Bay Area Home Sales Losing Stream

With tax credits expiring, the San Francisco Bay Area housing market is showing signs of weakness.

DataQuick reports: Bay Area June Home Sales Send Mixed Signals

The number of Bay Area homes sold last month inched up from May but fell short of a year ago as the impact of the federal home buyer tax credits began to fade. The median sale price remained 16.5 percent higher than last year, thanks largely to fewer foreclosures re-selling and more high-end activity, a real estate information service reported.Last month a total of 8,373 homes closed escrows in the nine-county Bay Area, up 1.3 percent from 8,264 in May but down 3.1 percent from 8,644 in June 2009, according to MDA DataQuick of San Diego.

On average, Bay Area sales have risen 3.9 percent between May and June since 1988, when DataQuick’s statistics begin. Last month’s sales were the third-lowest for a June – behind 2008 and 2007 – since June 1995, when 7,780 sold. Last month’s sales were 17.9 percent lower than the average June sales tally – 10,198 – since 1988.

“The next few months should be very interesting: We’re about to see how well the housing market can fly on its own. The tax credits no doubt stole some demand from the rest of this year, and soon we’ll have a better sense of just how much,” said John Walsh, MDA DataQuick President.

“The Bay Area market is getting a boost from super-low mortgage rates and a slightly friendlier lending environment for high-end borrowers,” he added. “But, barring new government stimulus, the housing market will be relying very heavily on improvements in the economy. A lot will depend on how many people find jobs, or stop worrying about losing the one they have.”

Last month the median paid for all new and resale houses and condos combined was $410,000, the same as in May and up 16.5 percent from $352,000 in June 2009.

The median has risen on a year-over-year basis for nine straight months, though in June it was still 38.3 percent below the $665,000 peak in June/July 2007. The post-boom low was $290,000 in March 2009. The median’s peak-to-trough plunge was caused by a decline in home values as well as a huge shift in sales toward lower-cost homes, especially inland foreclosures.

Last month foreclosure resales – homes that had been foreclosed on in the prior 12 months – fell to 26.7 percent of the Bay Area’s resale market. That was the lowest since April 2008 and was down from 26.8 percent in May and 36.7 percent in June 2009. Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average for foreclosure resales over the past 15 years is 7.9 percent.