San Francisco Foreclosures Put Downward Pressure on Prices

by on cities

San Francisco foreclosures continued to put a downward pressure on home prices in January, based on data from a real estate firm.

The median price for all houses sold in the San Francisco Bay Area in January fell to $350,000, a drop of nearly 8 percent from the $380,000 median in December. While home prices normally drop after the December holidays, the price drop in January was bigger than usual.

However, the January median was higher by almost 17 percent than the $300,000 median in January 2009. It was also higher by 20.7 percent than the March 2009 median of $290,000, the lowest price reached during the housing downturn. But it was still lower by more than 47 percent from the June and July 2007 median of $665,000, the highest price level reached during the housing boom.

Total Bay Area house sales in January dropped to 4,853 units, a decrease of 38 percent from December 2009 and a drop of 3.9 percent from January 2009. The month-over-month drop this January was higher than the usual December-January drop of around 28 percent.

According to analysts, the drop in the median home price in January was largely due to the increase in sales of foreclosure homes and lower-priced inland homes.

San Francisco foreclosures accounted for 36.6 percent of all home resales in January, an increase from around 32 percent in the previous month. January was also the second straight month that foreclosure sales increased. Foreclosure sales reached their highest level in February 2009 when they accounted for 52 percent of all house resales.

Although foreclosures in California have spread into affluent communities, a lot of foreclosures are still occurring in lower-cost neighborhoods in urban areas and in inland suburbs. Buyers planning to find foreclosure homes for sale can check out properties in Contra Costa, Sonoma, Solano and Napa counties where total house sales accounted for nearly 60 percent of overall Bay Area house sales in January. The percentage marked an increase from the December share of 57.6 percent but a drop from the share of 67 percent in January last year.

Sales of homes priced below $300,000 comprised 40 percent of total sales in January, a 34.5-percent jump from December but a 48-percent drop from January 2009. Sales of homes priced above $500,000 comprised 31 percent of all home sales, a 36-percent drop from December but a jump of 23 percent from January 2009.

Moreover, San Francisco foreclosures still inspired home flipping, with almost 3 percent of home sales in January involving properties previously sold between 3 to 6 months prior.

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