SILVAR  :  Newsroom  : Real Estate Articles

Real Estate Articles

REALTOR®: Foreclosure Re-sales Not Yet Affecting Home Prices

Wednesday, September 26, 2007

Foreclosure re-sales do not appear to be having a market-wide effect on prices, at least not in certain parts of the Bay Area, according to a real estate information service. DataQuick reported in September that although some local markets in the Inland Empire and Central Valley are showing early signs of downward pressure of prices, the overall picture of real estate in the Bay Area continues to look healthy.

DataQuick Information Systems reports the median price paid for a Bay Area home was $655,000 in August, down just 1.5 percent from the previous month, but still up 4 percent from $630,000 a year ago. The median was down in Solano, Sonoma and Napa counties. In Santa Clara County, the median increased 4.2 percent, from $672,000 in August 2006 to $700,000 in August 2007.

Statewide sales in August were down 5 percent from the previous month, and down 34.5 percent from the prior year. The median price paid for a California home in August 2007 was $465,000, down 2.7 percent from the month before, and down 1.1 percent from a year ago. The July to August drop in the median may be due, in large part, to slower 'jumbo' mortgage financing, which would bring down the number of high-end home sales, according to analysts.

"Homes in the Bay Area are more expensive than elsewhere and most of them are financed with 'jumbo' mortgages. The turbulence in the mortgage markets has made it more difficult to get this type of financing. The question is: does this pull the plug on some market activity, or does it just slow things down? We won't know the answer for a few months," said Marshall Prentice, DataQuick president.

It is the right time to buy a home if you are a serious buyer, according to local Realtors. "Inventory is up, but we all know the market is doing well and the economy is healthy," Silicon Valley Association of Realtors Board Director and Los Gatos/Saratoga District Chair Brian Crane told fellow Realtors at a September Realtor tour meeting. "Now is the time to talk to buyers and tell them it's a good time to buy a home. There are still good loans out there, interest rates are low, and these days, many buyers don't have to compete with other buyers and can negotiate terms better."

DataQuick reported the typical mortgage payment that home buyers committed themselves to paying in August was $2,251, down from $2,316 in July, and up from $2,249 for August a year ago. Adjusted for inflation, mortgage payments are 6.7 percent above the spring 1989 peak of the prior real estate cycle. They are 7.9 percent below the current cycle's peak in June last year.

Financing with adjustable-rate mortgages and multiple mortgages has declined significantly. Down payment sizes are stable, flipping rates and non-owner occupied buying activity is flat, DataQuick reported.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

» Back to Real Estate Articles

Site Navigation