What's Happening in Today's Market

We're now about 3 years past what turned out to be the height of the real estate market bubble. In the higher priced areas, the number of sales remains down from a few years ago. In Walnut Creek, for example, the number of sales in the first quarter of 2009 is down 32% from the same period in 2006. What is notable though, is the number of sales in lower priced areas like Concord, Martinez, and especially Antioch & Brentwood. The number of sales in those areas is dramatically higher than we've seen in quite some time. The reason for all the activity in those areas is mainly lower prices. Prices have fallen so far in Concord, for example, that the median price of a home sold in the first quarter there is hovering around $200,000, down 63% from the median price of $535,000 back in the first quarter of 2006. Prices have fallen faster in many of the lower priced areas in Contra Costa County. This is due mainly to more foreclosures in those areas, and banks anxious to sell those homes to get them off their balance sheets. For the first time in many years, buyers that thought they might be priced out of the market and now able to find affordable homes. It's also clear that buyers in these lower priced areas sense a bottom to the market. Multiple offers and homes selling higher than their asking prices are common these days in many neighborhoods. You can see in the table how different the price depreciation has been depending on location. The number of home sales in Concord in the first quarter rose 92% over the same period last year. In Antioch, the number of sales rose 127%! Remember that the downturn started in these lower prices areas, and it's likely to see a bottom and a turnaround before sales start to increase in higher priced areas. We're also likely to see further price depreciation in the short term in many of these higher priced areas.