Bay Area home prices decline, sales slow

According to DataQuick, Bay Area home prices fell on a year-over-year basis for the first time in more than four years last month. Sales were at their lowest level in five years, a real estate information service reported.


The median price paid for a home in the nine-county Bay Area was $611,000 in September. That was down 1.5 percent from $620,000 for the month before, and down 0.8 percent from $616,000 for September last year, according to DataQuick Information Systems.

Because of a shift in purchase patterns, a decline from August to September is normal for the season. The year-over-year decline was the first since March 2002 when the $381,000 median dropped 1.3 percent from $386,000 a year earlier. Last month's median was in part tugged down by increased sales of lower-cost condo conversions in the East Bay.

"The last time prices dropped in the Bay Area was after the dotcom bust. There were year-over-year declines in the median in the one to three percent range for six months. The turn in the Bay Area's economy was arguably more severe back then. This time around there isn't really any economic distress. It simply looks like the real estate market's momentum last year and earlier this year pushed prices beyond their equilibrium point and the market is reestablishing its balance," said Marshall Prentice, DataQuick president.

Note that San Francisco showed a 3.5% increase and Santa Clara (Silicon Valley) a 1.7% increase.