No, that’s not the magnitude of the Great San Francisco earthquake (although more than a few of SF residents might have felt the ground shake), it is the percentage that home prices fell in the City by the Bay for December/January:
Just looking at the Bay Area, the median home price dropped 9.1% from December to January. That doesn’t mean that the price of a given house fell 9.1%. It does mean that mid-high end activity fell off of a cliff, pushing the median much lower. The simple truth is that most move-up buyers have no equity and most first-time buyers bought last year. All that is left are investors and flippers who are buying up the lower end.
Median price changes don’t equal actual home price changes, but they can certainly be a leading indicator. Why? Simple economics: Price follows volume. Supply and Demand. As fewer mid-upper-end homes sell, more of them will be forced to drop their prices. And, more buyers will be emboldened to try to get better deals.
The other lowlights from the California Association of Realtors:
The statewide median price of an existing, single-family detached home sold in California was $278,900, down 8.6 percent from a revised $305,020 in December and was down 2.0 percent from the $284,600 median price recorded for January 2010. The January 2011 median price was the lowest since June 2009, when it was $274,640.
•The Unsold Inventory Index for existing, single-family detached homes was 6.7 months in January, up from 5.0 months in December 2010. The index was 5.7 months in January 2010. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
•Thirty-year fixed-mortgage interest rates averaged 4.76 percent during January 2011, compared with 5.03 percent in January 2010, according to Freddie Mac. Adjustable-mortgage interest rates averaged 3.25 percent in January 2011, compared with 4.33 percent in January 2010.
•The median number of days it took to sell a single-family home was 61.8 days in January 2011, compared with 32.9 days for the same period a year ago
These numbers pretty much speak for themselves…they are going the wrong way.
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