Home prices continue downward trend

Sonoma County home prices continued their plunge in February as sales slowed to a crawl.

Only 254 new homes, resale homes and condominiums were sold in February, down 43.9 percent from a year ago, according to a report issued Thursday by DataQuick Information Systems, a real estate data firm.

The median price tumbled to $400,000, down 22.3 percent from a year ago — the biggest drop in the nine-county Bay Area.

So far this year, the region’s real estate is off to its slowest start since DataQuick began tracking home sales in 1988.

The credit crunch, which has made it difficult for buyers to obtain loans, has brought the region’s housing market to a near standstill, said Marshall Prentice, DataQuick president.

“The lending system has been in lockdown mode the last half year,” Prentice said in a statement. “We can only conclude that a lot of activity is just on hold, hence the spectacularly low sales counts.”

Most buyers in the Bay Area have needed so-called jumbo loans, which have been particularly difficult to get in recent months. Until last week, buyers seeking to borrow more than $417,000 were required to obtain jumbos, which are more expensive than conforming loans backed by federal lenders Freddie Mac and Fannie Mae.

In an attempt to pump more money into the housing market, federal housing agencies agreed last week to temporarily back loans up to $662,500 in Sonoma County and as high as $729,750 in pricier parts of the Bay Area.

The program could stimulate sales of higher-priced homes, Prentice said.

“With the Federal Reserve trying to pour Draino into the lending system, it will be interesting to see how things play out if jumbo financing does come back online. Theoretically, there could be enough pent up demand, enough catch-up activity at the high end, to result in a statistically bizarre record median home price,” he said.

The median price paid for a Bay Area home was $548,000 in February, down 11.6 percent from a year ago. Prices would have been closer to $600,000 if the availability of jumbo loans had remained stable, DataQuick reported.

A year ago jumbos accounted for 59.8 percent of all Bay Area home loans. Last month they were 28.9 percent.