Bay Area (CA) home sales, prices down for the 9th month in a row

[Bush_Eats_Beef]

http://www.bizjournals.com/sanjose/stories/2006/01/16/daily43.html

The pace of home sales in the nine-county Bay Area dropped year-over-year for the ninth month in a row in December, while prices fell 2.6 percent from November's record high of $625,000, a real estate information company reported today.

The month-over-month decline in the number of sales is unusual as sales typically rise from November to December, La Jolla-based DataQuick Information Systems said.

"Demand still seems to be there, but the sense of urgency seems to be a thing of the past," DataQuick President Marshall Prentice said in a prepared statement. "We don't expect the market to tumble, but we do expect price increases to level off between now and spring."

Nearly 11,100 single-family homes, townhouses and condominiums sold in the Bay Area last month, the company says. That compares to 9,347 in December of 2004. In Santa Clara County, the pace of home sales also slowed again in December with 327 fewer homes selling in 2005 compared to the previous year, DataQuick reports. Last month, 2,305 homes sold countywide.

[Yollam]

1. I do expect the prices to tumble.

Incomes here cannot sustain these prices. 60% of the homes sold here in the last few years have been no-interest loans and negative equity loans. It's 100% a speculative bubble and the true value of the homes around here is probably about 2/3 of the current going rate.

As balloon payments come due and homeowners find that they can't sell at the inflated prices they had been anticipating, look for a surge in defaults, foreclosures and a price collapse. It's exactly what happened in Japan in the early 90's.

[LeftCoast]

2. The inner Bay Area counties still have rising housing costs

But the market is slowing down here. A cooling off period wouldn't be all bad.

[The_Casual_Observer]

3. Speculative markets like this are subject to wild nonlinear swings

Why shouldn't we expect and downward swing just as steep as the upward swing was?

[Fridays Child]

4. Wow! If this keeps up for another nine months...

...Bay area housing prices will be in an even lower category that I can't afford. :P