Bay Area Housing Market Trending toward Normal

“Ho-hum” is the word DataQuick used torndescribe the housing market in California’s Bay Area last month.   A total of 7,595 new and resale houses andrncondos sold in October in the nine county area around San Francisco, anrnincrease of 6.4 percent from 7,141 the month before and 3.9 percent lower thanrnthe 7,902 sold in October 2012.</p

Sales in October have averaged 8,553 inrnthe years since 1988 when DataQuick started keeping records.  Last month was, therefore 11.2 percent belowrnaverage.  The October range is from a lowrnof 5,486 sales in 2007 and a high of 13,392 in October 2003.  Bay area sales have not exceeded the averagernin any month in more than seven years.</p

The median price paid for a home in thernarea in October was $539,750, up 1.8 percent from $530,000 in September, and uprn29.7 percent from $416,000 in October 2012.   DataQuick estimated that about three-quartersrnof the 29.7 percent annual increase represented an increase in home valuesrnwhile the remainder was a factor of market mix – more mid- to high-end salesrnand fewer low-cost inland distressed sales. <br /<br /The peak price in the area so far this year was $562,000 in July.  This was also the highest median price sincernDecember 2007.  Prices peaked in June andrnJuly 2007 at $665,000 and by March 2009 the median had fallen to $290,000.  <br /<br /"At different times in recent years we've had various peaks or troughs when itrncomes to sales volume, prices, foreclosure activity, cash sales, absentee-ownerrnsales, various home loan options, you name it. All of these market componentsrnare now trending toward normal. We are still a ways away, but the market isrnslowly re-establishing equilibrium," said John Walsh, DataQuick president. <br /<br /"A lot of market drag can be attributed to skittish market participants,rnespecially buyers and lenders. Comfort levels do rise with more stability andrnpredictability – factors that could contribute to increased activity well intornnext year and beyond,” he said. <br /<br /The number of homes sold for less than $500,000 dropped 26.4 percentrnyear-over-year, while the number sold for more increased 15.9 percent,rnDataQuick reported. <br /<br /Foreclosure re-sales and short sales made up about 14 percent of the existingrnhome market, about the same as in September but down from 35 percent in Octoberrn2012.  Foreclosure re-sales representedrn3.6 percent of sales and short sales 10.3 percent.  </p

Buyers brought $2.1 billion in cash tornthe closing table, either as a down payment or for a cash purchase.  All cash sales appear to have accounted forrn22.8 percent of sales in October, down from 23.0 percent the month before and 29.6rnpercent a year earlier.  </p

Home buyers borrowed $3.0 billion inrnmortgage money.  The most active lenderrnwas Wells Fargo with almost 15 percent of the market.  No other lenders cracked 5 percent.</p

Adjustable rate mortgages (ARMs) stillrnfigure prominently in the California real estate market.  These loans accounted for 20.5 percent of thernBay Area’s home purchase loans in October. That was the highest since 20.7rnpercent in August 2008.  It was up from arnrevised 20.2 percent in September, and up from 11.8 percent in October lastrnyear. Since 2000, ARMs have accounted for 47.5 percent of all purchase loans.rnARMs hit a low of 3.0 percent of loans in January 2009.  The Mortgage Bankers Association saidrnWednesday that nationally ARMs had a market share of 7 percent the previousrnweek, a number that has varied little over the last year.  As 66 percent of loans in the MBA databasernwere refinances for which ARMs are an exceedingly rare choice, we can assumernthe national market share of ARMs is slightly less than 16 percent.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.