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What Is Really Happening With Danville Ca Real Estate
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Danville Real Estate Market Not What The Media Says
The latest figures for the nine San Francisco Bay Area counties showed a 45% increase in sales volume and a 35% drop in median price for September compared to last September. Although the Danville numbers are accurate they are not what they seem to be because, as you know, we are in a very unusual, even historic market.
Yes, Danville CA home values are down, but not 36%. Many more Danville lower cost homes are selling than last September, but the number of higher priced and luxury homes sales are down substantially. Jumbo loans, loans above $729,500 with a few exceptions this year, are much harder to obtain so many more lower cost homes are selling.
Lower cost homes have dropped dramatically in price mainly because of a large number of foreclosures (bank owned properties, REOs) and bank short sales (banks negotiate with the owners to lower the principal amount of the loan when the owner has a buyer for the home. This keeps the Danville home out of foreclosure which is costly for a lender, but usually not as costly as foreclosing).
Median price has plummeted for several reasons:
- Significant shift toward a higher portion of sales occurring in lower-cost inland markets
- Region wide price depreciation, which varies by location
- The relatively high cost and qualifying difficulties associated with the jumbo loans used to finance pricier homes
Prices in some coastal areas continue to hold up much better, but sales aren’t shooting up by as much, if at all. Nearly 42% of all existing homes sold across the Bay Area last month had been foreclosed on at some point in the prior 12 months, but only up 6.9% from the previous year.
Sales figures from the Contra Costa Association of Realtors stats that cover 14 communities from Orinda to Danville for September compared to last September show: Closed sales up 65% for homes & up 10% for condos - Pending sales up 76% for homes & up 74% for condos/townhouses.
Chained-homeThere is NOT an excess of homes/condos/townhouses on the market compared to the rate of pending sales over the last 30 days. Active listings are down 17% for homes & 30% for condos/townhouses.
In our Danville area, home values have held up comparatively well compared to the inland areas with lower priced homes and a lot of new construction over the past five years that have led to numerous foreclosures and short sales along with dramatic drops in prices. Lamorinda, Walnut Creek, Alamo, Danville, San Ramon, Pleasanton, and Fremont home values are holing up relatively well because of the low number of foreclosures and short sales.
If you would like more detailed San Ramon California information, contact Paul (925) 963–4246
In the long run Danville real estate remains one of the best financial investments. Our FREE Market Reports provide you with the best weekly market trend information available.
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October Stats In
The Months of Inventory increased by .78 of a month, up .21% compared to October 2, 2008. The increase was from 3.74 months to 4.54 Months of Inventory. Only two areas had a reduced number compared to twenty-five areas had an increased number. The highest number of pending sales were in Oakland with 323, 5.25 Months of Inventory, Antioch with 289, 3.05, and Hayward with 244, 3.79. It appears that these three areas are areas having a large number of short sales/foreclosures in these areas at greatly discounted prices.
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Federal Reserve Keeps Rates Unchanged
Financial analysts who were hoping for some downward movement on interest rates by the Federal Reserve were disappointed as Ben Bernanke and his merry band unanimously voted to do nothing.
Following what is now a familiar and conservative wait-and-see strategy towards the nation’s economy, and reactionary as usual, Bernanke and the Federal Open Market Committee left their short-term federal funds rate at 2 percent.
Later in the day the Fed made what had to be a highly anticipated move by the nation’s financial gurus, deciding to bailout AIG at the 11th hour before the world’s largest insurance company went bankrupt.
As for its decision on interest rates, in its official statement the FOMC justified its position, stating, “Strains in financial markets have increased significantly and labor markets have weakened further. Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters.”
The New York Times commented that the decision to keep the key rate where it is clearly demonstrates the Fed’s limited ability to solve a problem involving the nation’s housing and mortgage markets.
However, with concerns of inflation mounting, Stuart Hoffman, chief economist at PNC Financial Services Group told Investor Business Daily Tuesday that rate cuts are back on the table, especially if economic growth continues to slow down in the fourth quarter of the year.
Remarking on the Fed’s rescue of AIG, the Los Angeles Times commented that it seems to be an “abrupt about-face” in position considering that the Fed did not bail out Lehman Brothers as it filed for bankruptcy protection (after having bailed out Bear Stearns earlier this year).
All of this rocking the boat may be making the nation’s financial markets a little queasy as the Fed decides which side its bread is buttered on. But it can’t be very settling for the nation’s homeowners either, as many more continue to face foreclosure in the coming months until a bottom of the market is clearly defined.
In the meantime, thanks to the waffling by the Fed, foreclosure is going to continue to be a dominant factor in the marketplace for the foreseeable future. Good news for wannabe homeowners looking for discounted properties, and a great time to be a real estate investor in most parts of the country.
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