Bay Area November Home Sales, Median Price Down from a Year Ago

December 16, 2010

La Jolla, CA.----November home sales in the Bay Area were flat compared with the month before and remained well below year-ago levels. The overall median sale price dipped slightly below the prior month and a year earlier, in part because of lackluster sales in higher-cost areas, a real estate information service reported.

A total of 6,111 new and resale houses and condos were sold in the nine-county Bay Area last month. That was down 0.2 percent from 6,122 in October and down 11.2 percent from 6,878 in November 2009, according to MDA DataQuick of San Diego.

A sales drop from October to November is normal for the season. On average, sales have declined 8.0 percent between those two months since 1988, when DataQuick’s statistics begin. Last month’s sales count was 23.3 percent below the November average of 7,966 sales. October sales were 29.8 percent below average, while they were 27.4 percent below average in September and 31.5 below in August.

“Clearly, Bay Area buyers and sellers who can wait this market out, are doing just that. And if you’re buying or selling in the upper half of the market, it’s self-evident that you’re more able to put your move on hold,” said John Walsh, MDA DataQuick president.

“The thing is, demand is accumulating. And at some point the market will kick back into gear. It’s possible that prices have bottomed out, and it seems likely that today’s interest rates won’t be around a year from now. There will be catch-up activity, but the big question is timing. We’ll have to see what happens with employment, the economy, and with today’s tight credit,” he said.

The median price paid for all new and resale houses and condos in the Bay Area was $380,000 in November, down 0.8 percent from $383,000 in October and down 1.8 percent from $387,000 in November 2009. The peak of the current cycle, $665,000, was reached in June/July 2007, while the median hit a low of $290,000 in March 2009. Around half of the peak-to-trough drop was the result of a decline in home values, while the other half was a shift in sales mix to lower-cost homes.

Last month 33.7 percent of all sales were for $500,000 or more, down from 37.2 percent in October and the lowest since 32.8 percent last February. The all-time low was January 2009, when 22.7 percent of sales crossed that threshold. Over the past decade, a monthly average of 46.8 percent of homes sold for $500,000 or more.

Viewed differently, sales in zip codes representing the top one-third of the market, based on historical prices, accounted for 34.8 percent of all transactions in November. That was down from 36.4 percent in October and 35.5 percent a year ago. Those higher-end areas’ contribution to regional sales had dropped as low as 21.4 percent in January 2009, while the peak was 46.7 percent in June 2007. The 10-year average contribution is 35.5 percent.

Last month foreclosure resales – homes that had been foreclosed on in the prior 12 months – rose for the fourth consecutive month to 29.2 percent of the Bay Area’s resale market. That was up from a revised 28.6 percent in October but down from 31.9 percent in November 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.

Government-insured FHA loans, a popular choice among first-time buyers, accounted for 24.5 percent of all home purchase mortgages in November, down from 25.1 percent in October and 24.8 percent in November 2009.

Sales of higher-cost homes continue to suffer from the credit crunch that struck three years ago, making adjustable-rate mortgages (ARMs) and “jumbo” loans much more difficult to obtain.

In November, 9.8 percent of the Bay Area’s home purchase loans were ARMs, up from 9.0 percent in October and up from 7.9 percent a year ago. The Bay Area’s average monthly ARM rate over the last decade is 53 percent. ARMs hit a low of 3.0 percent in January 2009.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 32.3 percent of last month’s purchase lending, down from 33.9 percent in October, and up from 30.4 percent in November 2009, and a post-housing-boom low of 17.1 percent in January 2009. However, before the August 2007 credit crunch, jumbos accounted for nearly 60 percent of the Bay Area purchase loan market.

Last month absentee buyers – mostly investors – purchased 19.3 percent of all Bay Area homes sold, compared with 19.1 percent in October and 15.7 percent a year ago. The monthly average since 2000 is 13.3 percent.

Buyers who appeared to have paid all cash – meaning there was no corresponding purchase loan found in the public record – accounted for 25.5 percent of sales in November, up from 24.2 percent in October, 22.6 percent a year ago and an average of 11.4 percent going back to 1988.

Home flipping has generally trended higher this year. In November, 2.9 percent of the homes that sold on the open market had been bought and re-sold within a six-month period. That was up from a Bay Area flipping rate of 2.5 percent in October but down from 2.6 percent a year earlier. Last month’s flipping rates varied from 0.9 percent in San Francisco to 4.6 percent in Sonoma 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 last month was $1,504, the same as the previous month, and down from $1,658 a year ago. Adjusted for inflation, last month’s payment was 43.5 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 58.3 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 is above average, MDA DataQuick reported.

Sales Volume Median Price
All homes Nov-09 Nov-10 %Chng Nov-09 Nov-10 %Chng
Alameda             1,323     1,271     -3.9%     $363,000     $363,500      0.1%
Contra Costa        1,472     1,238    -15.9%     $290,000     $260,000    -10.3%
Marin                 237       208    -12.2%     $600,000     $650,000      8.3%
Napa                  104       104      0.0%     $380,750     $300,500    -21.1%
Santa Clara         1,649     1,417    -14.1%     $494,500     $459,000     -7.2%
San Francisco         499       410    -17.8%     $650,000     $680,000      4.6%
San Mateo             525       497     -5.3%     $587,550     $600,000      2.1%
Solano                621       551    -11.3%     $220,000     $207,000     -5.9%
Sonoma                448       415     -7.4%     $325,050     $315,000     -3.1%
Bay Area            6,878     6,111    -11.2%     $387,000     $380,000     -1.8%

Source: MDA DataQuick Information Systems,

Media calls: Andrew LePage (916) 456-7157

Copyright 2010 DataQuick Information Systems. All rights reserved.
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