Median Homes for the Bay Under $300K (Palo Alto, Orinda: 2009, foreclosures)

[bayarea-girl]

Any takers, how long do you think this will last?

Home median falls below $300,000

[City Boy]

I don't understand these types of articles. It's still hard to find a decent sized condo over 1100 Square Ft. for under 300k, let alone a house. If you actually go out to look for houses you'll find there's still not much reasonably priced unless it's a dump, very far from everything, or in a bad area. I'm looking for a bigger place and cannot find anything I can afford to buy that I would want to buy.

[bayarea-girl]

I guess what my real question is do people think that places are still going to go down in the Bay? It still seems over priced and no one is budging on their price. Who can really afford to buy homes over $1.2 mill or $800K and make $60K? With living in the bay do people really have 20% to put down towards a down payment? If places are to go down by how much (I know you would probably have to have a crystal ball for this answer, just wondering)? With all these attempts to save the housing market will anything actually be effective?

[nmnita]

Originally Posted by City Boy

I don't understand these types of articles. It's still hard to find a decent sized condo over 1100 Square Ft. for under 300k, let alone a house. If you actually go out to look for houses you'll find there's still not much reasonably priced unless it's a dump, very far from everything, or in a bad area. I'm looking for a bigger place and cannot find anything I can afford to buy that I would want to buy.

City Boy, I don't always agree with you, but this one I do..It is like any stat or study, whatever, make out of it what you want...median can refer to almost anything...

Nita

[ssmaster]

in my opinion it is just wishful thinking to think that california and bay area home values and income will come in line as in other parts of the country.prop 13 limits supply to much. if you live in a desirable place why move if you are going to increase your proerty tax by $10,000 a year ?even if you move to a cheaper house your property tax may go up!as others have noted supply is limited in desirable areas and prices are still high

[18Montclair]

$300,000 will not buy a house in any of the upper class or even upper middle class areas. Whats happening is that there is such a glut of cheap homes that they offset the median/ average for the entire Bay Area.

Even with the low median, a person is not going to suddenly be able to afford Orinda or Palo Alto for $300K-as if.

[ImRandy]

Originally Posted by bayarea-girl

Any takers, how long do you think this will last?

Given that the article uses the exaggerated 9 county definition of the Bay Area I think you'll see that continue for at least a couple of years. There are tons of homes out in the boondocks that are very, very cheap and not many people wanting to buy that far away.

[PeixeGato]

Originally Posted by City Boy

I don't understand these types of articles. It's still hard to find a decent sized condo over 1100 Square Ft. for under 300k, let alone a house. If you actually go out to look for houses you'll find there's still not much reasonably priced unless it's a dump, very far from everything, or in a bad area. I'm looking for a bigger place and cannot find anything I can afford to buy that I would want to buy.

The problems with these types of "analyses" is that they lump ALL properties into one report, regardless of condition, location, neighborhood, etc. So just because the median price dips to $300K, that doesn't mean you'll find much available for that price, much less anything you would want to live in.

Remember, "median" is the price that you get when you list all of the prices in order and pick the one that is in the middle (i.e. so that there are the same number of properties that are more expensive as there are less expensive). This could mean that the next house on the list above the house that is at the "median" price of $300K is $650K and you have a whole bunch of properties in the $275K - $300K range that are complete dumps located in really bad areas.

The only use for these reports is to compare it to previous "medians" to get a general idea of which direction prices are going relative to previous periods.

[artemis78]

[quote=PeixeGato;7966114]This could mean that the next house on the list above the house that is at the "median" price of $300K is $650K and you have a whole bunch of properties in the $275K - $300K range that are complete dumps located in really bad areas../quote]

....and in this case, that's exactly what it means. A lot of the "sales" are actually foreclosures where the bank is taking title for the value of the loan. Add to that the number of foreclosures that are being sold at auction (or are stripped and being sold on the open market, etc.) at extremely discounted prices, and you've got a big group hovering near the bottom, and then a gap, and then a less affected market at the higher end. (Not unaffected, of course, but there are fewer problems with inventory pileup and bank-owned properties in the more stable neighborhoods across the Bay Area that have not been as badly hit by the foreclosure crisis.)

It's more telling to look at data that exclude properties where a bank is a buyer or seller. Prices are still down, but less than you'd guess based on the medians. That said, I think we'll continue to see downward pressure on prices across the board as long as the credit markets are frozen and the foreclosures are piling up. Watch for a shift in notices of default, and then a slowdown in actual foreclosures; that's when we'll begin to come out of the dive.

[sonarrat]

Originally Posted by bayarea-girl

I guess what my real question is do people think that places are still going to go down in the Bay? It still seems over priced and no one is budging on their price. Who can really afford to buy homes over $1.2 mill or $800K and make $60K? With living in the bay do people really have 20% to put down towards a down payment? If places are to go down by how much (I know you would probably have to have a crystal ball for this answer, just wondering)? With all these attempts to save the housing market will anything actually be effective?

You do have to understand that not everybody is going to be buying a house at the same time.. you only need to have enough people with decent incomes to buy all of the inventory, not every house in the whole city. This will actually be a bigger issue once the baby boomers start to downsize en masse in order to retire. They'll find the pool of buyers to be quite shallow.