For
immediate release
Business editors/real estate writers
Bay
Area July Home Sales Down Sharply; Median Price Slips From
June
La
Jolla, CA ----Bay Area home sales dropped sharply last month to the lowest level
for a July in 15 years as the economy sputtered along and the housing market
adjusted to life without federal home buyer tax credits. The median sale price
dipped below the prior month and rose only slightly from a year earlier, a real
estate information service reported.
Last month a total of 6,773 new and resale homes closed escrows in the
nine-county Bay Area, down 19.1 percent from 8,373 in June and down 22.8 percent
from 8,771 in July 2009, according to MDA DataQuick of San
Diego.
It
was the slowest July since 1995, when 6,666 homes sold. Last month’s sales were
28.8 percent lower than the July average of 9,515 transactions since 1988, when
DataQuick’s statistics begin.
July’s 22.8 percent year-over-year sales decline was the largest for any month
since May 2008, when sales fell 23.1 percent from a year
earlier.
On
average, Bay Area sales have declined 6.3 percent between June and July – about
one-third of last month’s 19.1 percent drop, which was the largest since 2006,
when sales fell 21.7 percent between June and July.
“There was more to last month’s sales drop than expiring federal home buyer tax
credits, but we think they were the main reason the decline was so sharp. As the
boost from the credits waned, low mortgage rates just weren’t enough to outweigh
the weak economic recovery and low consumer confidence,” said John Walsh, MDA
DataQuick President.
“There’s been a pause in the market. Some potential buyers – including those who
held off until the tax credits expired – will take their time to assess market
conditions, searching for signs of renewed price cuts. Depending on the economy
and other factors, that might be what some of them find, especially in areas
with a growing number of homes for sale – particularly distressed
properties.”
Last
month the median paid for all new and resale houses and condos combined was
$402,000, down 2.0 percent from $410,000 in June but up 1.8 percent from
$395,000 in July 2009.
Last
month marked the first in which the median fell month-to-month since April this
year, when it dipped 2.6 percent from March. It was the same, $410,000, in May
and June.
On a
year-over-year basis, the Bay Area median has risen for 10 straight months,
though July’s gain was the smallest in that series. July’s median was 39.5
percent below the $665,000 peak in June/July 2007. The post-boom low was
$290,000 in March 2009. The median’s peak-to-trough plunge was caused by a
decline in home values as well as a huge shift in sales toward lower-cost homes,
especially inland foreclosures.
Last
month foreclosure resales – homes that had been foreclosed on in the prior 12
months – made up 26.1 percent of the Bay Area’s resale market. That was up
slightly from 25.6 percent in June and down from 33.6 percent in July 2009.
Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average
for foreclosure resales over the past 15 years is about 8
percent.
In
July, sales in higher-end neighborhoods represented a greater portion of overall
transactions than a year ago. Last month 39.8 percent of the sales were for
$500,000 or more, roughly even with 40.1 percent in June but up from 36.7
percent last year. Sales over $800,000 rose to 18.0 percent of July sales, up
from 17.1 percent in June and 14.4 percent in July 2009.
Viewed a different way, sales of existing single-family houses in zip codes
representing the top one-third of the market, based on historical prices,
accounted for 35.7 percent of all sales in July, up from 35.0 percent in June
and 32.0 percent a year ago. Those higher-end areas’ contribution to regional
sales had dropped as low as 18.0 percent in January 2009, while the peak was
44.7 percent in June 2007, and the decade-long average contribution is 33.3
percent.
Today’s high-end sales would likely be stronger if jumbo and adjustable-rate
mortgages (ARMs) were easier to obtain.
Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for
36.1 percent of last month’s purchase lending, up from 34.5 percent in June and
up from 30.2 percent in July 2009 and a post-housing-boom low of 17.1 percent in
January 2009. Last month’s jumbo level was the highest since December 2007, when
it was 38.7 percent. Before the August 2007 credit crunch, however, jumbos
accounted for nearly 60 percent of the Bay Area purchase loan
market.
In July, 10.3 percent of all home purchase loans were ARMs, down from 12.2
percent in June but up from 6.6 percent a year ago. The average monthly ARM rate
over the last decade is nearly 50 percent. ARMs hit a low of 3.0 percent in
January 2009.
Last month federally-insured FHA loans continued to play a key role in fueling
first-time buyer and some move-up purchases. The low-down-payment loans made up
23.3 percent of Bay Area purchase lending last month, down from 25.0 percent in
June and down from 24.1 percent a year ago. Two years ago FHA loans were just
12.7 percent of purchase mortgages.
Absentee buyers – mostly investors – purchased 17.0 percent of all Bay Area
homes sold last month, paying a median $260,000, which is up from a median of
$209,000 a year ago. Buyers who appeared to have paid all cash – meaning there
was no corresponding purchase loan found in the public record – accounted for
24.7 percent of sales in July, paying a median $255,000, which is up from a
median $220,000 a year ago.
Home flipping has trended higher over the last year. Last month 2.6 percent of
the homes that sold on the open market had been flipped, meaning bought and
re-sold within a six-month period. That was up from a Bay Area flipping rate of
2.1 percent in June and up from 1.7 percent a year earlier. Last month’s
flipping rates varied from 0.9 percent in San Francisco to 4.3 percent in Napa
County.
San
Diego-based MDA DataQuick is a division of MDA Lending Solutions, a subsidiary
of Vancouver-based MacDonald Dettwiler and Associates. MDA 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 was $1,641 last month, down from $1,709 the previous month, and up from
$1,739 a year ago. Adjusted for inflation, last month’s payment was 38.5 percent
below the typical payment in the spring of 1989, the peak of the prior real
estate cycle. It was 54.5 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 below peak levels
reached over the last two years. Financing with multiple mortgages is low, down
payment sizes are stable, and non-owner occupied buying remains above average,
MDA DataQuick reported.
(chart)
All
Homes
#Sold #Sold Pct.
$Median Median Pct.
July-09 July-10 Chng July-09
July-10 Chng
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Source: MDA DataQuick,
DQNews.com
-30-
Media calls: Andrew LePage
(916)456-7157