Under the ominous headline "Bay Area Home Prices Continue To Drop" the Contra Costa times reported that home prices in the Bay Area fell 27% from June 2007 to June 2008. However, if you read between the lines you get a clearer picture of what is going on in the real estate market today.

Let's say that in June 2007 a home in Walnut Creek sells for $800,000 and a home in Antioch sells for $200,000. The median price of homes sold in the "Bay Area" during June 2007 would then be $500,000. However, if during June 2008 no home sells in Walnut Creek and two homes sell in Antioch for $200,000 each, then the median price of homes sold in the "Bay Area" during 2008 would be $200,000: a whopping 60% decline in "Bay Area" home prices and enough to scare away any homebuyer right?

But if you look at the price of the Antioch homes used in this example, from June 2007 to June 2008, you see that the price hasn't changed. And the price of the Walnut Creek home on the market in June 2008 hasn't changed because it didn't sell. What has changed is the mix of what is selling. The Contra Costa Times glossed over this very important issue by simply stating "Bay Area home prices continued to spiral downward in June due to a combination of sellers settling for less, more aggressively-priced foreclosures and sales activity increasing in less-expensive inland areas." Notice the last part of this sentence: sales activity increasing in less-expensive inland areas." If more lower priced homes are selling then of course the median price is going to come down! That doesn't mean the sky is falling. It means homes are selling.

Now to be fair, prices have come down in Antioch a lot, by as much as $100,000 from December 2007. But prices are starting to move upwards and it is difficult for many home buyers to find anything available to write an offer on. Sure there are plenty of foreclosures on the market but there are more buyers than there are foreclosures, as long as they are priced right.

I have written numerous offers on homes in the past six weeks that have received as many as 30 offers. While some of those offers may have come from the same buyer making offers on several homes it still indicates that the buyers are out there. Many homes have sold for thousands over the asking price: one home was listed at $385,000 and sold for $450,000 while another was listed for $389,000 and sold for $485,000. One listing on the MLS stated that the agent already had 31 offers in hand. And these are not isolated examples.

On July 18, 2008 the MLS listed 436 non-short-sale homes as Pending in Antioch while 670 non-short-sale homes were on the market in Antioch and actively looking for a buyer. This means that an incredible 39% of the non-short-sale homes on the market in Antioch are Pending: 39% and this does not include short-sale homes!

The doom and gloom crowd can say what they want. Homes are selling and selling fast in East Contra Costa County. While this is not the "Bay Area" it still represents a significant population base and if you are planning on buying a home in the area this is the best time to do so since 2001 because prices are back to 2001 prices. www.contracostatimes.com