Bay Area Posts Highest July Home Sales in Eight Years
August 15, 2013
La Jolla, CA.--The number of homes sold in the Bay Area jumped last month to the
highest level for a July since 2005 and the highest level for any month in
almost seven years. Amid favorable market conditions, the burst of activity
reflects pent-up demand meeting an increasing supply of homes for sale, a real
estate information service reported.
A total of 9,339 new and resale houses and condos sold in the
nine-county Bay Area in July. That was up 18.3 percent from 7,897 the month
before, and up 13.3 percent from 8,241 in July 2012, according to San
Diego-based DataQuick. It was the highest July sales since 12,538 homes sold in
July 2005, and the highest for any month since August 2006, when 9,713 homes
Last month’s 9,339 sales almost reached the average of 9,366 sales for
all months of July since 1988, when DataQuick’s statistics begin. July sales
have ranged from 6,666 in 1995 to 14,258 in 2004.
“There’s all this talk of a frenzy, but the fact is that we’re still
looking at a Bay Area housing market that is in the process of re-balancing
itself, regaining lost ground. As prices continue to rise, more homes will be
put up for sale, easing the upward price pressure,” said John Walsh, DataQuick
The median price paid for a home in the Bay Area last month was
$562,000, the highest since it was $587,500 in December 2007. Last month’s
median was up 1.3 percent from $555,000 in June, and up 33.5 percent from
$421,000 in July 2012.
The Bay Area median peaked at $665,000 in June and July 2007, then
dropped as low as $290,000 in March 2009. Much of the median's ups and downs can
be attributed to shifts in the types of homes sold. When adjusting for these
shifts, it appears that about three fourths of July’s 33.5 percent
year-over-year rise in the median was an actual increase in home values, while
the rest was market mix.
In a sign of market confidence, Bay Area home buyers continued to put
near-record amounts of their own money into residential real estate. In July
they paid a total of $2.3 billion out of their own pockets in the form of down
payments or cash purchases. That was about the same as the month before and was
up from $1.9 billion a year ago. It was down from this May's all-time high of
Sales continued to rise sharply from a year earlier in mid- to
high-priced areas, while they tended to fall in the most affordable markets. The
number of homes sold in July for less than $500,000 dropped 14.6 percent
year-over-year, while the number sold for more increased 55.9 percent, DataQuick
Last month distressed property sales – the combination of foreclosure
resales and “short sales” – made up about 14.8 percent of the resale market.
That was down from about 17.0 percent in June and down from about 38.9 percent a
Foreclosure resales – homes that had been foreclosed on in the prior 12
months – accounted for 4.8 percent of resales in July, down from a revised 6.0
percent in June, and down from 15.1 percent a year ago. Last month was the
lowest since 4.4 percent in August 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 10.0 percent of Bay Area resales
last month. That was down from an estimated 11.3 percent in June and down from
23.7 percent a year earlier.
Jumbo loans, mortgages above the old conforming limit of $417,000,
accounted for 51.0 percent of last month’s purchase lending, roughly even with a
revised 50.9 percent in June, and up from 38.6 percent a year ago. Jumbo usage
dropped to as low as 17.1 percent in January 2009.
Adjustable-rate mortgages (ARMs), an important indicator of mortgage
availability, accounted for 19.2 percent of the Bay Area’s home purchase loans
in July. That was the highest since 20.8 percent in August 2008. It was up from
a revised 16.9 percent in June, and up from 13.5 percent in July last year.
Since 2000, ARMs have accounted for 47.7 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 10.6 percent of all Bay Area purchase mortgages
in July, about even with a revised 10.4 percent in June and down from 16.0
percent a year earlier. In recent months the FHA level has been the lowest since
spring 2008, reflecting both tougher qualifying standards and the difficulties
first-time buyers have competing with investors and other cash buyers.
Absentee buyers – mostly investors – purchased 20.9 percent of all Bay
Area homes that sold last month. That was down from a revised 21.6 percent in
June, and down from 22.6 percent a year ago. The absentee share has trended
downward since hitting an all-time peak of 28.7 percent in February this year.
The monthly average since 2000, when the absentee series begins, is 15.2
percent. Absentee buyers paid a median $412,000 in July, up 55.5 percent from a
Buyers who appear to have paid all cash – meaning no sign of a
corresponding purchase loan was found in the public record – accounted for 24.0
percent of sales in July. That was down from a revised 25.0 percent the month
before and down from 27.6 percent a year earlier. The cash buyer share of sales
has declined each month this year since hitting its peak of 32.3 percent in
February. The monthly average going back to 1988 is 13.2 percent. Cash buyers
paid a median $441,500 in July, up 54.4 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, San Francisco and San Mateo
The typical monthly mortgage payment that Bay Area buyers committed
themselves to paying last month was $2,243. Adjusted for inflation, last month’s
payment was 21.2 percent below the typical payment in spring 1989, the peak of
the prior real estate cycle. It was 44.5 percent below the current cycle's peak
in July 2007. It was 78.4 percent above the February 2012 bottom of the current
Indicators of market distress continue to decline. Foreclosure activity
remains high by historical standards but well below peak levels reached three
years ago. Financing with multiple mortgages is low, down payment sizes are
stable, DataQuick reported.
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Source: DataQuick, www.DQNews.com
Media calls: Andrew LePage (916)
Copyright 2013 DataQuick. All rights reserved.