Bay Area Housing Recovery is Right Around the Corner. Now Where's the Corner?

If you've been following news suggestive of an economic boom underway in Silicon Valley, you might have guessed that its housing market was coming back as well. Well. if the first-quarter housing data released today by Zillow.com is any indication, you'd be very, very wrong.

According to the Contra Costa Times, about a third of the homes sold this quarter in San Mateo and Santa Clara Counties went at a loss. One in five houses sold was a foreclosure resale, leading to a drop in home values in both counties. Unsurprisingly, the decline was concentrated at the mid-to-lower price tiers.

Zillow's data on the rate of underwater mortgages were even less encouraging, as 14.7% of Santa Clara County homes and 17.5% of San Mateo County homes are now worth less than the amount of their mortgage. Things get even worse in this regard if you look at the rest of the Bay Area. In Alameda County, 22.8% of homes are underwater; in Contra Costa County, 38% are. Worst off in the Bay is Solano County, where an astounding 58.4% of mortgages are underwater, but San Joaquin County (57.5%) isn't doing much better. Across the nine-county region, 25.7% of homes suffer negative equity, and home values plunged 8.4% from the first quarter of 2010. Zillow's chief economist doesn't expect the picture to start improving until late 2012.

Just something to keep in mind the next time you hear President Obama talk about the great recovery we're experiencing now.