contra Costa County, 461 homes were in foreclosure, or three times the number from a year ago. In San Joaquin County, 460 homes were in foreclosure, more than three times the number from a year ago, the report said.
Even without rising foreclosure rates, the number of homes for sale has been increasing. That's because buyers are in no rush to buy and many sellers are still pricing their homes as if they were still in the red-hot market of a couple years ago, observers said.
Earl Rozran, a Realtor with the Pleasanton office of Prudential California Realty, said some properties in the East Bay have been on the market for six months.
"Some sellers have refused to make any price concessions at all," he said. "Yet they are surprised when there is very little showing activity or offers."
Still, homes that are priced right are selling, he said.
"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," said Marshall Prentice, DataQuick president. "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."
An outlook released this week by the Mortgage Bankers Association calls for low mortgage rates to hold steady, with fixed mortgage rates expected to rise to about 6.5 percent by the end of 2007.
Last week, average rates on a fixed 30-year mortgage stood at 6.21 percent while rates on a one-year adjustable-rate mortgage were 5.44 percent, according to mortgage giant Freddie Mac.
Despite the double-digit slowdown in sales, prices are holding steady for now. In the Bay Area, December median prices rose in five counties, compared with a year earlier, led by San Francisco with a 3.6 percent gain. Alameda County's median price rose 1.7 percent. Median prices fell in four counties, ranging from 0.2 percent in Contra Costa to 6.3 percent in Sonoma.
"Prices remain relatively sticky. They have not fallen." said Chris Thornberg, a principal with Beacon Economics. A strong non-housing economy that helps fuel consumer spending is behind their holding power along with a reluctance by sellers to drop prices, he said.
"People are loathe to realize a loss," he said.
However, Thornberg expects prices will start falling slightly on a year-to-year basis as early as spring in response to a softening economy.
"Even then, I don't expect prices to plunge. There will be a moderate decline over a couple years ... a few percentage points even in the worst-case scenario," he said.
Rising foreclosure rates could put more homes on the market for sale at discounted prices by lenders that take back homes, which could help fuel an overall decline in home prices, Thornberg said.
"The extent to which this is a problem remains to be seen," he said.
Contact Eve Mitchell at (510) 208-6474 or firstname.lastname@example.org.