Across the Bay Area, real estate in 2011 was a puzzle of contrary trends that saw prices decline for single-family houses and large areas of depressed sales, but bubbling activity in key pockets that may indicate a better year to come.
Overall, sales of single-family homes in the counties of Contra Costa, Alameda, San Mateo and Santa Clara were close to flat from 2010 and are about half their 2004 peak, real estate information service DataQuick reported Wednesday.
The median price of a single-family home in the nine-county Bay Area in 2011 was $390,000, well below the $416,000 median in 2010, DataQuick said. Except for 2009, it hasn’t been that low since 2001.
In San Mateo County, December’s median price of $535,000 was down 11.6 percent from November. Smaller declines of about 4 percent were reported for the counties of Santa Clara, at $499,500; Alameda, $365,000; and Contra Costa, $255,000.
The price declines reflect a market heavy with foreclosures and short sales, real estate agents said, while low volume of sales was tied to difficulties prying mortgages out of banks and the reluctance of sellers to list their homes at current low prices. Buyers were also cautious, not wanting to invest in a home whose value might be in decline.
“We’ll remember 2011 as much for what didn’t happen as for what did,” said John Walsh, DataQuick president. Except “at the very top of the market,” credit, negative equity and an uncertain
economy kept people away, he said.
Bidding wars
But there is evidence that the market is slowly reviving.
On the Peninsula, bidding wars are erupting as buyers scramble to snag homes before the Facebook initial public offering produces a fresh crop of millionaire homebuyers. And in Antioch in East Contra Costa County, first-time buyers are warring with investors for homes in the $200,000 range.
In the last half of the year, there weren’t enough homes to meet demand in the Palo Alto area, said Wendy McPherson of Coldwell Banker. “We spent the last half of the year absolutely hungry for inventory,” she said. “It became unbalanced, and we started having more buyers than sellers.”
Palo Alto “is going to set new all-time highs” this year, predicted Ken DeLeon of Keller Williams. “It will be higher than 2007, higher than 2000.”
“We’re seeing a lot of buyers trying to get in before the Facebook IPO — even the Facebook executives want to get in before it goes public,” DeLeon said.
One modest Palo Alto home listed at $2 million in a coveted neighborhood sold for $2.45 million recently in a bidding war between “a Facebook person and an early Googler,” he said. The Googler won.
About half the buyers around Palo Alto are “young tech” and half are foreign buyers who are used to an urban environment like Shanghai, China, and Lahore, India, and don’t want a home in the hills, DeLeon said.
At the lower end of the market, distressed sales predominated in 2011. These were homes either lost to foreclosure or whose owners were forced by circumstances to short sell — selling for less than what is owed on the mortgage. For the nine-county Bay Area, sales of new homes, existing homes and condos priced under $300,000 were up 12.4 percent from 2010, DataQuick said.
Lower-end homes
In Antioch, the multiple offers for lower-end houses are coming from investors and first-time buyers, according to agents there.
“Anything below $200,000 right now, unless it’s a terrible dump that’s overpriced, is going to sell in the first week and almost all get multiple offers,” said Neil Case of Altera/Signature properties in Antioch. “I have six buyers, every time we make an offer we get beat.”
The problem is inventory — there aren’t enough homes on the market, said Joyce Tietz, also with Altera,
“The banks have foreclosed on some homes but we haven’t seen those homes come back on the market yet. That’s one factor,” he said.
“We’re seeing a bigger percentage of distressed properties purchased at the courthouse steps, and now they are being flipped, and lot more short sales than regular sales. I’d say that out of 100 homes on market, you might see three or four regular sales, where someone is deciding to move and they do have equity.”
Still needed: something to fire up sales in the middle of the market.
That area remained slow last year, even though prices and interest rates were at historic lows. That combination failed to lure homebuyer partly because loans were hard to get for much of the year, and many who would have liked to move up to a bigger, more expensive home were stuck where they were by declining values.
“The housing sidelines are full of buyers and sellers,” said Andew LePage of DataQuick. “Sellers are not highly motivated and buyers want to be convinced we’ve hit bottom. We’re in that period where there’s a lot of inaction because of the uncertainty.”
Contact Pete Carey at 408-920-5419.
