Glen's East Bay Housing Numbers Through September 2010

The September East Bay Housing Numbers are in and  inventory continues to rise in Contra Costa and Alameda Counties as sales remain sluggish.

• We have seen a 114% increase since the beginning of the year on the amount of homes that are now for sale. Typically, we see a drop as the summer ends.
• Pending sales, (homes that have gone into contract), are on the decline, down 22% since 4/30/2010, (the federal and state incentives deadline).
• Sales are down 8.5% since the end of May.
• Months supply has increase from 1.7 months at the beginning of the year to 3.8 months now.

• Finally our Pending/Active Ratio of .78 now indicates that we are, on the whole, back in a “buyer’s market.”

This week I wanted to bring in some recent news sources to help make some sense out of what we’re seeing here in the Bay Area.

1) CAR (California Association of Realtors) released their 2011 California Housing Market Forecast on Oct 4, 2010. They forecast that we would see a small increase in sales and median price for California in 2011 at 2% each.

Here’s a quote from their article that I felt was very relevant;

“The situation in the California housing market continues to be a tale of two housing markets,” said (C.A.R. President Steve) Goddard. The segment of the market under $500,000 has been driven by distressed sales, while higher-priced areas of the state have been constrained by restricted financing options, and increasingly have experienced an increase in the number of distressed properties. Sales in the low end have been constrained by a lack of inventory, putting upward pressure on prices. Multiple offers on lower-end homes have been very common, according to Goddard.

“A lean supply of available homes for sale will drive prices up at the low end, but larger inventories and limited, less attractive financing will cause continued softness at the high end,” said Appleton-Young. “There’s some indication that lenders will accelerate the number of foreclosures coming on market, further adding to the housing supply, but we do not anticipate that lenders will flood the market with distressed properties,” she said.

2) From another article found in the Wall Street Journal blog yesterday, by Dawn Wotapka, titled “Housing Inventory Climbs Again in September;”

“Housing inventories, which typically dip as the summer ends, rose for the ninth straight month in September, indicating that sales remain weak as the downturn drags on.”

“More inventory is the last thing housing needs. Current sellers face a bleak picture: Despite record-low interest rates and falling prices, some home shoppers remain fearful of signing contracts as unemployment remains elevated. Those ready to buy may think that prices will fall further, providing little incentive to act quickly. Given tightened lending restrictions, others want to buy but cannot. Some sellers, meanwhile, can’t trim prices any further without selling for less than they owe. And the foreclosure crisis continues–and some banks have halted foreclosures, further gumming up the works.”

3) A final quote from a DQNews article, Bay Area Homes Sales Drop to 1992 Level; Median Price Slips Again;

“The magnitude of the sales slowdown suggests that, among other things, many would-be buyers are holding off for further price cuts, which would be most likely where an inventory spike meets slackening demand. The trick is to keep one eye on mortgage rates. If they jump, it could erase the benefit of a modest price drop.”

As always, I’m available if you want to talk about the market, or explore your options for buying, selling or investing in East Bay real estate. You can reach me directly at 510.333.4460.

You can also download the entire copy of Glen’s Numbers Through September 2010 here