Firm: N. Calif home sales drop 20 percent in Sept.

AP News
Posted: Oct 21, 2010 1:22 PM
Firm: N. Calif home sales drop 20 percent in Sept.

Home sales in the San Francisco Bay area plunged 19.6 percent last month to reach their lowest level for a September in three years, as historically low mortgage rates failed to draw new buyers during a shaky economy, a tracking firm said Thursday.

San Diego-based MDA DataQuick said 6,334 homes sold in the nine-county area last month, down from 7,879 in September 2009. Sales fell 5.4 percent from 6,698 in August.

Last month's sales were the slowest for a September since 2007, when 5,014 homes sold, and were 26.7 percent lower than the month's average of 8,641.

DataQuick President John Walsh said some potential buyers are not acting because they expect prices to drop further, while others are concerned about keeping their jobs amid the state's high unemployment.

Still others are on the sidelines because they can't qualify for the "jumbo" loans _ generally defined as loans in excess of $417,000 _ that were once common in the area.

"The sidelines are getting awfully crowded," Walsh said.

The median home price of $395,000 in the San Francisco Bay area was up 8.2 percent last month from $365,000 in September 2009 and up about 2.6 percent from $385,000 in August.

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But the gains were not spread evenly throughout the region's counties, with Santa Clara seeing the region's biggest year-to-year gain, increasing 11.1 percent to $500,000.

San Francisco's median, however, dropped 4.6 percent from last year to $620,000, and Napa's dipped 6.4 percent to $337,000.

Walsh said pent-up demand among prospective buyers could explode if prices edge down further.

If "prices fall more an interest rates stay the same or edge lower, then it's easy to imagine a burst of sales activity at some point," he said. "Next spring could be very interesting."