Monday, July 18, 2016

SF Bay Area home prices finally drop

SF Bay Area home prices are starting to drop and they already dropping sharply. Very soon SF Bay Area will become a buyer’s market.

In San Francisco Bay Area, where the average home price is $1.5 million and the average income is $175,000 per year. Given a person’s typical HOA fees, homeowner's insurance costs, credit card and car debts, the average homebuyer can afford just a $778,000 home, nearly 50% below the average priced $1.5 million home. As result the home prices started to revert to their fundamental values and they started to do it really fast.

For example, 3 bedroom/2 bathroom home located on 1018 Hazel Ave in Campbell was offered almost two month ago for $1,049,999 and now almost two month later it still on the market, but the price was lowered several times already and the current asking price is $899,988. That's $150,000 or almost 15% down. Could you image it last year?

By the way this house was sold for $724,000 in 2007 on the peak of San Francisco Bay Area real estate bubble. Technically the home price surpassed 2007 peak levels, but the home is not sold yet.

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