An estimated 34,239 new and resale houses and condos were sold statewide last month. That was down 2.7 percent from 35,202 in July, and down 14.0 percent from 39,811 for August 2009. California sales for the month of July have varied from a low of 29,764 in 1992 to a peak of 73,285 in 2005, while the average is 48,805. MDA DataQuick's statistics go back to 1988.
The median price paid for a home last month was $260,000, down 3.0 percent from $268,000 in July, and up 4.4 percent from $249,000 in August a year ago. The year-over-year increase was the tenth in a row, following 27 months of year-over-year decline. The bottom of the current cycle was $221,000 in April 2009, while the peak was at $484,000 in early 2007.
Of the existing homes sold last month, 35.9 percent were properties that had been foreclosed on during the past year. That was up from a revised 35.2 percent in July and down from 42.8 percent in August a year ago. The all-time high was in February 2009 at 58.5 percent.
The typical mortgage payment that home buyers committed themselves to paying last month was $1,077. That was down from $1,094 in July, and down from $1,093 in August 2009. Adjusted for inflation, last month's mortgage payment was 50.1 percent below the spring 1989 peak of the prior real estate cycle. It was 59.5 percent below the current cycle's peak in June 2006.
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.
Indicators of market distress continue to move in different directions. Foreclosure is off its recent peaks but remains high by historical standards. Financing with multiple mortgages is low, down payment sizes are stable, and cash and non-owner-occupied buying is up...----Bay Area home sales fell less sharply last month than in July but still dropped to an 18-year low as potential buyers fretted about job security or took their time to assess the changing market. The median sale price remained higher than a year earlier but dipped month-to-month again, a real estate information service reported.
A total of 6,698 new and resale houses and condos closed escrow in the nine-county Bay Area last month, down 1.1 percent from 6,773 in July and down 10.9 percent from 7,518 in August 2009, according to MDA DataQuick of San Diego.
In August, sales pulled out of the steep descent seen in July, when the market lost most of the boost that had been provided by federal home buyer tax credits. July sales fell 19.1 percent from June and fell 22.8 percent from a year earlier. The now-expired credits spurred many buyers to purchase homes sooner than they otherwise would have, creating a market lull in their wake.
Last month’s sales were the lowest for any August since 1992, when 6,688 homes sold, and were 31.3 percent lower than the average August sales of 9,743 since 1988, when DataQuick’s statistics begin. August sales have ranged from a low of 6,688 in 1992 to a high of 13,940 in 2004.
“Often we’re asked if a report like this is ‘bad news.’ The answer is that it depends on your perspective. Some will find the August sales level disheartening, though at least the declines weren’t as steep as in July. But spectacularly low mortgage rates and today’s lower prices present new opportunities for home shoppers who got discouraged in the past,” said John Walsh, MDA DataQuick president.
“The magnitude of the sales slowdown suggests that, among other things, many would-be buyers are holding off for further price cuts, which would be most likely where an inventory spike meets slackening demand. The trick is to keep one eye on mortgage rates. If they jump, it could erase the benefit of a modest price drop.”
Last month the median paid for all new and resale houses and condos combined in the Bay Area was $385,000, down 4.2 percent from $402,000 in July but up 6.9 percent from $360,000 in August 2009.
Last month was the second in a row to post a month-to-month decline in the median, which so far this year has peaked at $410,000 in May and June. On a year-over-year basis, the Bay Area median has risen for 11 straight months, though before July those increases had been in the double digits – ranging from 10.6 percent to 31.0 percent – since last November.
August’s median stood 42.1 percent below the $665,000 peak in June/July 2007. The post-housing-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 – inched up to 26.7 percent of the Bay Area’s resale market. That was up from 25.3 percent in July but down from 34.3 percent in August 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 24.2 percent of all home purchase loans in August, up from 23.3 percent in July but down slightly from 24.8 percent in August 2009.
Last month 37.0 percent of all sales were for $500,000 or more, down from 40.6 percent in July but up from 35.9 percent a year ago. The low point for $500,000-plus sales was January 2009, when 22.7 percent of sales crossed that threshold. Over the past decade, a monthly average of 45.2 percent of homes sold for $500,000 or more.
Viewed differently, sales of existing single-family houses in zip codes representing the top one-third of the market, based on historical prices, accounted for 34.5 percent of all sales in August, down from 35.8 percent in July but up from 29.9 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 July 2007. The 10-year average contribution is 33.3 percent.
High-end sales continue to be hampered by the credit crunch that struck three years ago, making adjustable-rate mortgages (ARMs) and “jumbo” loans more difficult to obtain.
In August, 9.3 percent of all home purchase loans were ARMs, down from 10.4 percent in July but up from 6.6 percent a year ago. The Bay Area’s average monthly ARM rate over the last decade is nearly 50 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 33.6 percent of last month’s purchase lending, down from 36.4 percent in July but up from 28.8 percent in August 2009 and a post-housing-boom low of 17.1 percent in January 2009. 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 17.8 percent of all Bay Area homes sold, paying a median $240,000, which was down from $265,000 in July but up from $237,000 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 25.7 percent of sales in August, paying a median $250,000, which was down from $268,500 in July but up from $233,000 a year ago.
Home flipping had been trending higher over the past year but eased last month. In August, 2.2 percent of the homes that sold on the open market had been bought and re-sold within a six-month period. That was down from a Bay Area flipping rate of 2.6 percent in July but up from 1.6 percent a year earlier. Last month’s flipping rates varied from 1.3 percent in San Francisco to 3.5 percent in Solano 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 $1,548, down from $1,641 the previous month, and down from $1,580 a year ago. Adjusted for inflation, last month’s payment was 41.8 percent below the typical payment in the spring of 1989, the peak of the prior real estate cycle. It was 57.0 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.
