Bay Area Home Sales Tumble

More evidence piled up Wednesday of the housing sector’s slowdown with reports that Northern California home sales slowed to their lowest level in 10 years as home values in some of the region’s pricier neighborhoods depreciated slightly.

Sales of new and existing homes in the nine counties that comprise Northern California plunged 30.8% to 7,941 in July compared with a year earlier, and dropped 19% from June, according to DataQuick Information Systems, a La Jolla-based research firm. Sales in Sonoma and Solana counties plunged by more than 40% year over year.

July was the 16th straight month that sales have declined year over year in Northern California. The trend is less pronounced in Southern California, where sales in the six-county region have fallen for the last eight months, DataQuick reported this week.

July’s sales were the fewest in Northern California in a July since 1996, when 7,682 homes were sold, DataQuick reported.

Slowing sales are starting to weigh on prices. In July, Northern California’s median home price rose 3.5% to $627,000 compared with a year earlier. But it was the lowest increase in more than two years, DataQuick said.

What’s more, the region’s median price -- the price at which half of all homes sold for more and half for less -- dipped 2.6% from June’s record of $644,000, DataQuick said.

Some areas are showing signs of depreciating values. San Francisco, San Mateo and Marin counties -- three of the priciest regions in the U.S. -- posted declines compared with a year earlier. San Francisco County’s median edged down 0.6% to $771,000; San Mateo County’s was down 0.7% to $754,000 and Marin County’s fell 2.1% to $789,000.

Contra Costa County saw the region’s highest annual price increase in July, up 4.7% to $581,000. Sales, however, plunged 26.9%.

Among the factors weighing on California’s housing market is less demand. After two years of record sales, there are fewer buyers around.

“One of the questions being asked is how much future activity was drawn into the present in 2004 and 2005 when interest rates were at their lowest levels in decades,” said Marshall Prentice, DataQuick’s president. “How much of today’s demand has already been met?”

The slowdown is raising concern over whether California’s housing market is heading into a lull in which home prices level off or modestly decline, or whether a more dramatic drop is in store.

One indicator that housing experts and others watch is the rate of foreclosure activity.

A new report Wednesday said 10,025 California properties entered some stage of foreclosure last month, six fewer than the previous month but more than twice the number reported in July 2005. The level of foreclosure activity is still below the historical average.

Stages of foreclosures range from a homeowner receiving a notice of default from a lender for a missed mortgage payment, all the way up to a bank assuming ownership of a property.

RealtyTrac Inc., an Irvine-based real estate database service, said the state was seeing one new foreclosure or pre-closure filing for every 1,218 households.

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Another soft spot

Median price and number of new and previously owned homes sold

in July in the greater Bay Area, by county and overall

*--* % change Median % change Number of from price from County homes sold year ago (thousands) year ago Solano 611 -41.2% $464 +3.1% Alameda 1,591 -34.6 581 +1.0 Santa Clara 1,943 -29.7 671 +4.5 Contra Costa 1,687 -26.9 581 +4.7 San Francisco 485 -23.9 771 -0.6 San Mateo 672 -16.6 754 -0.7 Total* 7,941 -30.8 627 +3.5

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*Total also includes sales for Sonoma, Marin and Napa counties.

Source: DataQuick Information Systems