The Real Estate Market in Bay Area in the Rebound from the Foreclosure Crisis

The real estate market in Bay Area in the rebound from the foreclosure crisis is reacting in wild manner – going hither thither. But underlying the chaos is the thread of truth – it is the location that is the most important rule in the housing market.

Many of the rich cities are reaching once more the heady peaks of days of the housing bubble but in other cities where the middle and working class reside recovery is still a far cry. The disparity is obvious in communities neighbouring each other.

The median price in East Palo Alto’s is $246,000 in this third quarter – it being 62% drop from price noted in 2007 second quarter of $650,000. But nearby 101 leafy Palo Alto where there are clusters of high-tech firms and business houses the median price is $1.4 million – only 12% less than the high points reached in the year 2008.

However it should be noted that the price of properties in the affluent communities never made a sharp drop as compared with cities that were mauled by the sub-prime mayhem. Thus recovery to them is comparatively easier. Speaking generally the prosperous regions are about 20% below the heights reached while in the other areas it is 50% below. This is the conclusion drawn after studying the quarterly median price range.

The data of home prices was drawn up by DataQuck. Their analysis shows that for many of the cities, the present levels could now be the new norm.

Sean O’Toole of ForeclosureRada said, "I think most areas have corrected to affordable levels". Some other cities have gained from the boom in technology and social media. This has led to high incomes causing a shortage of good housing in these regions.

But in other parts where the tumble in prices have been sharp in the Bay Area, thousands of house owners seem to be saddled with houses whose prices will not go back to the original price until a good number of years. For them the age old practice of trading the old house for a more costly one will remain a dream.

Collen Badagliacco of Aletera Real Estae said, "The trade-up buyers are scarce. They’ve lost equity. You used to buy up in a down market because maybe the financing was easier, and now the financing isn’t easier and the classic person may not have the equity to move up".