Housing Market Improving In The Bay Area, California?

While various home markets within the State of California (to include Sacramento) may remain under siege, in the Bay Area things may be beginning to improve. Clearly home prices are below the level experienced a year ago, and without putting economic realities aside, home prices rose from April to May around the fabled Bay Area, which recorded its second consecutive month-over-month improvement.

Across the nine-county region the median price for existing, single-family homes was $337,000 in May 2009, up 9.6 % month-over-month, down 37.1% year-over-year, with a total of 5,655 resale properties exchanged during May 2008, up 27.6% percent from a year ago.

The improvement can be attributed to buyers’ and investors’ willingness to step up to the place given the reduction in home prices over the past year, the relatively low interest rates, as well as various government and industry incentives. However, concerns remain that rising unemployment and the potential for a broadening of foreclosures could moderate or extinguish any expansion of the nascent recovery.

From the year-ago level, as would be expected, Napa County experienced the smallest price decline, down 17.6% to $350,000; San Francisco declined 19.6% to $682,000; Alameda County dropped 35.1% to $330,000; while Contra Costa County experienced the largest decline of 39.6% to $227,000.

Unfortunately, this potential “green shoot” may not have a significant impact for entities’ operations in the Bay Area, such as but not limited to Bank of America (BAC), Citigroup (C), Wells Fargo (WFC) and U.S. Bancorp (USB).

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