With nearly 40 percent fewer Bay Area homes selling last month than in December 2006 - reaching a record low - the reality of the Bay Area housing market shifted subtly.
In San Francisco and San Mateo counties, where housing values have been relatively resilient compared with outlying areas, median prices dropped last month. Santa Clara County's median house price rose slightly, but only because cheaper homes are still selling much more rarely than the expensive ones.
December is often a slow month, but what's to blame for the super-freeze last year? Consumer confidence has been hammered by crisis in the credit markets and stock market volatility. Many loans are harder to get. So buyers are waiting.
Just 5,065 new and resale houses and condos changed hands in the nine-county area in December, about 40 percent fewer than a year earlier, according to DataQuick Information Systems. It was a new low for the month in the company's records, which go back to 1988. The previous trough was in December 1990, when 5,458 homes sold.
Prices of single-family homes fell last month in every Bay Area county except in Santa Clara, where the median price rose 4.6 percent from December 2006 to $739,000. The county's recent peak for house prices was in July, at $805,500.
But for most of 2007, median prices in Santa Clara County were inflated by the fact that home sales in the county's least expensive
neighborhoods have been depressed by the subprime mortgage market collapse.
In San Mateo County, the median house price declined 2.7 percent last month from a year earlier, to $765,000, and Alameda County house prices dropped 10.9 percent, to $552,500.
"What this shows is continued weakness throughout the Bay Area," said Ken Rosen, chair of the Fisher Center for Real Estate at University of California-Berkeley. He noted the exception of the median house price in Santa Clara County, but said that figure masked "pockets of real strength and pockets of real weakness" in the county.
Santa Clara County's high-end housing market has remained relatively healthy "partly because of the technology and venture capital businesses that have been so strong," Rosen said. "The recent declines in Nasdaq, and other announcements, indicate that maybe even Santa Clara will go into a house price decline."
DataQuick's newest figures are based on sales that became final in December, meaning most deals began in October or November - just when more effects of the unraveling credit markets were coming to light. In early October, the Dow Jones industrial average was soaring beyond 14,000; by the day after Thanksgiving, it had dropped to just under 13,000.
Many consumers lack confidence in the economy, including Cambrian homeowners Jill Simpson and her husband.
"We'd love to upgrade to a bigger house," she said. "With the recession looming, we're thinking maybe we shouldn't risk it." Maybe in a few more months, she said, if prices come down a bit in Almaden Valley, where she hopes to move. And if they don't fall too much in Cambrian, which would erode her buying power. And if she could find a house that wasn't a major fixer-upper or on a busy street. And if the semiconductor industry, where her husband works, seems stable.
Even for those eager to buy, obtaining a Bay Area-size mortgage can be tougher than it was just six months ago, when the credit markets began to stumble after a few years of don't-ask-don't-tell lending standards.
Now, not only must applicants verify their incomes and have sizable down payments at the ready, but rates for loans of more than $417,000 - so-called "jumbo loans" - can run to 7 percent or more. Lenders change their guidelines and rates constantly, loan brokers say.
Meanwhile, rates for "conforming" loans up to $417,000 - which are typically backed by mortgage financing companies Fannie Mae and Freddie Mac - have been falling. The national average rate for a conforming 30-year mortgage this week was 5.69 percent, according to Freddie Mac, compared with 6.23 percent a year ago.
