California's two largest metropolitan areas, one in the north, the other in the south, are fast becoming home price decline markets as 12 of the total 15 counties from both areas suffered sales declines of more than 20 percent in August.
Coming off a year of record sales in 2005, all 15 counties in the two major population areas suffered home sales declines, while three counties in the nine-county San Francisco Bay area and one county in the Southern California region yielded home price declines, according to La Jolla-based DataQuick Information Services.
In the San Francisco Bay Area, "Several things are going on. Many homes are being offered for sale at unrealistically high prices as sellers try to game the peak of the market. Buyers appear to be taking a wait-and-see approach as sellers get real with their asking prices. The market seems to be going into a lull, until this all shakes out. It does appear that the strong appreciation of the recent past is leveling off," said Marshall Prentice, DataQuick president.
But if history back to the end of World War II is any indicator, home prices won't decline as much as they've risen.
"The market is certainly off from its frenzy, but we have to remember that it takes much more downward pressure to push prices down than upward pressure to push them up. Prices have doubled in the last four-and-a-half years. So does the market keep all of that gain, or only ninety percent?" said Prentice, putting a potentially precarious predicament in perspective.
In Northern California, for both new and resale homes, the median price of homes declined in San Mateo County by 6.7 percent (the largest decline in two regions), in Marin County by 2.3 percent and in Alameda County by 1.5 percent, during the month of August, compared to August 2005.
San Francisco Bay Area region home prices overall were flat, rising only 0.2 percent from a median of $619,000 in August 2005 to $620,000 this year.
"The San Mateo marketplace offers a tremendous amount of opportunity for buyers," writes Burlingame-based Cashin Co. real estate agent Jack Heffernan, reporting to RealtyTimes.com's Market Conditions report.
That's if you can afford the still-high $721,000 median price for new and existing homes.
In Southern California, the only county-wide price decline was in San Diego County where the median price slipped 2.2 percent. Home prices for the region rose 2.7 percent from a median $476,000 last year to $489,000 this August.
"Many agents kept trying to push the range on listings, anticipating the next jump. This caused a false sense of home values still rising when, in fact, they just stayed about the same. This also caused more market time and some forced sales at lower prices," said San Diego-based Dawn Lewis Team broker Dawn Lewis for RealtyTimes.com's Market Conditions report.
In both regions, home sales were a shadow of last year's closings.
In the San Francisco Bay Area, Napa County's sales plunged more than 47 percent, but represented a relative small number of sales, only 119 this August compared to 438 last year. More representative of the area, Alameda County suffered a 28.2 percent sales decline and Santa Clara County (Silicon Valley) was behind last August's sales by 24.9 percent.
Region-wide, the Northern California market saw sales drop 24.9 percent.
In Southern California all, six counties saw sales drop by more than 20 percent with Orange County, down 32.0 percent, leading the way. Both San Diego and Ventura counties' home sales dropped 31.8 percent.
Region wide, the Southern California market's home sales were down 25.3 percent.
