La Jolla, CA.----The number of homes sold in the Bay Area increased slightly last month as prices continued to edge down. Market trends indicate that significant move-up, move-down and sideways activity is still on hold, awaiting a stronger economy and a normalization of mortgage availability, a real estate information service reported. A total of 6,749 new and resale houses and condos sold in the nine-county Bay Area in September. That was down 10.2 percent from 7,513 in August, and up 6.6 percent from 6,334 in September 2010, according to San Diego-based DataQuick. Sales normally drop from August to September. Since 1988, when DataQuick’s statistics begin, September sales have varied from 5,014 in 2007 to 13,343 in 2003. Last month’s sales fell 21.9 percent below the average number of homes sold in September – 8,644 – since 1988. “As interesting as today’s market is, what’s more interesting is what’s not happening. While there has been a lot of talk about ‘shadow supply,’ especially distressed properties that haven’t been put on the market, demand continues to accumulate. Empty-nesters want something smaller, growing families want something bigger. People still die, they get married, retire – all of this generates demand. And only a fraction of that demand is being met in today’s market,” said John Walsh, DataQuick president. The median price paid for all new and resale houses and condos sold in the Bay Area last month was $365,000. That was down 1.4 percent from $370,000 in August, and down 7.6 percent from $395,000 in September 2010. 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. Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 25.6 percent of resales in September. Last month’s figure was down slightly from a revised 25.7 percent in August, and down from 27.5 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 9 percent. Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 20.1 percent of Bay Area resales last month. That was up from an estimated 18.2 percent in August, 15.4 percent a year earlier, and 15.3 percent two years ago. Last month 33.5 percent of Bay Area sales were for $500,000 or more, down from 35.5 percent in August, and down from 38.0 percent in September 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 47.4 percent of homes sold for $500,000-plus. Government-insured FHA home purchase loans, a popular choice among first-time buyers, accounted for 21.8 percent of all Bay Area home purchase mortgages in September, up from 21.2 percent in August but down from 24.1 percent a year earlier. One indicator of mortgage availability that had seen improvement this year dropped in September. Last month 13.1 percent of the Bay Area’s home purchase loans were adjustable-rate mortgages (ARMs), down from 16.0 percent in August but still up from 9.2 percent a year earlier. The monthly ARM rate, which hit a low of 3.0 percent in January 2009, has averaged 44.9 percent over the past 10 years. Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 32.5 percent of last month’s purchase lending, down from 32.9 percent in August and down from 33.6 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 a near-record 19.4 percent of all Bay Area homes sold, up from 19.0 percent in August and 18.6 percent a year ago. The peak was 19.9 percent in January this year, while the monthly average since 2000 is 16.4 percent. Absentee buyers paid a median $240,000 in September, down from $250,000 in August and $268,000 a year ago. Buyers who appear to have paid all cash – meaning no corresponding purchase loan was found in the public record – accounted for 27.5 percent of all sales in September, up from 27.4 percent in August, and up from 25.0 percent a year ago. The record was 30.6 percent last February, while the monthly average going back to 1988 is 11.7 percent. Cash buyers paid a median $250,000 in September, the same as in August but down from $270,000 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 and San Mateo counties. The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $1,413, down from $1,460 in August, and down from $1,573 a year ago. Adjusted for inflation, last month’s payment was 48.9 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 62.2 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 past few years. Financing with multiple mortgages is low, down payment sizes are stable, DataQuick reported. (chart) All Homes #Sold #Sold Pct. $Median Median Pct. Sep-10 Sep-11 Chng Sep-10 Sep-11 Chng Alameda 1,226 1,348 10.0% $371,000 $348,000 -6.2% Contra Costa 1,323 1,394 5.4% $289,500 $252,000 -13.0% Marin 216 239 10.6% $702,500 $628,409 -10.5% Napa 118 124 5.1% $337,000 $315,000 -6.5% Santa Clara 1,477 1,560 5.6% $500,000 $470,000 -6.0% San Francisco 442 399 -9.7% $620,000 $613,750 -1.0% San Mateo 517 607 17.4% $571,500 $551,000 -3.6% Solano 543 606 11.6% $205,000 $195,000 -4.9% Sonoma 472 472 0.0% $332,000 $307,000 -7.5% Bay Area 6,334 6,749 6.6% $395,000 $365,000 -7.6% Source: DataQuick, DQNews.com
