Wednesday, December 2, 2009

Looking at Alameda Housing Compared to the Region

Seeing that inventory has dropped in Alameda over the past several weeks I thought it was important to show how the region is performing over the past several months.

The SF Bay Area has seen a drop every month for the past 12 months. In November of 2008 the region had 30,668 homes for sale a year later the inventory has fallen to below 15,000 units. It is almost a 28 percent drop in 12 months. From October to November of this year, inventory dropped 2.42 percent for the Bay Area.

There are several reasons for this drop in inventory the first is distressed properties are starting to clear out in many cities. Second is people are waiting to sell if they can and waiting to see what the market is going to do in the next 12-18 months. Finally we have also hit the slow season for home sales.

Almost 45 percent of properties in the Bay Area on the market have used a price reduction to try and stimulate sales on properties that are lagging to produce interest.

In Alameda, we currently have 41 percent of our inventory instituting a price reduction. A good example is in the over million dollar market for Alameda we have 10 properties listed. On Bay Farm, 7 Castlebar is Alameda highest listing at $1,899,000. it is also listed for $1,699,000. It has been on the market since May even with the apparent price reduction.

The other issue is properties that are not selling. Overpriced properties and distressed are making a large portion of properties currently for sale. Overpriced is hard to define, but days on market is a good indicator. Over 50 properties have been on the market more than 60 days. Alameda’s distressed property is 18 percent of the inventory.

The Alameda market is following the region for the most part in terms of price reductions and declining inventory.

If you look at sales in the Bay Area for September and October they have been very strong compared to the first part of the year and this has cleared out much of the inventory. The thing to watch is if we start seeing fewer sales and glut of distressed properties, then the slow market will continue.

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