High-End Housing Market Suffering in East Bay, California

As the California housing market shifts, various sectors must react to the changes.

One of them may be the high-end, expensive real estate market, the resiliency of which is coming to an end in the East Bay.

Inventory of high-end homes in Contra Costa County rose 46.2 percent in the third quarter, more than any other Bay Area county, according to data compiled by Alain Pinel Realtors.

There were 215 properties listed at $1.5 million to $2.5 million, considered the “high end” of the market, in the county during the quarter, compared to 147 in that category in the third quarter of 2005, according to the report compiled from multiple-listing services in seven counties.

In the “luxury” home category, priced $2.5 million and above, Contra Costa showed a 28.13 percent inventory increase year over year, from 64 in the third quarter of 2005 to 82 this year.

Sales were also down in the county, from 134 in the high-end category in the third quarter of 2005 to 88 this year, a 34.33 percent drop, according to the report. The luxury category fared better, with 24 homes sold last quarter compared with 23 in the same period a year earlier.

Alameda County showed a 25 percent sales dip at the $2.5 million or greater level during the third quarter, with 15 sales versus 20 in the same period a year ago. It appears as though even the well off are remaining on the sidelines until prices improve, as demand for home loans at this range has decreased greatly.

In the high-end group, sales declined 21.8 percent from 87 units in the third quarter of 2005 to 68 in the quarter that just closed. Inventories of high-end homes were up 6 percent year over year. The stock of luxury homes increased by 7.14 percent.

In the seven-county area covered by the report, which also includes San Francisco, San Mateo, Santa Clara, Santa Cruz and Monterey counties, luxury home sales shrank from 214 last year to 210. High-end home sales dipped 23 percent, from 840 in the third quarter of 2005 to 645 in the most recent quarter.

The inventory of luxury homes in the seven-county region climbed from 740 in the third quarter of 2005 to 851 as of Sept. 30, a 15.2 percent increase, according to Alain Pinel’s report. The inventory of high-end homes rose 12 percent in the region for the year-over-year comparison.

Alain Pinel’s vice president of marketing, Ginny Cain-McMurtrie, said the data appeared to support the real estate company’s long-held theory that the high-end market was more likely to mirror the performance of the median home market when it came to popularity of mortgages.

“However, I would caution that one quarter does not constitute a long-term trend,” she said.