January 6, 2008

…And the Prices Go Down, Down, Down

Robert Hall (not pictured) was a well-known discount department store of the ’60s, according to this wonderful Web site on the subject full of photos like the one on the left. The store’s ads contained the lines, “Oh, the values go up, up up - and the prices go down, down, down,” and this is indeed the case for Contra Costa County real estate, specifically in Richmond, as we can see from some numbers supplied by Altos Research.

First, prices have plunged from a median of $450,000 on May 1 of last year, to a median of $399,071 as of Jan. 6 of this year, essentially a $50,000 drop in the median price.

The market index, an indication of the robustness of the market, was around 20 or so on May 1, 2007 (below 30 is a buyer’s market).  As of Jan. 6, it was 16.95, even more of a buyer’s market.

Houses are selling slowly, at least compared to the frenetic seller’s market that is rapidly becoming only a memory. The average property has been on the market about 76 days, as of Jan. 6, which is actually a little less time than in May of this year, but still, obviously, more than two months and still unsold.

The price per square foot has fallen from around $350 in May to about $307, and there are a jaw-dropping 791 properties on the market as of Jan. 6. That last number made the biggest impression on me. I mean, how long is it going to take for that many homes to sell?