Wednesday, January 6, 2010

Finally, 2009 is OVER!

Home prices in Piedmont dropped an average seven percent year-over-year between 2008 and 2009, and a bit less than 12 percent on a price-per-square-foot basis, according to data from the MLS (click on the image above to see a more readable version). The typical home sold in 44 days (compared to 26 days on market across 2008). Seventy-six homes sold during the year, roughly half the figure from several years ago, but essentially the same as last year's 77 sales. Final prices were about four percent less than asking prices, across the board, and ranged from $710,000 to $4 million.

The market was quite active all across the price spectrum. Seven homes sold for $2.5 million or more during the year. Only four of the total were identified as distressed--either bank-owned or short sales. Agents brought homes to market 57 times last year but failed to garner a committed buyer, however. That's a lot of Sunday open houses with no paycheck to show for it! This figure compares with 36 expired or withdrawn listings in 2008 (and only 17 in high-flying 2005).In a number of these cases, undoubtedly, sellers couldn't reduce their prices to market-clearing levels and pay off their outstanding mortgage and closing costs. We're also seeing some situations in which a home is pulled from the market, and a few months later a private sale takes place.

In the fourth quarter of 2009, prices actually increased a bit over fall of last year: 19 sales averaging $1.216 million sold in an average 39 days, compared to 17 sales averaging $1.147 million, typically sold in 18 days in 4Q08 (an increase of six percent, though that's not particularly meaningful with such a small number of sales in each of these quarters).

Surrounding areas fared similarly: 307 single family homes closed in Oakland 94611 and 94610 (roughly Montclair and Crocker Highlands) at an average price of $773,430 in 43 days, with 11 homes selling for more than $1.5 million. Last year, prices of the 340 single family homes averaged about $841,000, about eight percent more. A much larger percentage of these sales were distressed, however.

If we open up to all of Oakland, however, the story is more consistent with the headlines during the crisis: There were just over 3700 sales of all housing types in Oakland in 2009, averaging $297,600, with a median price of only $195,000 (I generally check to see if median prices are dramatically different from the averages, which more people intuitively understand, and they are typically relatively close. But not in Oakland last year!). This means that half of the sales were below $195,000 and half above. I scrolled through all 1000 sales between $200,000 and $400,000, and the vast majority were distressed, and the vast majority of those were bank-owned. In contrast, about 2600 Oakland homes sold in 2008, with an average price of $434,400 (and a median of $324,000). The MLS didn't have a notation for distressed sales until the middle of 2008, but even so, I had to scroll through the first 2/5s of all sales before they weren't very consistently identified as REO.

In Berkeley, 444 single family homes sold across the city in 2008 for an average $803,300, while roughly the same number, 424, sold this year for an average of only $716,000, all in roughly a month on average. This represents about a 10 percent price drop. About half of the lower-priced properties that sold through the MLS in Berkeley were bank-owned.

Across the state, the California Association of Realtors reports that the median price of a home was up nearly six percent in November, compared to a year earlier, that prices have increased in each of the last nine months, after reaching its lowest point in February 2009. Note that in all these markets, the "peak to trough" drops--that is the drop from the highest month a couple of years ago to the lowest month toward the beginning of this year was much larger than these year-over-year figures suggest. For instance, across California, prices dropped 57% peak to trough, and have climbed up 24% since then, largely due to the dramatic changes in the makeup of what's actually selling in the market. We've talked in the past about the massive influx of lower-priced homes that hit the market last fall and winter. Housing affordability (meaning the relationship between the median income and the median home price) has meanwhile improved dramatically across the state and county in the last year.

As I sit at the computer running through these transactions, I can feel the waves of foreclosures, and hear the tough conversations around dinner tables about whether to pay the mortgage this month, or to save the money to cover the possibility of a lost job or a slow period of consulting. And I can feel the pits in the stomachs, the free floating anxiety, about where this is all heading. I'm sure for many under financial stress, it feels like an impending train wreck, though unfortunately in slow motion. For those of us with plenty of equity and peace of mind, let's give thanks. And for those still uncertain about what the future holds, let's cross our fingers and vow to be generous and understanding. This last quarter has been much more stable and active than earlier in the year. While the bargains may no longer abound, the risks are likely lower as well. A good time to buy or sell--

If you'd like more data--a full powerpoint presentation of economic and housing market stats from the CAR; or a copy of the two-year market analysis from Clarus MarketMetrics for Piedmont or another sub-market, just email me at Kennedy@MaureenKennedy.Net.

1 comment:

  1. Great summary!

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