Dataquick: Increase in Bay Area Home Sales and Median Price

by 17 May 2012

La Jolla, CA.----Bay Area home sales increased last month to their highest level for an April since 2006. The median sale price rose year-over-year for the first time in 19 months, reaching its highest point since September 2010 amid indications that market stress is easing and fence-sitters are moving to take advantage of lower prices and ultra-low mortgage rates, a real estate information service reported.

     A total of 7,675 new and resale homes sold in the nine-county Bay Area last month. That was virtually unchanged from 7,694 the prior month, and up 13.1 percent from 6,789 in April a year ago.

     Last month’s sales were the strongest since 2006, when 9,129 homes sold. Since 1988, when DataQuick’s statistics start, April sales have varied from 6,310 in 2008 to 14,430 in 2004. The average is 9,088.

     “It appears that the market is taking a step in the direction of normalization, but only a step. We’re still watching technical indicators more than top-line sales counts and median prices. The mortgage market is critical, as is market mix and the receding importance of foreclosure resales,” said John Walsh, DataQuick president.

     “The uptick in the median sale price was to be expected. It gets tugged up as foreclosure resales ebb and activity picks up in the move-up markets, especially in higher-cost coastal areas. We’re seeing the exact same trends with the median on the upside that we saw when it was coming down, just in reverse,” he said.

     The median price paid for all new and resale houses and condos sold in the Bay Area last month was $390,000. That was up 8.9 percent from $358,000 in March, and up 8.3 percent from $360,000 in April 2011. The year-over-year increase was the first since September 2010, when the $395,000 median was up 8.2 percent from $365,000 a year prior.

     The 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 was the result of a decline in home values, while the other half reflected a shift in the sales mix.

     Last month distressed property sales – the combination of foreclosure resales and “short sales” – made up about 40 percent of the resale market. That was down from about 44 percent the month before and 45 percent a year ago.

     Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 21.7 percent of resales in April, the lowest since 18.8 percent in January 2008. It was down from a revised 25.5 percent in March, and down from 27.8 percent a year ago. 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 18.1 percent of Bay Area resales last month. That was down from an estimated 18.9 percent the prior month and up from 17.4 percent a year earlier.

     Last month 37.6 percent of Bay Area sales were for $500,000 or more, up from a revised 33.4 percent in March and up from 36.1 percent in April 2011. The low for the current cycle was January 2009, when just 22.7 percent of sales crossed the $500,000 threshold. Over the past 10 years, a monthly average of 47.7 percent of homes sold for $500,000-plus.

     Government-insured FHA home purchase loans, a popular choice among first-time buyers, accounted for 18.4 percent of all Bay Area home purchase mortgages last month, down from 20.9 percent the month before and 25.0 percent a year earlier. Last month’s FHA share was the lowest since August 2008, when it was 14.7 percent. 

     One indicator of mortgage availability improved in April, when 14.7 percent of the Bay Area’s home purchase loans were adjustable-rate mortgages (ARMs). That was up from a revised 11.6 percent in March, and down from 15.4 percent in April last year. Since 2000, ARMs have accounted for 50.2 percent of all purchase loans. ARMs hit a low of 3.0 percent of loans in January 2009.

     Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 35.5 percent of last month’s purchase lending, up from a revised 30.7 percent in March, and up from 32.2 percent a year ago. Last month’s percentage was the highest since July 2010, when 36.4 percent of all purchase loans were jumbos. 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.

     Last month absentee buyers – mostly investors – purchased 23.7 percent of all Bay Area homes sold, down from 24.2 percent the prior month and up from 21.1 percent a year ago. Absentee buyers paid a median $270,500 last month, up from $250,000 the month before and $257,000 a year ago.

     Buyers who appear to have paid all cash – meaning no evidence of a corresponding purchase loan was found in the public record – accounted for 28.8 percent of sales in April. That was down from 29.4 percent in March, and up from 27.4 percent a year ago. The monthly average going back to 1988 is 12.4 percent. Cash buyers paid a median $270,000 in April, up from $250,000 the prior month and $262,000 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 $1,473, up from $1,359 in March, and down from $1,518 a year ago. Adjusted for inflation, last month’s payment was 47.4 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 61.1 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 below peak levels reached over the last few years. Financing with multiple mortgages is low, down payment sizes are stable, DataQuick reported.

 

(chart)

All Homes           #Sold    #Sold     Pct.    $Median      Median      Pct.

                                Apr-11   Apr-12     Chng     Apr-11      Apr-12      Chng

Alameda                1,345    1,476     9.7%   $338,000    $335,000     -0.9%

Contra Costa         1,399    1,546    10.5%   $258,500    $288,750     11.7%

Marin                     241      292    21.2%   $660,000    $618,000     -6.4%

Napa                       122      120    -1.6%   $317,500    $317,500      0.0%

Santa Clara            1,645    1,862    13.2%   $470,000    $513,500      9.3%

San Francisco         422      509    20.6%   $655,000    $700,000      6.9%

San Mateo             584      783    34.1%   $550,000    $550,000      0.0%

Solano                568      557    -1.9%   $185,000    $175,000     -5.4%

Sonoma                463      530    14.5%   $295,000    $304,500      3.2%

Bay Area            6,789    7,675    13.1%   $360,000    $390,000      8.3%

 

Source: DataQuick, DQNews.com

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