Housing analysts in the San Francisco Bay Area are hopeful the price declines of new homes and homes listed in foreclosure listings will stop soon. From data on home sales in the area in February, they are getting signs of the impending bottoming out of home prices and ultimately, the recovery of the housing sector.
The median home price of $295,000 in March across the Bay Area for single-family houses was 46.3 percent lower than March last year, but represented just a one-half percent decline from February.
Based on studies by San Diego-based MDA DataQuick, the month to month declines have been narrowing, with the January median price declining by 7.9 percent and the February median price declining by 2.4 percent. The steepest fall in a period of several months was the 11.1 percent decline in September last year.
The narrowing month-to-month drop is significant, according to Esmael Adibi, head of the Chapman University’s Anderson Center for Economic Research in Orange. He is hoping the market is now nearing its bottom, as home sales and affordability factors such as mortgage rates continue to improve.
Adibi attributed the increases in foreclosure sales and the flattening of the median price to falling home prices in foreclosure listings and dropping mortgage rates for fixed-rate 30-year mortgage loans.
Andrew LePage, an analyst for DataQuick, said home prices have not bottomed out, but there are now signs of an impending stabilization in prices. He however warns about factors that could easily erase small signs of recovery, such as continued job layoffs and continued addition of homes to foreclosure listings.
In the midst of signs of improvement, California foreclosures are still among the highest in the nation in RealtyTrac’s new foreclosure survey for March. Notices of default and auction sales and bank repossessions rose by 36 percent from March last year. Across the Bay Area, 4,808 single-family homes, including houses from foreclosure listings, were sold in March, the seventh straight month that sales increased.
Homes sales are slowing in high-priced areas like San Francisco, San Mateo and Marin, but zooming in low-cost areas like Contra Costa and Solano. San Francisco’s median price is still the most attractive for homeowners, holding up at $626,500. The lowest-priced homes are in Contra Costa, a county battered by foreclosure listings.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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