It's almost a tale of two markets in the San Francisco Bay Area.
Closer to the city, home sales continue to drop, down 20 to 30 percent from a year ago, but in outlying areas sales are up by as much as 100 percent from a year ago, according to DataQuick. Much of that sales increase in the outlying areas has been driven by foreclosures, which are pushing prices down by close to 50 percent in some suburbs.
|Home sales have started to rebound in the far suburbs of the Bay Area, as rising foreclosures bring people back into the market.|
Not surprisingly, those declining prices have helped to slow remodeling activity, even in the more stable areas, say local Market Leaders.
"Even though people have equity, they know their homes aren't worth as much," says Michael McCutcheon, president of McCutcheon Construction in Berkeley, Calif. "Right where I am, the houses have declined 5 or 10 percent, but a 15 to 30-minute drive will bring you to places where the houses are off 30 to 50 percent."
The biggest issue is confidence, says Iris Harrell, CEO of Harrell Remodeling in Mountain View, Calif. People are worried about declining home prices, but more importantly they are concerned about their jobs, she says. Homeowners are holding off on all but the most necessary projects as they wait for positive signs from the economy.
"We're seeing a lot of maintenance and repair work," she says. "There has to be a really compelling reason for people to go ahead and start now."
|“We’re seeing a lot
of maintenance and
repair work. There
has to be a compelling
reason for people to
go ahead and start
[a project] now.”
— Iris Harrell
That said, both Harrell and McCutcheon see reasons for optimism in the market. In the liberal-leaning Bay Area, there's a renewed sense of enthusiasm since President Obama was elected, McCutcheon notices. Lead activity has also started to pick up, Harrell says, as homeowners start to feel that the worst may have passed.
"The feeling of panic and things continuing to go down, I think that's over," she says. "I think the bottom has definitely been hit."
San Francisco Market Leaders
|American Home Renewal||Exterior remodeler||$14 million|
|Harrell Remodeling||Design/build remodeler||$11,039,000|
|McCutcheon Construction||Design/build remodeler||$6,452,645|
|Schiller Construction||Design/build remodeler||$4,070,530|
|Creative Spaces||Full-service remodeler||$2.5 million|
|*The 2009 Market Leaders list will appear in the October issue.|