Home sales drop across Bay Area

By Lara Moscrip, Bay City News Service

January 24, 2007

Homes sales in the Bay Area decreased 22 percent in the fourth quarter from the same time period last year, according to a report released today by the research division of Prudential California Realty.

The report confirmed that home price appreciation was stable, rising by 1 percent across all housing types from the fourth quarter of 2005.

According to Scott Kucirek, the general manger of Prudential California Realty in Pleasanton, "the sharp rate of the downturn has definitely decelerated. Unit sales are still down considerably from 2005 levels, however the decreases became smaller each quarter as the year ended.

At the same time, the rate of new listings coming to the market leveled off and dropped."

Although it's still early, these are positive signs that the market is finding its legs in this correction and stabilizing, Kucirek said.

In the fourth quarter 2006, the median price of a single-family detached home in the Bay Area increased 2 percent, from $729,183 in the fourth quarter 2005 to $740,615. However, home sales are down 23 percent from the fourth quarter 2005 to the fourth quarter 2006.

There were 14,147 single-family detached homes sold during that period as opposed to 10,970 homes sold in the fourth quarter of 2006, according to the report.

Houses are also staying on the market for a longer period of time in the Bay Area, according to the report.

Single-family detached homes spent 18 more days on average on the market from this time last year.

According to the report, the glut of mid-year inventory shifted the market from a strong seller's market to a buyer's market in a short time period, with buyers having the chance to make demands for price reductions.

This had an impact on house inventory levels in the fourth quarter 2006 as some homeowners removed their properties from sale and chose to wait and see how the market would fare before listing.

Houses in San Francisco spent nine more days on average on the market and houses in Napa spent an average of 47 more days on the market, from the fourth quarter of 2005 to the fourth quarter of 2006.

Kucirek said, "although there is some consumer apprehension, demand for homes remains solid in the Bay Area, and in the fourth quarter it was buoyed by a rebound of hiring in the tech sector. Currently, we are still in a transition period and it will take the spring market to really see where the market nets out in terms of both activity and price resiliency."

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