December 14, 2011La Jolla, CA.----Bay Area home sales were ahead of 2010 for the fifth month in a row in November, despite limited mortgage availability and sluggish high-end sales. The median sale price fell again on a year-over-year basis, partly because of the slowdown in sales above the mid point for prices, a real estate information service reported.
A total of 6,317 new and resale houses and condos sold in the nine-county Bay Area last month. That was down 2.0 percent from 6,444 in October, and up 3.4 percent from 6,111 in November 2010, according to San Diego-based DataQuick.
The October-to-November sales decline was smaller than normal. On average, Bay Area sales between those two months have fallen 7.7 percent. November sales have varied from 5,127 in 2007 to 11,906 in 2004. The average since 1988, when DataQuick’s statistics begin, is 7,897.
“These days, buyers and sellers have to contend with two sets of problems, which sometimes play into each other and sometimes conflict with each other. The first is the lousy economy and the opportunities it presents, for better or worse. The second is the dysfunctional mortgage finance system. Interest rates may be at record lows, but the types of mortgages that are available have been drastically reduced and qualifying is a true grind,” said John Walsh, DataQuick president.
“This creates uncertainty. Many potential buyers and sellers appear to be in a frame of mind that says, ‘when in doubt, don’t,’” he said.
The median price paid for all new and resale houses and condos sold in the Bay Area last month was $363,500. That was up 3.9 percent from $350,000 in October, and down 4.3 percent from $380,000 in November 2010. The median has declined on a year-over-year basis for the last 14 months.
The low point of the current real estate cycle was $290,000 in March 2009. The peak was $665,000 in June/July 2007. Around half of the median’s peak-to-trough drop was the result of a decline in home values, while the other half reflected a shift in the sales mix.
Last month distressed property sales – the combination of foreclosure resales and “short sales” – made up 47.8 percent of the resale market. That was up from 45.2 percent in October and 46.7 percent a year ago.
Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 26.5 percent of resales in November. That was up from 25.3 percent in October, and down from 28.6 percent a year ago. Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average for foreclosure resales over the past 15 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 21.3 percent of Bay Area resales last month. That was up from 19.9 percent in October and 18.1 percent a year earlier. Two years ago the estimate was 16.5 percent.
Last month 31.0 percent of Bay Area sales were for $500,000 or more, down from a revised 31.3 percent in October, and down from 37.2 percent in November 2010. The low for the current cycle was January 2009, when just 22.7 percent of sales crossed the $500,000 threshold. Over the past 10 years, a monthly average of 47.8 percent of homes sold for $500,000-plus.
Government-insured FHA home purchase loans, a popular choice among first-time buyers, accounted for 22.3 percent of all Bay Area home purchase mortgages in November. That was up from 21.2 in October and down from 23.9 percent a year earlier.
One indicator of mortgage availability that had seen improvement earlier this year dropped again in November, when 11.6 percent of the Bay Area’s home purchase loans were adjustable-rate mortgages, down from a revised 12.9 percent in October, and up from 9.9 percent in November last year. Over the last decade, ARMs have accounted for 51.0 percent of all purchase loans. ARMs hit a low of 3.0 percent of purchase loans in January 2009.
Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 29.7 percent of last month’s purchase lending, up from a revised 27.9 percent in October, and down from 33.4 percent a year ago. Jumbo usage dropped to 17.1 percent in January 2009. Before the credit crunch struck in August 2007, jumbos accounted for nearly 60 percent of the Bay Area purchase loan market.
Last month absentee buyers – mostly investors – purchased 22.6 percent of all Bay Area homes sold, up from 22.3 percent in October and 19.1 percent a year ago. The peak was 23.4 percent in February this year, while the monthly average since 2000 is 13.9 percent. Absentee buyers paid a median $240,000 in November, down from $243,500 in October and the same as a year earlier.
Buyers who appear to have paid all cash – meaning no corresponding purchase loan was found in the public record – accounted for 27.9 percent of sales in November, down from 28.5 percent in October but up from 25.2 percent a year ago. The record was 30.5 percent last February, while the monthly average going back to 1988 is 12.1 percent. Cash buyers paid a median $240,000 in November, down from $248,000 in October and down from $250,000 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 counties.
The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $1,387, up from $1,348 in October, and down from $1,504 a year ago. Adjusted for inflation, last month’s payment was 49.8 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 62.9 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 three years. Financing with multiple mortgages is low, down payment sizes are stable, DataQuick reported.
See county chart at DQNews.com.
Source: DataQuick, www.DQNews.com