Like the rest of the nation, Capitola, located in the Bay Area of California, continues to suffer economically due to the current economic recession. Although the Bay Area real estate is more successful compared to that of 2008, the number of Bay Area homes for sale continues to rise and fall, without showing signs of consistent improvement.
According to DQNews.com, the real estate in the Bay Area continues to be unstable, with home sales falling significantly in August from July. However, the rate of home sales in Capitola is still higher than a year ago for the 12th consecutive month. DQNews.com has also reported a decline in the median home prices over the previous month. Approximately 7,158 new and resale homes and condos were sold in August, which was down 14.3 percent from July, but up 4.0 percent from August 2008. The reason for the drastic drop in Bay Area home sales is due primarily to the rapidly declining number of low-end and foreclosed homes, which offer many home-buyers the “bargain” prices that many are looking for. The number of foreclosed properties that were sold in August fell 15.2 percent from July. Many home-buyers are becoming frustrated at the lack of the affordable housing that they are searching for, especially with job security and future foreclosures being major concerns in the region. On another note, median home prices for the Bay Area real estate dropped 8.9 percent from $395,000 in July to $360,000 in August. The current median home prices are also down 19.5 percent from August of 2008. The main reason for the decline in the median price of all new and resale home prices is primarily due to people buying homes in more low-end inland regions.
According to the San Francisco Business Times, they expect the Bay Area real estate to continue to suffer for the months to come. With unemployment numbers continuing to rise and the current economic troubles the state of California is facing, it seems that the economy in the region will still continue to suffer. Home prices in all areas except the South Bay are reported to have bottomed out, and although there will probably still be a slight decline in the next few months, people are optimistic that after that the real estate in the Bay Area will begin to make its recovery.