Bay Area Median Home Prices Continue to Rise (San Francisco, Berkeley: for sale, real estate)

[Ultrarunner]

Today's SF Chronicle Bay Area report shows home sales volume down 16.7 percent, compared to last year, and the median home price up 5.6 percent, setting a new record of $785,380..

Union City, Berkeley and San Rafael were among the 10 cities with the greatest median price increases compared to March of last year.

Prices rose 26.5% in Union City, 23.8% in Berkeley and 17.8% in San Rafael.

Bay Area inventory continued to rise, with an index of 8.7 months in March, compared to a 4.7 months supply a year ago.

Median time for sales is now 56.2 days...

Interesting stats, compared to all the negatives I've been reading.

I hope people waiting for Bay Area Home Prices to drop don't get left out.

[achtungpv]

When the market is turning down, one of the first things that happens is the median price goes up while inventory increases. This is because all the low-end buyers are the first to drop out since they are most affected by minimal increases in interest rates and tightened lending standards. Those that can afford to buy at the upper end are still buying and thus rising the median price. This has happened during every downturn.

[Ultrarunner]

Now that you mention it... it makes sense... thank you for posting.

[DogLady321]

Originally Posted by achtungpv

When the market is turning down, one of the first things that happens is the median price goes up while inventory increases. This is because all the low-end buyers are the first to drop out since they are most affected by minimal increases in interest rates and tightened lending standards. Those that can afford to buy at the upper end are still buying and thus rising the median price. This has happened during every downturn.

Thanks for this info. I hadn't thought of it that way.

[sliverbox]

When the market is turning down, one of the first things that happens is the median price goes up while inventory increases. This is because all the low-end buyers are the first to drop out since they are most affected by minimal increases in interest rates and tightened lending standards. Those that can afford to buy at the upper end are still buying and thus rising the median price. This has happened during every downturn.

Absolutely correct. Median prices don't mean squat in a market downturn. I don't think anyone - even homeowners and realtors- will admit that the market is " good". Inventory, foreclosures, and fire sales are at an all time high, sales are at an all time low, and the housing market nationally is doing very poorly. My advice to anyone even thinking of buying in California is to wait it out at least for another 2 years or until the bottom has been hit and prices just start to ebb upwards again. 2 years minimum, as l0ng as 5-7.

[riesdad]

Excellent point about the high-end prices driving median prices. Hey, wasn't it Mark Twain who said, "There are lies, damned lies, and then there are statistics?"

Thank you Hillsborough and Piedmont.

[Sleeestak]

In the Bay Area, a 5.6% rise is about as much "drop" as anyone can expect.

[sliverbox]

"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.”

Bottom line: median and lower home prices are gonna' keep right on crashing and we've only saw the start of this so far.

[clongirl]

I'm in total agreement with sliverbox and the others that believe that the housing market in the Bay Area is on it's the way down. Don't believe it when someone says "you must get in now, before it's too late." This is the spin that got so many people worked up and fearful to begin hence creating the bubble to begin with. For anyone here interested in what's REALLY going on with Bay Area/California real estate and how median prices are calculated check out http://patrick.net/housing/contrib/medianLiars.html

[sliverbox]

I also think that another element that is going to continue to erode prices is the increasing amounts of people moving away to other states and cities. There's an almost completely contrasting amount of activity when comparing the SF city data site to say Raleigh NC and Atlanta GA. or even Austin TX. Take a look there and you'll see a lot of questions about what the schools, neighborhoods, and climate is like and more than likely the people asking those questions are people from the coasts: NY, CA, MA, WA, etc etc.

Some of those city data sites have pages full of people looking to move there while this site gets maybe 3 to 4 posts a day, and of those posts, half are of college students who just graduated and are looking to live somewhere fun for a few years. So there is a large amount of interest in places that offer a more assured living standard rather than the 'hope' that someday, prices might come down. The success of California and other big cities in many ways is also contributing to a possible decline in certain population groups.People simply want a place they can live without enormous amounts of debt and overly complicated social stratification. I can't say I blame others for seeking out an alternative solution rather than sitting on the fence simply hoping the sky will fall on the California housing market.

But ultimately, if enough people move out, then this might bring lower prices as a result.Who knows? I certainly don't.All I know is that I've never felt that spending anything close to 500k+ for a house ANYWHERE was worth it, especially when even now you can rent for a fraction of the cost.