Bay Area Median Home Price drops $100K

http://www.dqnews.com/News/California/Bay-Area/RRBay080417.aspx

"The median price paid for a Bay Area home was $536,000 last month, down 2.2 percent from $548,000 in February, and down 16.1 percent from $639,000 in March last year. Last month's median was 19.4 percent lower than the peak median of $665,000 reached last June and July"

Santa Clara Sales Volume: -46%
Santa Clara Median Price: -9%
San Francisco Sales Volume: -21%
San Francisco Median Price: 0%
San Mateo Sales Volume: -45%
San Mateo Median Price: -4%

The majority of the year's sales happen March-June. Typically there is a jump in sales from February to March. This year, that jump was half of what it usually is.

The new myth is that sales will jump once mortgage rates loosen up.

It's a myth because rates won't loosen up. Banks want to lend to qualified borrowers who can show ability to repay: 20%+ downpayments, proof of income, and top credit scores.

And with prices dropping $9K per month, buyers are waiting for better prices.

But when it comes to price, there really are 2 markets here: the Silicon Valley and San Francisco Market and the other areas. Prices are dropping fast on the margins and not in the major metro areas. I think it's for 2 reasons: more stable income and fewer home developments. Home builders are embarking on fire sales, distressing prices. However, even without homebuilder fire sales and layoffs, housing in SF and SV are affected by ARM re-sets.

And lets not forget foreclosures - banks are starting to accept the reality and deal with it by lowering prices.