Bay Area Home Sales and Prices Up

November 14, 2012

La Jolla, CA.--The number of homes sold in the Bay Area increased on a year-over-year basis for the sixteenth month in a row in October while the median price paid rose for the sixth month, the result of a gradual rebalancing of the real estate market. Mortgage availability remains an issue, a real estate information service reported.

A total of 7,795 new and resale homes were sold in the nine-county Bay Area last month. That was up 13.8 percent from 6,850 in September, and up 21.0 percent from 6,444 for October 2011, according to San Diego-based DataQuick.

Sales for the month of October have varied from 5,486 in 2007 to 13,392 in 2003, while the average for all months of October since 1988, when DataQuick’s statistics start, is 8,587.

Last month sales continued to fall below year-ago levels in the lower price categories and rise sharply in the middle and high end of the market. October transactions below $300,000 fell 15.2 percent compared with a year earlier, while sales in the $400,000 to $800,000 range rose 25.7 percent, and deals above $800,000 jumped 47.1 percent from last October.

The median price paid for a home in the Bay Area was $416,000 last month. That was down 3.0 percent from $429,000 in September and up 18.9 percent from $350,000 in October a year ago. The year-over-year percentage increase was the highest since May 2010, when the $410,000 median rose 20.1 percent.

The median’s low point of the current real estate cycle was $290,000 in March 2009. The peak was $665,000 in June/July 2007. Around half of the median’s peak-to-trough drop, as well as half the median’s current year-over-year increase, was the result of a shift in the sales mix.

“We’re still watching the market regain the ground it lost after 2007. It’s unclear exactly much of today’s apparent price increase reflects actual growth, and how much reflects a change in market characteristics. The two factors obviously play into each other. We’re definitely seeing less distress and foreclosure activity, and more mid- to up-market sales. Supply is limited, and getting through the mortgage process is still rough,” said John Walsh, DataQuick president.

Last month distressed property sales – the combination of foreclosure resales and “short sales” – made up about 33 percent of the resale market. That was down from about 38 percent in September and down from about 63 percent in October 2011.

Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 12.0 percent of resales in October, down from a revised 14.1 percent in September, and down from 25.3 percent a year ago. Last month was the lowest since foreclosure resales were 10.1 percent in November 2007. Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average for foreclosure resales over the past 17 years is about 10 percent.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 21.4 percent of Bay Area resales last month. That was down from an estimated 23.5 percent in September and down from 24.9 percent a year earlier.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 38.9 percent of last month’s purchase lending – the highest since November 2007, when it was 43.4 percent. Last month’s figure was up from a revised 34.7 percent in September, and up from 27.9 percent a year ago. Jumbo usage dropped to 17.1 percent in January 2009. Before the credit crunch struck in August 2007, jumbos accounted for nearly 60 percent of the Bay Area purchase loan market.

Adjustable-rate mortgages (ARMs), an important indicator of mortgage availability, accounted for 11.8 percent of the Bay Area’s home purchase loans. That was up from a revised 11.5 percent in September, and down from 12.9 percent in October last year. Since 2000, ARMs have accounted for 49.1 percent of all purchase loans. ARMs hit a low of 3.0 percent of loans in January 2009.

Government-insured FHA home purchase loans, a popular choice among first-time buyers, accounted for 15.5 percent of all Bay Area home purchase mortgages in October, up from 15.4 percent in September and down from 21.2 percent a year earlier. Over the last few months the FHA level has been the lowest since summer 2008.

The most active lenders to Bay Area home buyers last month were Wells Fargo with 14.6 percent of the market, RPM Mortgage with 3.1 percent and Princeton Capital with 2.7 percent.

Last month absentee buyers – mostly investors – purchased 22.8 percent of all Bay Area homes, down from 22.9 percent in September, and up from 20.2 percent a year ago. Absentee buyers paid a median $302,000 in October, up 23.3 percent from a year ago.

Buyers who appear to have paid all cash – meaning no corresponding purchase loan was found in the public record – accounted for 29.1 percent of sales in October. That was up from 28.3 percent in September, and up from 28.5 percent a year ago. The monthly average going back to 1988 is 12.4 percent. Cash buyers paid a median $300,000 in October, up 20.0 percent from a year earlier.

San Diego-based DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Because of late data availability, sales were estimated in Alameda and San Mateo counties.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $1,472. That was down from $1,535 in September, and up from $1,348 a year ago. Adjusted for inflation, last month’s payment was 47.9 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 61.5 percent below the current cycle's peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but well below peak levels reached over the last three years. Financing with multiple mortgages is low, down payment sizes are stable, DataQuick reported.


SalesVolume MedianPrice
All homes Oct-11 Oct-12  % Chng   Oct-11 Oct-12  % Chng  
Alameda                 1,308      1,618     23.7%     $340,000     $384,000      12.9%
Contra Costa            1,329      1,454      9.4%     $250,750     $302,500      20.6%
Marin                     230        335     45.7%     $602,909     $660,000       9.5%
Napa                      102        152     49.0%     $310,000     $365,000      17.7%
Santa Clara             1,417      1,718     21.2%     $450,000     $535,000      18.9%
San Francisco             448        572     27.7%     $635,000     $794,500      25.1%
San Mateo                 566        717     26.7%     $525,000     $626,500      19.3%
Solano                    554        598      7.9%     $188,000     $216,000      14.9%
Sonoma                    490        631     28.8%     $283,500     $350,000      23.5%
Bay Area                6,444      7,795     21.0%     $350,000     $416,000      18.9%

Source: DataQuick, www.DQNews.com

Media calls: Andrew LePage (916) 456-7157

Copyright 2012 DataQuick. All rights reserved.
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