A real estate information service reports sales of homes in the Bay Area home soared last month above the record-low levels of a year ago, marking the largest increase in over six years. With more sales shifted to lower-cost inland markets laden with foreclosures, the median sale price did just the opposite, falling to $400,000 - 36 percent below the previous year.
A total of 7,271 new and resale houses and condos closed escrow in the nine-county Bay Area in September, up 45 percent from September 2007, according to MDA DataQuick. Last month's 45 percent year-over-year sales gain was the highest for any month since April 2002, when sales skyrocketed 49 percent. September 2007 showed a record low of activity as sales plunged after the credit crunch that struck in August 2007 made "jumbo" mortgages more expensive and harder to obtain.
Although sales rose in some Bay Area communities in September, it was the region's less expensive inland markets that pushed sales up so sharply. Contra Costa, Napa, Sonoma and Solano counties combined accounted for nearly 62 percent of Bay Area sales, compared with 52 percent a year ago. Solano County sales doubled from last year, while sales nearly doubled in Contra Costa and Napa counties.
"Inland markets have spoken: Sales take off when prices drop 30 percent or more from the peak," said John Walsh, MDA DataQuick president. "For the inland markets, September's relatively strong sales provide more evidence that a recovery got well under way this summer. Now it's just a question of whether it will stay on track and provide stable prices and fading foreclosures in 2009, or will it get derailed by an economic crisis."
Last month the median price paid for all new and resale houses and condos sold in the Bay Area was $400,000, down a record 36 percent from $625,000 in September 2007, according to MDA DataQuick. September's median stood at its lowest point since it was $400,000 in March 2003, and nearly 39.9 percent below the peak median of $665,000 reached in June, July and August of 2007.
Region-wide price depreciation, which varies by location; the relatively high cost and qualifying difficulties associated with the jumbo loans used to finance pricier homes; and a significant shift toward a higher portion of sales occurring in lower-cost inland markets have all contributed to the drop in median price. Moreover, nearly 42 percent of all existing homes sold across the Bay Area in September had been foreclosed on at some point in the prior 12 months, up from 6.9 percent a year ago. Foreclosures tend to sell at a discount and are concentrated in relatively affordable neighborhoods.
At the county level, foreclosure resales ranged from 9.5 percent of resales in San Francisco to 67.9 percent in Solano County. In the Bay Area's other seven counties, September foreclosure resales were as follows: Alameda, 37.9 percent; Contra Costa, 58.7 percent; Marin, 14.9 percent; Napa, 48.9 percent; Santa Clara, 30.5 percent; San Mateo, 23.8 percent; Sonoma, 48.7 percent.
Home prices in some areas continue to hold up much better, and while sales aren't shooting up as much as in the inland areas, Realtors in the Silicon Valley region are still receiving multiple offers. Julia Keady, a REALTOR® with Alain Pinel Realtors and president-elect of the Silicon Valley Association of REALTORS®, said a Sunnyvale home she sold recently received 29 offers.
"It's a good time to buy a home right now and if homes are priced right, they will sell and even receive multiple offers," Keady said.
Keady encourages buyers who have good credit and are able to qualify for a loan, but are still sitting on the fence to take advantage of the temporary conforming loan limit of $729,750, which will disappear on Dec. 31, 2008, when the new conforming loan limit of $625,500 will take effect.
"If buyers are contemplating on taking advantage of this loan program before it ends, they should act right away," she said. She explained some lenders are requiring these loans to be funded and closed by the end of November, so they can deliver them to government-sponsored enterprises Fannie Mae and Freddie Mac before the end of the year.
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.
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