Lizzie,
I think it all depends on your income level. The article below would support that view.
Quite frankly things are doing OK here in MA due to exports and venture capital. But work in the trades, especially housing related has slowed. Still the economy grew over 4% last month in this tale of two cities. SF is probably the same.
Lee
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The San Francisco Chronicle reports from California. “The median price for an existing single-family dwelling in the Bay Area hit a record $720,000 in April, up 6.6 percent from last April, according to DataQuick. That happened even though the number of existing homes sold in April fell 19.9 percent. The month was the 27th in a row in which sales volume declined, and April’s sales count was the lowest in 12 years.”
“The Bay Area numbers come with some caveats, however. The median price is skewed by strong activity at the upper end. ‘The volume (of sales) being low tells you that we’ve lost the bottom 20 to 30 percent of the market that can’t qualify for mortgages,’ said economist Ken Rosen, at UC Berkeley.”
“‘In starter neighborhoods, you’re more likely to see big sales drop-offs from last year and more significant price declines,’ DataQuick analyst Andrew LePage said.”
“Bearing out that thesis, Realtor Leif Jenssen recently cut $20,000 off the price of a 2-bedroom, 1-bathroom home he’s selling in Oakland’s Maxwell Park, which he considers a starter neighborhood, with home prices from $400,000 to $550,000.”
“‘If you search six blocks in either direction from the house, there are 80 houses for sale,’ he said. ‘The one right next door, which is a bit smaller, came on the market at $449,000. We were at $495,000 so (we reduced the price) to $475,000.’”
“Maxwell Park exemplifies the kind of area likely to suffer from the subprime problems. ‘It will probably have a fair amount of foreclosures because a lot of people buying in that neighborhood were low-income and didn’t have money to put down,’ Jenssen said. ‘I see properties out there that say they’re bank-owned (which means they have been foreclosed).’”
The Santa Cruz Sentinel. “There is a flip side to the April median home sales price that is near the record set in the red hot market of 2005. ‘The homes that are selling are the more expensive ones,’ said Herbie Lee, a statistician at UC Santa Cruz. ‘The low end of the market is what they’re selling less of.’”
“‘Cheaper places aren’t selling, so I think what is happening is only more expensive places are moving, thus making the median look so large,’ said renter Scott Oliver.”
“His theory is that people with better credit can get large loans to buy pricey homes whereas people with lower incomes who were buying less expensive places are no longer getting the no-verification loans that used to be granted.”
The Contra Costa Times. “While East Bay home sales slid to their lowest-selling April in 12 years, the median home price rose 4.3 percent in Contra Costa County, DataQuick reported.”
“‘The sharp drop-offs in entry-level neighborhoods have been dragging down sales,’ said DataQuick analyst LePage. ‘Contra Costa’s median price is up 4.3 percent, but that’s because there are fewer starter-homes sold.’”
“LePage said that tougher lending practices, foreclosures and higher rates have led to fewer first-time homebuyers being able to afford a home. And with less of those lower-end homes selling, the price of higher-end homes sold rises, skewing the statistics.”
“In areas where the typical price is less than $550,000, there could be 30 to 60 percent declines in sales. ‘Buyers are being very cautious,’ said Paul Ward, a broker associate in Danville. ‘There has been a big drop in transactions and cautious buyers and speculators are out of the market.’”
The Mercury News. “In the more expensive counties, median prices continue to defy the slowdown because the mix of homes that are selling has changed. Some local realty agents attest to the slowdown in ‘entry-level’ homes in Santa Clara County.”
“In the under-$700,000 price range, especially on San Jose’s East Side, ‘There’s a lot of homes out there right now and they’re not moving because there’s no one out there to buy them,’ said (broker) Robert Aldana.”
“He works with many clients on the East Side, which is suffering higher default rates than other parts of the county.”
“Creekside Realty owner Richard Calhoun said that in March and April, sales of houses in the high-priced cities of Mountain View, Palo Alto and Los Altos, for example, went from forming about 10 percent of sales in Santa Clara County to being 25 percent of sales.” |
