San Francisco Values Stay Afloat while Los Angeles and San Diego Continue to Decline
According to a report by the Wall Street Journal, luxury homes in California were not immune from the current housing crisis. This may come as a surprise, since many associate dropping home values with nearby foreclosures and short sales; both which might seem particularly rare with affluent home buyers in wealthier neighborhoods.
According to the data collect by First Republic Bank, Los Angeles and San Diego values fell 3.8% and 7.8% compared to the second quarter of 2007. The San Francisco Bay Area on the other hand rose 0.1% in the first quarter of 2008 and 0.2% compared to the second quarter of 2007. Certainly nothing to write home about, but interesting to see luxury home values keep their value in certain parts of California. According to real estate agents in San Francisco and Palo Alto, many sight the lack of inventory for these luxury homes prices staying afloat.
Fastest Selling Markets
Another piece of news puts California on the map, as Sunnyvale and San Diego are considered in the top 10 “fastest-selling” housing markets. Sunnyvale ranked number one with an average of 66 days on the market,an annual price change of -0.4%, and a median price of $1.031 million. San Diego ranked third with an average of 70 days on the market, a median price of $771,025, and a -9.7% annual price change. Compared to last year however, Sunnyvale homes are staying 46.6% longer on the market while San Diego homes sit 14.7% longer.
Consider the Data
Luxury homes struggle to keep their value. The fastest selling housing market taking 46.6% longer to sell than last year. It’s tough with tighter lending standards and defaulting homeowners, but before we see any turnarounds in California we’ll need to see much stronger data. These are supposedly our strongest markets, but with the data we have now, even the best markets in California are still hurting.
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“Sunnyvale ranked number one with an average of 66 days on the market,an annual price change of -0.4%, and a median price of $1.031 million. San Diego ranked third with an average of 70 days on the market, a median price of $771,025, and a -9.7% annual price change.”
This is interesting to read, especially when you are trying to sell a home. Just for a comparison, what is the average time it takes to sell a house nationwide?
Is the increase due to the declining values and thus the lower selling prices?
One thing to keep in mind is that foreclosure hurts everyone on the market.
Ann: The nationwide average of DOM may be too vague and actually might do little to help you sell a home.
Instead, I tried looking for a consumer friendly research tool and found this: http://www.altosresearch.com/research/CA/SUNNYVALE
Your best bet would be to use MLS or another listing service to gather DOM data in your specific area.
Ed: The increase in homes sitting on the market is likely due to a combination of tighter lending standards and general buyer apprehension. Prospective buyers are just scared that values may drop lower and they are stuck with negative equity. Also, so many homes are going into foreclosure that inventory is keeps increasing, and thus more homes inevitably stay on the market.
Kate: Agreed. Could not be stated any simpler than that. Foreclosures take away the equity of surrounding homes, those borrowers lose equity and may have trouble refinancing, and sellers must lower their sales price -the harm spreads like wildfire.