Thursday, March 19, 2009

Bay Area Median Home Price Falls Below $300,000

DataQuick News reports Bay Area home sales climb above last year as median falls below $300K

La Jolla, CA.----Bay Area home sales beat the year-ago mark for the sixth straight month in February as the winter market sizzled in many foreclosure-heavy inland areas offering the deepest discounts. The median price dipped below $300,000 for the first time since late 1999, pushed lower by an abundance of inland distressed sales and a dearth of coastal high-end activity, a real estate information service reported.

A total of 5,032 new and resale houses and condos closed escrow in the nine-county Bay Area last month. That was essentially unchanged from 5,050 in January but up 26.1 percent from 3,989 in February 2008, according to MDA DataQuick of San Diego.

Last month’s sales were the fifth-lowest for a February since 1988, when DataQuick’s statistics begin, and 22 percent below the average 6,410 for the month. February sales have ranged from a low of 3,989 in 2008 to a high of 8,901 in 2002.

Only 321 newly constructed homes sold last month, down 55 percent from 713 a year ago, the lowest on record for a February, and the second-lowest for any month back to 1988. Many builders have had a difficult time competing with falling resale prices – especially foreclosures.

The allure of such discounted foreclosures helped lift sales of existing single-family houses to record levels for a February in Vallejo, Brentwood, Antioch, Pittsburg and Oakley.

The use of government-insured, FHA loans – a common choice among first-time buyers – represented a record 24.9 percent of all Bay Area purchase loans last month.

Conversely, use of so-called jumbo loans to finance high-end property remained at abnormally low levels. Before the credit crunch hit in August 2007, jumbo loans, then defined as over $417,000, represented 62 percent of Bay Area purchase loans, compared with just 17.5 percent last month.

The difficulties potential high-end buyers have had in obtaining jumbo loans helps explain why sales of existing single-family houses fell to record-low or near-record-low levels for a February in some higher-end communities. They included Orinda, Walnut Creek, San Rafael, San Francisco, Burlingame, San Mateo, Los Gatos, and Los Altos.

“A lot of Bay Area activity is basically on hold, waiting for the jumbo mortgage spigot to reopen. That could start to happen during the second quarter, although slowly. Yesterday’s move by the Federal Reserve to buy more mortgage securities could be a turning point,” said John Walsh, MDA DataQuick president.

Across the nine-county region, the median price paid for all new and resale houses and condos combined fell to $295,000 last month. That was down 1.7 percent from $300,000 in January and down a record 46.2 percent from $548,000 a year ago.

The February median stood at its lowest since it was $299,000 in December 1999 and was 55.6 percent below the peak median of $665,000 reached in June and July of 2007.

The median price – the point where half of the homes sold for more and half for less – has fallen on a year-over-year basis for 15 consecutive months. Its near free-fall in recent months overstates the decline in the value of the typical Bay Area home. The median’s plunge also reflects the sluggishness of high-end sales, which are now under-represented in the statistics; a shift toward more sales occurring in the less-expensive inland markets; and buyers’ preference for discounted foreclosures.

Last month 52 percent of all homes that resold in the Bay Area had been foreclosed on at some point in the prior 12 months, up from a revised 51.9 percent in January and 22.3 percent a year ago.

At the county level, foreclosure resales last month ranged from 12.1 percent of resales in San Francisco to 69.5 percent in Solano County. In the other seven counties, foreclosure resales were as follows: Alameda, 46.2 percent; Contra Costa, 65.1 percent; Marin, 18.9 percent; Napa, 63.1 percent; Santa Clara, 42.9 percent; San Mateo, 31.3 percent; and Sonoma, 57.1 percent.

DQ Custom Reports Bay Area Release Chart