East Bay Market Update

Despite unsettling events in the housing and mortgage markets as recently as today, the East Bay appears to be doing better than much of the rest of the state and much of the country, according to data from a variety of sources.

Berkeley prices are about 5 percent below the $829,000 average in the 2Q06. In contrast, Oakland's average price declined by 20 percent between this just-closed quarter and the same period last year, according to data from the Multiple Listing Service.

At the same time, median prices across the state declined by 35 percent in May, 2008 compared to May, 2007 according to the California Association of Realtors. The organization reported that prices across the San Francisco Bay Area declined by 19.5% from 5/07 to 5/08.

The average home price was $525,100 in Oakland last quarter (87% of the original asking price for these homes) and $782,100 in Berkeley (2% over asking). The typical Oakland home sold in 44 days, a clear increase over the month or so a sale consumed at this time last year. By comparison, the CAR reports that across the state, average days on market was flat over the past year, at about 50 days.

The number of sales in Berkeley is a bit below the figure for 2Q07 (154 this quarter compared to 172 for the same period last year). Oakland and Piedmont sales are down much more significantly, though the average price per square foot in Piedmont has remained very steady this past year.

Interestingly, the condo market seems to be settling down. The statewide decline in condo prices slowed--between April and May of '08, prices declined by less than 2 percent, compared to declines of nearly 5 percent in the single family market. Likewise, overall condo prices were down by 20 percent in the year prior to May, '08, while they were down 35 percent in the single family market.

There are bright signs: the first-time homebuyer affordability index eased, meaning that as prices declined, more households had the income necessary to make a home purchase. And across the state, the number of sales has increased these last few months, suggesting that homes on the market that were in default or foreclosure several months ago have now gone into lenders' inventories. In turn, lenders are now very focused on selling these properties, getting them off lenders' books and occupied.

If this treatment only whets your appetite for data, email me and I'll forward you a recent California Association of Realtors economics and housing PP presentation.