DataQuick News reports Bargain hunting dominates Bay Area home sales in December
La Jolla, CA.----Bargain hunting dominated the Bay Area housing market last month as the purchase of foreclosure properties accounted for more than half of all resales for the first time. Sales patterns also reflected continued problems for buyers looking to finance purchases in the upper half of the market's price range, a real estate information service reported.
A total of 6,889 new and resale houses and condos were sold in the nine- county region last month. That was up 19.7 percent from 5,756 in November, and up 36.0 percent from 5,065 for December 2007, according to MDA DataQuick.
While sales were well below the 8,807 average for all Decembers going back to 1988, they were no longer at the record low levels of late 2007 and the first half of 2008.
The median price paid for a Bay Area home was $330,000 in December. That was down 5.7 percent from $350,000 for the month before, and down 43.8 percent from $587,500 for December 2007. That was the lowest it has been since March 2000 when the median was $320,500, and 50.4% below the $665,000 peak of June/July 2007.
"It would be wrong to say that Bay Area home values are half of what they were a year-and-a-half ago. We're figuring that maybe half of the decline in median is a market mix issue, and the rest a drop in value. But we're in the middle of this, and we won't be able to quantify it until it's behind us. What is remarkable, is that so much Bay Area activity is still on hold, waiting the turbulence out. We don't know how long that can last," said John Walsh, MDA DataQuick president.
Home loans for more than $417,000, the old "jumbo" limit, used to account for more than 60 percent of the Bay Area's purchase financing. Last month it was 21.8 percent.
The most active lenders to Bay Area home buyers were Countrywide, Bank of America and Wells Fargo. MDA DataQuick will report more extensively on the home financing market next month.
Homes that were foreclosed on accounted for 50.0 percent of December's resale activity, up from 46.8 percent in November, and up from 14.0 percent for December a year ago. Foreclosure resales ranged from 12.4 percent in San Francisco last month to 67.7 percent in Solano County.
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.
The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,471 last month, down from a revised $1,695 for the previous month, and down from a revised $2,848 for December year ago. Adjusted for inflation, current payments were 43.9 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 58.5 percent below the current cycle's peak in July 2007.
Indicators of market distress continue to move in different directions. Foreclosure activity waned in early fall but is edging higher again and remains near record levels, while financing with adjustable-rate mortgages is at an all-time low, as is financing with multiple mortgages. Down payment sizes and flipping rates are stable, non-owner occupied buying activity appears flat, MDA DataQuick reported.
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