As you see in the graphs below, the number of foreclosures in the Bay Area dropped dramatically during September and October. Does this mean the worst is over? NO!

This drop refelcts the implementation of new California legislation that took effect September 1. As of 9/1/08, lenders had to give an additional 30 days notice to homeowners defaulting on mortgages before issuing a NOD (notice of default).

We can expect the numbers to jump in November and December.

Foreclosure Trend in Bay Area Counties

 Alameda

• 12 MONTH TOTAL: 21,472
• PER HOUSEHOLD: 3.86%
• MONTHLY CHANGE: -5.0%
• YEARLY CHANGE: 96.88%

 Contra Costa

• 12 MONTH TOTAL: 29,600
• PER HOUSEHOLD: 7.72%
• MONTHLY CHANGE: -5.07%
• YEARLY CHANGE: 77.93%

 San Francisco

• 12 MONTH TOTAL: 2,130
• PER HOUSEHOLD: 0.60%
• MONTHLY CHANGE: 20.18%
• YEARLY CHANGE: 73.06%

Santa Clara

• 12 MONTH TOTAL: 18,070
• PER HOUSEHOLD: 2.99%
• MONTHLY CHANGE: -22.04%
• YEARLY CHANGE: 101.91%

 Foreclosure Statistical Graphs for the Bay Area

Sitting at the intersection of Interstate 580 and Interstate 680, Dublin and Pleasanton California offer very different real estate markets. Pleasanton CA is a more mature real estate market with little land left to develop. Dublin CA has plenty of land for development, but new home builders are adding to the downward pressure on home values in Dublin with step discounts on new home inventory. Dublin also has a higher ratio of condos than Pleasanton.

October Short Sales

• 10 Short Sales in Dublin CA
  • 5 Detached homes ($418K to $850K) Average days on market = 70
  • 5 Condos/Townhomes ($360K to $423K) Average days on market = 34
• 7 Short Sales in Pleasanton
  • 5 Detached homes ($495K to $1.4 million) Average days on market = 130
  • 2 Condos/townhomes ($347K to $410K) Average days on market = 45

There are currently 43 short sales in pending sale in Dublin CA and 17 in Pleasanton.

Current Short Sale Inventory

58 in Dublin = 34 Detached / 24 Condo/Townhomes

32 in Pleasanton = 21 Detached / 11 Condo/Townhomes

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East Bay Short Sales / REOs / Foreclosures / Bank Owned Properties

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.

California home sales were up 6.1% in September 2008 over September 2007. Over 51% of resale homes in September were foreclosures.

Bay Area home sales were up 45% over September 2007 but the median home price dropped to $400K. Foreclosure sales in Contra Costa County contributed to a 10% increase in market share for home sales from counties with large inventories of foreclosures. Foreclosures accounted for 58.7% of homes sold in Contra Costa County while  foreclosures sales accounted for 37.9% of sales in Alameda County.

Moreover, nearly 42 percent of all existing homes sold across the Bay Area last month had been foreclosed on at some point in the prior 12 months, up from 36.1 percent in August and 6.9 percent a year ago. Foreclosures tend to sell at a discount and are concentrated in relatively affordable neighborhoods.

Properties are still selling.  During the last seven days there have been 49 pending sales in Danville, Alamo, Blackhawk, Diablo, San Ramon and Walnut Creek.  In just three areas Pleasanton, Dublin and Livermore there have been 48 pending sales.  Contra Costa Association of Realtors statistics in the fourteen areas covered,  from Orinda to San Ramon, for August (the latest available) shows pending sales up 56% for detached homes and up 17% for attached townhouse, condos and duets compared to last August. Foreclosures an short sales continue to be a substantial number of properties selling as many are at bargain prices.

In eastern Contra Costa County home prices continue to attract investors to the communities of Antioch, Brentwood and Pittsburg.

Bay Area Home Sales August 2008

Bay Area Home Sales Price August 2008

To see a trend you need to looks at the last three months figures as one month of pending sales doesn’t give you sufficient numbers to reach a meaningful conclusion. 

It appears that the same factors that have been affecting our market most of the year still remain.  It is still a buyer’s market although the Months of Inventory remains low.

July Home Sales in the East Bay

Approximately 30% of July home sales in the East Bay were sales of foreclosures and bank owned properties.

Home sales were up in both Alameda and Contra Costa counties, but the median home price was down.

This should be no surprise as prices are still settling and under pressure from foreclosures, short sales and new home builders offering discounts & incentives.

The number of foreclosures increased in Alameda County jumping back up near May’s high. Contra Costa County saw a decrease in the number of foreclosures coming on the market.

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The total Months of Inventory has been holding fairly steady for the past several months with August 3rd showing a 4% decrease for the twenty-seven communities compared to July 2nd.  Seventeen were lower, nine higher and one even with last month.  Overall active listings decreased by 3% and pending sales increased by 3%.  August 3rd overall average was 4.60 months compared to 4.49 on July2nd.

These figures only measure market activity compared to what is available for sale.

It is a snapshot to where the market is today, buyer’s, seller’s, or balanced market.  These figures tell you nothing about prices, values, or how many days it takes to be a pending sale.  Check with your local Realtor for this information.

Although it is a buyer’s market, historically 4.60 months of inventory would be a balanced market.  This unique situation of having a large number of short sales, foreclosures, and lenders higher qualifying standards, plus the shortages of funds for jumbo loans, has temporarily changed the definition of a balanced market.

We are experiencing a unusually high number of pending sales in the outlying areas where a lot of beginning price range new homes have been constructed over the past five years and have resulted in substantial price drop that have created some relatively good values. We are seeing less price drops in the more populated mid to higher priced homes.

We won’t go back to historical standards of Month of Inventory until most of the short sales, foreclosures have worked through the system, better liquidity of lender funds and some favorable coverage in the media.

In the bay area five months of inventory is considered a balanced market and NAR states that six months of inventory for the nation is a balanced market.