Bay Area Home Prices Show Stabilization

More positive news in the national media about the Bay Area real estate market, which seems to be turning the corner. According to Zillow.com, Bay Area home values (median sales price) in the 3rd quarter declined 8%, but was up 1.2% over the 2nd quarter. The percentage of homes with negative equity declined in the 3rd quarter as well, with 25% of the homes underwater in the 3rd quarter, down from 30% at the end of the 2nd quarter.

According to Stan Humphries , Zillow.com’s chief economist “In the Bay Area, we’ve seen a lot of stabilization over the course of the 2009 selling season,” he said. “A lot of the stability that has occurred in the past six months has really been attributed to a very strong selling season, which has been fueled by the presence of the (first-time home buyer tax credit recently extended by Congress), historically low interest rates and also by the fact that affordability was substantially improved by the home value declines that already occurred,” he said.

Obviously, this is more good news to add to the speculation that the worst of the housing crisis is behind us. Indeed, with low inventory levels and strong demand, it is likely that we will continue to see an upward tick in the median home price as we head into next year, especially now that the First time buyer tax credit has been extended and interest rates continue to stay near historic lows. Stay tuned…

Courtesy of the Contra Costa Times