Bay Area home sales near bottom again, median price plunges

September 18, 2008

La Jolla, CA.----The pace of Bay Area home sales reversed its July uptick and dropped again last month, marking a return to the long-running waiting game that many potential buyers and sellers have been playing for more than a year. Parts of the East Bay are bucking the trend with active bottom-feeding in foreclosure-stressed neighborhoods, a real estate information service reported.

A total of 7,232 new and resale houses and condos were sold in the nine-county Bay Area in August. That was down 4.7 percent from 7,586 in July, and down 0.9 percent from 7,299 in August 2007, according to San Diego-based MDA DataQuick.

Last month's sales total was the second-lowest for an August, behind 6,688 sales in August 1992, in MDA DataQuick's statistics, which go back to 1988. An "average" August had 10,031 sales, while the peak August in 2004 had 13,940.

"Mortgage money for homes above the half-million-dollar mark is hard to come by right now, even for well-qualified buyers. Because homes are more expensive in the Bay Area than elsewhere, this issue will have a bigger impact on home sales there. Mortgage availability will eventually loosen up, we just don't know when, especially after the past few days," said John Walsh, MDA DataQuick president.

The use of so-called jumbo mortgages, until recently defined as over $417,000, has plummeted since the credit crunch hit in August 2007, making jumbo loans more expensive and harder to obtain. Last month mortgages over $417,000 made up 32.3 percent of all home purchase loans, down from 58.6 percent in August 2007.

August home sales jumped in Contra Costa and Solano counties as bargain hunters scooped up distressed properties at prices not seen in more than five years. Across the Bay Area, foreclosure resales made up 36.1 percent of all resales last month, up from 33.3 percent in July and 4.4 percent a year ago. The figure represents the percentage of homes resold in August that had been foreclosed on at some point in the prior 12 months.

At the county level, foreclosure resales ranged from 8.6 percent of resales in San Francisco to 61.3 percent in Solano County. In the Bay Area's other seven counties, August foreclosure resales were as follows: Alameda, 32.5 percent; Contra Costa, 54.4 percent; Marin, 13.5 percent; Napa, 39 percent; Santa Clara, 24.7 percent; San Mateo, 16.6 percent; Sonoma, 41.6 percent.

The median price paid for all new and resale houses and condos sold in the Bay Area last month was $447,000, down 4.9 percent from $470,000 in July and down a record 31.8 percent from $655,000 in August 2007, according to MDA DataQuick.

Last month's median stood at the lowest point since January 2004, when it was $440,000. The median peaked at $665,000 in June, July and August of 2007.

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.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $2,121 last month, down from $2,218 the previous month, and down from $3,171 a year ago. Adjusted for inflation, current payments are 18.5 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 38.7 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 near the all-time low, as is financing with multiple mortgages.

Down payment sizes and flipping rates are stable, non-owner occupied buying activity appears flat but might be emerging, MDA DataQuick reported.

  Sales Volume Median Price
All homes Aug-07 Aug-08 %Chng Aug-07 Aug-08 %Chng
Alameda 1,501 1,271 -15.30% $619,000 $440,000 -28.90%
Contra Costa 1,279 1,733 35.50% $570,000 $330,000 -42.10%
Marin 264 247 -6.40% $899,500 $675,000 -25.00%
Napa 103 124 20.40% $597,500 $453,500 -24.10%
Santa Clara 1,908 1,648 -13.60% $700,000 $555,500 -20.60%
San Francisco 577 529 -8.30% $822,000 $725,000 -11.80%
San Mateo 731 560 -23.40% $788,000 $632,000 -19.80%
Solano 418 598 43.10% $420,000 $270,000 -35.70%
Sonoma 518 522 0.80% $505,000 $350,000 -30.70%
Bay Area 7,299 7,232 -0.90% $655,000 $447,000 -31.80%

Source: DataQuick Information Systems, Media calls: Andrew LePage (916) 456-7157 or John Karevoll (909) 867-9534

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