Thursday, April 16, 2009

DQ News: Bay Area Home Sales Rise

DataQuick reports Bay Area home sales continue climb, median still below $300K

La Jolla, CA.----The number of homes sold in the Bay Area rose for the seventh month in a row in March, the result of continued bargain hunting in the East Bay and other foreclosure-discounted communities. The past year's steep drop in the median price slowed significantly, indicating that the market might be near its price bottom, a real estate information service reported.

A total of 6,325 new and resale houses and condos closed escrow in the nine-county Bay Area last month. That was up 25.7 percent from 5,032 in February and up 29.1 percent from 4,898 in March 2008, according to MDA DataQuick of San Diego.

Last year's March was the slowest in DataQuick's statistics, which go back to 1988. Last month was the third-slowest March of all time, ahead of last year and 6,210 sales in March 1995. March sales have averaged 9,025 and peaked in March 2004 at 12,645 sales.

Mortgages for more than $417,000 were used to finance 19.0 percent of the Bay Area's home sales last month, compared with more than 60 percent before the credit crunch hit in late summer 2007.

The use of government-insured FHA loans - a common choice among first-time buyers - represented a record 25.4 percent of all Bay Area purchase loans in March, up from 1.5 percent a year ago.

Remember FHA Disaster Looming…”20.7% of all FHA loans issued in 2008 were at least 60 days late.”

The median price paid for all new and resale houses and condos combined fell to $290,000 last month. That was down 1.7 percent from $295,000 in February and down 45.9 percent from $536,000 a year ago. It was 56.4 percent below the peak median of $665,000 reached in June and July of 2007.

The drop in median price overstates the decline in the value of the typical Bay Area home, reflecting more the sluggishness of high-end sales, which are now under-represented in the statistics.

Last month 51.2 percent of all Bay Area resale homes had been foreclosed on at some point in the prior 12 months, down from 52.0 percent in February and up from 23.2 percent a year ago. By county it ranged from 11.5 percent in San Francisco to 70.0 in Solano.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,245 last month, down from $1,286 the previous month, and down from $2,553 a year ago. Last month’s typical mortgage payment, which assumes 20 percent down and a 30-year fixed-rate mortgage, was the lowest since February 1997 when it was $1,236. Adjusted for inflation, current payments are at an all-time low. They are 51.9 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 64.5 percent below the current cycle's peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity is nearing its 2008 peak, 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, and non-owner occupied buying activity is above-average in some markets, MDA DataQuick reported.