Good points, all. Digging deeper into the data reveals some interesting facts. First, those median home values in Washington DC look like a bargain to anyone living in San Francisco. In our worst years we could never find anything at those prices.
The data I found for San Francisco is listed by number of bedrooms, the average price and the year sold. Here is the current one-year increase in values (average sales price) by number of bedrooms:
1 bedroom +8.7%
2 bedroom +26.3%
3 bedroom +31.7%
4 bedroom +43.5%
Great news, no? Not really. Here is the number of bedrooms, with the percent increase/decrease, comparing the median price this year to the median price 5 years ago:
1 bedroom -13.2%
2 bedroom +4.8%
3 bedroom +2.4%
4 bedroom +10.4%
To give a relative comparison, the median price for a 4 bedroom in San Francisco is $1.2 million.
Angie is right. The number of unsold properties does affect prices. But I think what Chopera was getting at is that there can be regional hot-spots in an otherwise down market. Many of the unsold properties seem to be concentrated in specific areas. There are other parts of Spain where the percent of vacant properties is not that bad. Of course the prices are depressed everywhere, by the global economic crisis, the relentless stream of bad news coming out of Spain, and in areas where they have over-built, that adds additional, downward pressure. But if my dream was to live in San Sebastian or Barcelona, I’d be looking to buy now.
As the banks are reluctant to provide mortgages, I do believe that Spain made a huge mistake by bailing-out the banks. Instead, they should have set-up the their own mortgage lending department and used that money to get people buying property. Yes, I know, the government can be pretty corrupt…but certainly not as corrupt as the banking industry.
I always choose the lessor of two evils.