Bay Area Housing Market Trending toward Normal
Jann Swanson | Mortgage News Daily | Nov 13 2013 | link
“Ho-hum” is the word DataQuick used to describe the housing market in California’s Bay Area last month. A total of 7,595 new and resale houses and condos sold in October in the nine county area around San Francisco, an increase of 6.4 percent from 7,141 the month before and 3.9 percent lower than the 7,902 sold in October 2012.
Sales in October have averaged 8,553 in the years since 1988 when DataQuick started keeping records. Last month was, therefore 11.2 percent below average. The October range is from a low of 5,486 sales in 2007 and a high of 13,392 in October 2003. Bay area sales have not exceeded the average in any month in more than seven years.
The median price paid for a home in the area in October was $539,750, up 1.8 percent from $530,000 in September, and up 29.7 percent from $416,000 in October 2012. DataQuick estimated that about three-quarters of the 29.7 percent annual increase represented an increase in home values while the remainder was a factor of market mix – more mid- to high-end sales and fewer low-cost inland distressed sales.
The peak price in the area so far this year was $562,000 in July. This was also the highest median price since December 2007. Prices peaked in June and July 2007 at $665,000 and by March 2009 the median had fallen to $290,000.
“At different times in recent years we’ve had various peaks or troughs when it comes to sales volume, prices, foreclosure activity, cash sales, absentee-owner sales, various home loan options, you name it. All of these market components are now trending toward normal. We are still a ways away, but the market is slowly re-establishing equilibrium,” said John Walsh, DataQuick president.
“A lot of market drag can be attributed to skittish market participants, especially buyers and lenders. Comfort levels do rise with more stability and predictability – factors that could contribute to increased activity well into next year and beyond,” he said.
The number of homes sold for less than $500,000 dropped 26.4 percent year-over-year, while the number sold for more increased 15.9 percent, DataQuick reported.