Real estate sales fell 22 percent in the San Francisco Bay Area in fourth-quarter 2006 compared to fourth-quarter 2005, according to a report by Prudential California Realty, while the median price increased 1 percent for all housing types.
For-sale inventory jumped 22 percent in the fourth quarter compared to the same quarter in 2005, the company reported.
“Although it’s still early, these are positive signs that the market is finding its legs in this correction and stabilizing,” said Scott Kucirek, general manager of Prudential California Realty, in a statement. “The sharp rate of the downturn has definitely decelerated.”
A glut of mid-year inventory in 2006 quickly shifted the market to favor buyers, the report states. “Buyers enjoyed a great deal of choice and were able to make demands for price reductions. This had an impact on inventory levels in the fourth quarter as some homeowners removed their properties from sale and more chose to wait and see how the market would fare before listing,” according to the Prudential announcement.
For-sale homes spent an average of 24 days more on the market in fourth-quarter 2006 compared to fourth-quarter 2005. This ranged from nine more days on market in San Francisco and 47 more days on market in Napa County in the fourth quarter compared to the same quarter last year.
“As price increases softened on mid-priced homes in several counties, pockets of luxury homes in San Francisco and close to Silicon Valley experienced the strongest price growth in the fourth quarter,” Prudential reported.
In Atherton, a community in San Mateo County, the median price of a single-family detached home grew by 12 percent to $3.25 million in fourth-quarter 2006 compared to fourth-quarter 2005 — the highest median price in the Bay area. The median price for the same property type in the Pacific Heights area of San Francisco jumped 18 percent to more than $2.6 million.
The median price of single-family detached homes fell 5 percent in Marin County, 4 percent in Solano and Sonoma counties, 2 percent in Alameda County and 1 percent in Contra Costa County in the fourth quarter compared to the same quarter last year, while rising 6 percent in Santa Clara County, 5 percent in San Francisco and 1 percent in San Mateo County, Prudential reported.
Kucirek stated that there is “some consumer apprehension” in the Bay Area real estate market, though demand is solid and “was buoyed by a rebound of hiring in the tech sector.” He added, “Currently, we are still in a transition period and it will take the spring market to really see where the market nets out in terms of both activity and price resiliency.”
Prudential California Realty and its sister affiliations in Nevada and Texas form the eighth-largest national real estate brokerage. Prudential California Realty had 29,000 transactions and $14 billion in annual sales in 2005, and Prudential California Realty, Prudential Nevada Realty, Prudential Texas Properties and Prudential Texas Realty have about 5,000 agents and 139 offices.