Bay Area median price dives below $500K; sales near record low
July 17, 2008
La Jolla, CA.----The median price paid for a Bay Area home plunged to
$485,000 in June, marking the first time in more than four years that it was
below the half-million mark, DataQuick Information Systems reported.
The price barometer fell an unprecedented 27 percent from its record
level a year ago as more sellers settled for less, lenders unloaded more
aggressively-priced foreclosures and more sales activity shifted to less-
expensive areas, mainly inland. Credit remained tightest for potential high-
end buyers on the coast, where sales were generally anemic and prices showed
signs of increased erosion, the real estate information service reported.
June's $485,000 median was 6.2 percent below May's $517,000 and 27.1
percent lower than the peak $665,000 median reached in June and July of
2007. Last month's median was the lowest since it was $469,500 in March
2004. The median first surpassed $500,000 in May 2004.
The median has fallen on a year-over-year basis for seven consecutive
months, the result of both widespread depreciation, most pronounced inland,
and a shift of sales towards lower-priced markets. The region's four most
expensive counties -- Marin, San Francisco, San Mateo and Santa Clara --
accounted for a combined 42 percent of Bay Area sales last month, down from
49 percent in June 2007.
A total of 7,178 new and resale houses and condos sold across the nine-
county Bay Area in June. That was up 15.5 percent from 6,216 in May but down
9.9 percent from 7,964 for June 2007.
Although last month's sales were the highest since last August, it was
still the second-lowest June in DataQuick's statistics, which go back to
1988. The last time June sales were lower was in 1993, when 7,118 homes
sold. Between last September and this March, each calendar month had been
the slowest on record for that particular month.
Sales fared better over the past few months as bargain hunters
descended on many inland markets where prices have fallen the most -- often
30 percent or more from their peaks. Some of the biggest discounts are in
areas with the highest level of foreclosure resales -- properties that had
been foreclosed on in the prior 12 months.
Last month foreclosure resales made up 28.7 percent of all Bay Area
resales, up from 27.6 percent in May and 3.5 percent a year ago. They ranged
from as little as 3 percent of resales in San Francisco to as much as 57.7
percent in Solano County.
"Once again the quest for a bargain kept Bay Area home sales out of
record-low territory," said John Walsh, DataQuick president. "So far it's
been mostly the inland areas where prices have dropped enough to rejuvenate
sales. Our latest stats might be signaling greater price reductions on the
coast, where sales have been severely restrained by several factors: higher
prices, tighter lending guidelines, inadequate liquidity for jumbo mortgages
and depreciation in inland areas that's left homeowners there with less
equity with which to purchase a home on the coast."
Before the credit crunch hit last August, jumbo mortgages (over
$417,000) made up nearly 65 percent of all Bay Area purchase loans. In June
they accounted for 28.8 percent, up from 28.4 percent in May.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and
Associates, monitors real estate activity nationwide and provides
information to consumers, educational institutions, public agencies, lending
institutions, title companies and industry analysts. Due to late data
availability, the June statistics for Alameda County were extrapolated from
the first three weeks of the month.
The typical monthly mortgage payment that Bay Area buyers committed
themselves to paying was $2,283 last month, down from $2,393 the previous
month, and down from $3,219 a year ago. Adjusted for inflation, current
payments are 12.2 percent below typical payments in the spring of 1989, the
peak of the prior real estate cycle. They are 33.9 percent below the current
cycle's peak in June 2006.
Indicators of market distress continue to move in different directions.
Foreclosure activity is at record levels, financing with adjustable-rate
mortgages is at a six-year low. Down payment sizes and flipping rates are
stable, non-owner occupied buying activity is flat, DataQuick reported.
Source: DataQuick Information Systems, www.DQNews.com Media calls: Andrew
LePage (916) 456-7157 or John Karevoll (909) 867-9534
Copyright 2008 DataQuick Information Systems. All rights reserved.