Home sales in the Bay Area edged up in September and the median sales price also rose slightly from the previous month, as buyers scrambled to take advantage of low mortgage interest rates and the first-time homebuyer tax credit set to expire on November 30. A recovery in the housing market will largely depend on the extension of the homebuyer tax credit and financing, according to real estate experts.
MDA DataQuick, a real estate information service out of San Diego, reported last week that a total of 7,879 new and resale houses and condos sold in the nine-county Bay Area in September, up 4.8 percent from August and up 8.4 percent from September 2008. The month-to-month gain was atypical as sales normally decline around 11 percent from August to September, according to the report.
"This market may be closer to normal than it was a half year ago, but it's still out of kilter, fueled in large part by incentives and the processing of distressed properties," said John Walsh, MDA DataQuick president.
The median price paid for a Bay Area home was $365,000 last month, up 1.4 percent from $360,000 in August, and down 8.8 percent from $400,000 for September a year ago. The year-over-year decline was the smallest since January 2008, when the $550,000 median was off 8.5 percent. The Bay Area median peaked at $665,000 in June 2007.
"The sales mix is still lopsided, tilting toward the low end, and lending institutions are only making really safe mortgage loans," Walsh said. "For those who can buy, there are some very attractive opportunities. But it still looks like a lot of normal supply-and-demand activity has been put on hold until the economy comes back."
In Santa Clara County, sales were up 18.7 percent in September, compared to the same period a year ago and the median home price was at $450,000, down 11 percent from the median in September 2008.
At a general meeting of the Silicon Valley Association of REALTORS® this month, California Association of REALTORS® Executive Vice President Joel Singer said a complete housing recovery and future growth hinges greatly on the extension of the home buyer tax credit and the restoration of mortgage backed securities, namely the extension of lending to higher-priced areas.
Singer told REALTORS® he sees prices increasing in the distressed sale markets as inventory in this range drops, but he is not so sure how the high-end markets will do because of the tight financing. "In 2010, the question for the high-end market is how do you finance it? It will be tough. We are very much at the mercy of the mortgage backed securities," Singer said. "Will lenders step in? Will they be able to do enough to sustain growth on this end?"
The DataQuick report indicates a slight rebound in the availability of so-called "jumbo" mortgages, home loans for more than $417,000, has leveled off. Before the August 2007 credit crunch hit, 60 percent of the Bay Area's home purchase loans were jumbos. By last January that had dropped to 17.1 percent. By July it was 30.1 percent, and last month it was 29.3 percent.
The real estate information service reports the typical monthly mortgage payment that Bay Area buyers committed themselves to paying in September was $1,578, down from $1,580 in August, and down from $1,927 a year ago.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.