Dwindling mortgage options leaves Bay Area home sales mired in misery

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Bay Area place gross sales limped along at a decades-low pace in October, as purchasers continued to happen few mortgage options.

A sum of 5,486 new and existent houses and condominiums changed custody last month, down 35.7 percentage from October 2006 and the last gross sales count since at least 1988, the twelvemonth existent estate research house DataQuick first began tracking the market.

Sales of existing, single-family homes in the nine counties that touching the bay slid 41.3 percent, from 5,761 last twelvemonth to 3,384 in October, the house reported Thursday.

Although it was the 33rd calendar month in a row of year-to-year sales declines, the marketplace have been slammed in recent calendar months by a tightening in the mortgage market, which is making place loans harder to come up by and more than expensive.

Of peculiar concern in the high-priced Bay Area lodging marketplace is that the figure of elephantine loans, or those over $417,000, have slowed to a trickle. This summer, after higher defaults in the subprime sector - where mortgages were given to people with chancy recognition - investors stopped buying elephantine mortgages, leading purchasers to walk away from trades or avoid the marketplace altogether.

"We don't have got liquidness in the marketplace, and that's creating a driblet in marketplace value because people can't fold on a purchase," said San Francisco mortgage agent Leon Huntting.

According to DataQuick's analysis, the figure of places purchased using elephantine loans tumbled 50 percentage between July and October.

Price information demo a bifurcated market, with lessenings in many of the counties outside the region's urban core. For instance, in Solano County, the terms for a detached place plunged nearly 18 percent; in Sonoma County, the median value dropped nearly 12 percent.

On the impudent side, terms in Santa Clara County and San Francisco were up 7.4 percentage and 4.3 percent, respectively. Even in those submarkets, however, DataQuick analyst Saint Andrew LePage and others state the image is mixed. Gross Sales at the higher end of the marketplace are relatively lively compared with the less end, helping to pull the overall median value higher.

For all existent places in the Bay Area, the median value paid in October was $685,000, up 3.8 percentage from $660,000 in October 2006.

"Housing marketplaces stopping point to the seashore and occupation centres are holding up much better than in inland countries farther away from jobs," LePage said.

Vacaville, in eastern Solano County, was long an low-cost option for place purchasers who didn't mind a long commute to the interior Bay Area. But that marketplace have changed substantially within months.

Larry St. John, proprietor of an coverage brokerage, bought a place for more than than $900,000 early this twelvemonth in a new development on the city's northwest side. This weekend, St. Toilet said the detergent builder - DeNova Homes - is planning an auction bridge of more than than a twelve similar homes, with starting commands about $300,000 less than what recent purchasers paid.

"This is huge, this is our greatest investment," said St. John, 32, who have lived in Solano County his full life. "I can understand a corporation pickings losings to remain in business, but an individual taking a $300,000 hit is not something I have got got got the capacity to do."

As a householder in the Bay Area, "every couple of old age you have an chance to refinance and make some improvements and still have equity," St. Toilet added. "That doesn't go on calendar calendar month to month, but every few years. If you're starting off from a place of negative $300,000, that takes more than than than a few old age to rectify."

Unlike in other lodging downturns, when gross sales and terms slackened first near occupation centers, this moving ridge have rippled from the outside in - from countries with more plentiful land for building. In many of those communities, foreclosures are soaring and the purchasers who are willing to take the dip have got dozens of choice. But the rectification isn't limited to far-flung suburbs.

Last week, 44 places were repossessed by loaners in Santa Clara County, according to Richard Calhoun, proprietor of Creekside Real Property in San Jose. If that continues, Calhoun estimations one-half of all existent estate minutes in Santa Clara County could soon be made up foreclosure sales.

"If it acquires to that point, loaners are going to begin controlling the prices," Calhoun said. "Anyone who states that foreclosures aren't going to impact the Santa Clara lodging marketplace is crazy."

E-mail Emmett Kelly Zito at .