A month and a half into this new year and there are already plenty of peaks and valleys. The California legislature finally got the budget impasse resolved and President Obama unveiled a new $75 billion mortgage relief plan. The plan, in essence, is designed to help homeowners avoid foreclosure thereby shoring up the real estate market. In turn, the economy would get a boost from a strengthened real estate market. It all sounds good. Let’s hope it plays out the way its supposed to.

While we are on the topic of foreclosures, let’s take a peak at how the month of January fared in downtown San Jose. January is typically a slower month in terms of closed sales since the preceding month of December includes the holidays, a time when most people are shopping for Christmas presents and not necessarily shopping for real estate. The number of closed transactions didn’t change much from December 2008 to January 2009, but the median sales price and total sales volume both declined. Total dollar sales volume dropped 35% in January 2009 despite there only being two less sales than in December 2008. An even more noticeable decline appears when comparing sales statistics from January 2009 to the same time period last year, January 2008. This past January finds a 43% decline in total sales volume from January 2008 despite again only having two less closed transactions.

So why the big decline in sales volume over a two month period and when comparing year-to-year? Not surprisingly, its the foreclosures! Bank-owned properties accounted for half the closed transactions in January 2009. In addition, the four lowest priced transactions during the month were foreclosed properties. In January 2008, the lowest priced home sale was $255,000. One year later, half the transactions closed under $260,000 in January 2009. Just a sign of times.

Reminder: The following statistics represent resales of Central San Jose’s (MLS Area 9 which includes downtown San Jose) condos, townhomes, and lofts. As noted in past statistical postings, these numbers may not include sales from new construction developments. New developments may or may not provide information to the MLS.

*The above statistics are generated using information from the MLSListings, Inc. (formerly RE InfoLink) MLS, but have not been verified and are not guaranteed. MLSListings, Inc. disclaims any resposibility for the accuracy and reliability of these statistics. This information should not be relied upon for real estate transaction decisions.