Sales Down In Many Bay Area Zip Codes
Thanks to the reader who posted this DQNews link on the Bay Area home sales activity. Besides showing some big drop-offs in sales, it confirms that familiar trend of prices continuing to rise even as buyers turn away.
5 Comments:
Can anyone explain why this is happening? How can sales in a zip code drop 50 percent, yet prices rise 50 percent? It makes no sense to me.
The only explanation I can think of is a drop in supply - but from what I've seen on other posts, the number of homes on the market is going up. So what's the story?
Can anyone explain why this is happening? How can sales in a zip code drop 50 percent, yet prices rise 50 percent? It makes no sense to me.
A single zip code is too small a sample size to look at over a 4 week period. Try looking at the table on a county-by-county basis.
I see that prices are up on lower volume for all 3 counties. Not a particularly good sign for continued price increases...
This has shown up time and again, and I think buyer psychology is the answer. If we are in a mania, the masses will slowly realize the "shared mistake" and begin to drop out of the picture. But the last group of buyers still have the fever, and to them higher prices are a validation of their emotions. Much like the Nasdaq, which saw a final blow-off in share prices.
It's also interesting to note that at the DQNews.com site, on the left hand side under "Recent Releases" click on "Monthly for Bay Area" and you'll read a very upbeat article about how Bay Area homes are still selling like hotcakes and "Home prices in the Bay Area rose to new highs in March as sales for that month were at their highest level in sixteen years." So what gives? Is someone lying, is this more shady reporting or is the market still strong?
The bulk of the sales volume appreciation was in Solano County (Fairfield, Vallejo, etc.) Which is the far East Bay and is barely even in the bay area, and is much cheaper than other areas. Everything else if pretty flat.
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