Thursday, December 13, 2012

November Bay Area Home Sale Press Release

Further Gains for Bay Area Home Sales and Prices


December 13, 2012

La Jolla, CA.--The Bay Area housing market continued its march toward normalcy in November, with strong sales and rising sale prices fueled by increased demand, strained inventory, record-low mortgage rates and robust investor interest, a real estate information service reported.

A total of 7,296 new and resale homes were sold in the nine-county Bay Area last month. That was down 6.4 percent from 7,795 in October, and up 15.5 percent from 6,317 for November 2011, according to San Diego-based DataQuick.

A drop from October to November is normal for the season. Last month’s sales count was the highest for any November since 8,042 homes were sold in 2006. November sales have varied from 5,127 in 2007 to 11,906 in 2004. The average for all months of November since 1988, when DataQuick’s statistics start, is 7,873.

“Current trends are likely to stay with us well into spring, at least. One of the variables that could really impact the market would be supply – how many homes are put up for sale. There are still mortgage finance issues. Some loan categories are not active. But right now, low mortgage interest rates make up for that. With the mismatch between supply and demand, there’s upward pressure on prices,” said John Walsh, DataQuick president.

The median price paid for a home in the Bay Area was $438,000 last month. That was up 5.3 percent from $416,000 in October and up 20.5 percent from $363,500 in November a year ago. Last month’s median was the highest since August 2008, when it was $447,000.

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, as well as about half the median’s year-over-year increase this November, was the result of a shift in the sales mix. For example, today far fewer lower-cost foreclosures are re-selling compared with a year ago, and there are a lot more homes selling in the more expensive move-up markets.

The number of Bay Area homes sold in November for less than $500,000 decreased 12.7 percent year-over-year while the number sold for more increased 36.0 percent, DataQuick reported.

Last month distressed property sales – the combination of foreclosure resales and “short sales” – made up 35.0 percent of the resale market. That was down from 35.2 percent in October and down from 50.1 percent a year earlier.

Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 11.5 percent of resales in November, down from a revised 11.7 percent in October, and down from 25.2 percent a year ago. Last month was the lowest since 10.1 percent in November 2007. Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average for foreclosure resales over the past 17 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 23.0 percent of Bay Area resales last month. That was down from an estimated 23.5 percent in October and down from 24.9 percent a year earlier. While short sales’ share of the overall market does not appear to have changed much, the number of short sales in November was about 6 percent higher than a year ago.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 40.1 percent of last month’s purchase lending, up from a revised 39.5 percent in October, and up from 29.0 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.

Adjustable-rate mortgages (ARMs), an important indicator of mortgage availability, accounted for 11.5 percent of the Bay Area’s home purchase loans. That was the same as a revised 11.5 percent in October, and down from 12.4 percent in November last year. Since 2000, ARMs have accounted for 49.0 percent of all purchase loans. ARMs hit a low of 3.0 percent of loans in January 2009.

Government-insured FHA home purchase loans, a popular choice among first-time buyers, accounted for 17.0 percent of all Bay Area home purchase mortgages in November, up from 15.8 percent in October and down from 21.0 percent a year earlier.

The most active lenders to Bay Area home buyers last month were Wells Fargo with 14.8 percent of the market, RPM Mortgage with 3.7 percent and Stearns Lending with 3.4 percent.

Last month absentee buyers – mostly investors – purchased 24.4 percent of all Bay Area homes, up from 23.7 percent in October, and up from 21.7 percent a year ago. The monthly average back to 2000 is 14.7 percent. Absentee buyers paid a median $309,000 in November, up 22.1 percent from $253,000 a year earlier.

Buyers who appear to have paid all cash – meaning there was no evidence of a corresponding purchase loan in the public record – accounted for 28.7 percent of sales in November. That was down from 29.6 percent in October, and was the same as a year ago. The monthly average going back to 1988 is 12.7 percent. Cash buyers paid a median $320,000 in November, up 27.0 percent from $252,000 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 Mateo and San Francisco counties.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $1,544. That was up from $1,472 in October, and up from $1,387 a year ago. Adjusted for inflation, last month’s payment was 45.3 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 59.6 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 well below peak levels reached over the last three years. Financing with multiple mortgages is low, down payment sizes are stable, DataQuick reported.

To view the county-by-county chart, go to DQNews.com.

Source: DataQuick, www.DQNews.com

Media calls: Andrew LePage (916) 456-7157
Copyright 2012 DataQuick. All rights reserved.

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