Bay area housing market could stabilize late this year

8:32 PM, Apr 11, 2010   |    comments
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Tampa, Florida - Realtors are upbeat about the housing market, and while home sales are up, the prices of those homes are still relatively low.

The housing market may be showing signs of stability. Realtors were busy this past weekend luring buyers in, as part of national Open House Weekend, and they're optimistic about housing sales.

"We just completed the first quarter of sales and the first quarter of sales, actually, we sold about 3,300 units and there's about 9,000 units of inventory on hand currently," said DeDe Ross, a realtor with Keller-Williams Realty.

While home sales are up 32 percent over this point last year, the prices for those homes remains down and realtors say that's due to the number of distressed properties in the market, like foreclosures and short sales.

"On average, foreclosures and short sales are selling for 29 percent less than a conventional sale price. So, if I'm not distressed and I sell my house for $100,000 and my neighbor is distressed, he's going to sell his house for 29 percent less than that," said Peter Murphy, a real estate consultant with Home Encounter.

About 42 percent of all sales in March were from distressed properties, and that makes it hard for average home prices to trend upwards. The recent modification of the Making Homes Affordable Program could also impact the housing market recovery.

"The jury is still out. It all depends on what people decide to do. If they decide it's easy for them to get a short sale and they go into that process... then it could potentially have a downward effect on prices," commented Murphy.

Realtors say if we see a substantial fall in the sale of distressed properties, then we could see true housing market recovery in the fourth quarter of this year.

Home prices have been hovering around $90 and $100 per square foot since January 2009. That's right around the time that distressed real estate began to gain momentum in the Bay area. 

Melvin Beal, 10 Connects

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