Even as month-to-month home prices rose this June in Silicon Valley's volatile housing market, home values for the year are off by as much as 20 percent and continue to point to a market more favorable for buyers.

Chances are, buyers will hold most of the cards for much of the remainder of the year.

The latest Bay Area Real Estate Market Newsletter, by San Jose based broker Richard Calhoun, owner of Creekside Realty, reveled median prices on closed sales of single-family homes in Santa Clara County (Silicon Valley) rose $13,500 from $532,500 in May to $546,000 in June for an increase of 2.5 percent.

After last year's double digit year-to-year price increases, the latest median is up only 1.1 percent from $540,000 in June 2000, and down 1.6 percent from February 2001's $555,000 median, according to the market newsletter.

Calhoun creates the report from the five-county pool of data supplied by the area multiple listing service, Campbell, CA-based R.E. Infolink.

"The median prices dropped less than actual individual property values. Based on this statistical analysis and market place activity, I believe property values are off about 20 percent from the January peak. The reason is that buyers who are willing to purchase in a buyer's market spend what they can qualify for," Calhoun said.

"There is clearly a trend of less homes selling over their asking price and more homes selling below the asking price," he added.

Silicon Valley's and the greater San Francisco Bay Area's housing market has fallen victim to soft economic times this year, due largely to a heavy dependence on the high-tech economy sector which has suffered from poor sales, lackluster revenues and mounting lay offs. This year is the first year since the mid 1990s that the housing market has seen some year-to-year price reductions, in addition to the trend of most homes selling for less than the asking price.

In Santa Clara County, the closed sale price median of $546,000 for single family homes in June this year was almost 3.5 percent less than the median list price of $565,000 for the same month.

"It is noteworthy that even in this buyer's market about 1/7 of the properties are still selling over the asking price," he added.

Meanwhile, condos proved the better bargain with a June median at $339,000 down from $349,000 in June and down further from $370,000 in February, but up slightly from $326,000 in June 2000.

Condos' closed sale price median of $339,000 for condos in June was 3.2 percent less than the list price median of $349,950.

Calhoun said the lower prices reflect inventories that increased rapidly from January's 826 single-family homes for sale to the peak of 4,433 in May. Since then, inventories have dwindled somewhat with the seasonal buying trend. The number was down to 4,154 on July 5, about 1,000 listings short of the region's record 5,104 listings in July 1995.

Sellers may be faring better in the nearby counties of San Mateo, Santa Cruz and Monterey counties where inventories are at about 60 percent of their previous peaks.

Another telling statistic is the Days of Inventory (DOI) count, a theoretical figure that indicates the number of days the current inventory will last at the current rate of sales, provided no new homes come on the market.

DOI increased rapidly from 39 on January 1, peaked at 160 on April 21 and improved to 116 by July 5, again reflecting some pressure from a lackluster seasonal buying surge.

"Although increasing slowly, sales per day has been relatively flat considering we have moved from the holiday season to the peak selling season, but other areas of the U.S. and California regularly have DOI levels at eight to 10 months which is significantly higher than the four to five month record for Santa Clara County," Calhoun said.

"The relatively low DOI compared to other areas would indicate Santa Clara County remains a desirable place to live, despite the traffic and high cost of living," he added.

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