Bay Area Home Sales Fall Sharply in July

Following the same pattern as Southern California, Bay Area Home Sales collapsed in July to the lowest level in 15 years. The post-tax-credit hangover is here.

DataQuick reports Bay Area July Home Sales Down Sharply; Median Price Slips From June

Bay Area home sales dropped sharply last month to the lowest level for a July in 15 years as the economy sputtered along and the housing market adjusted to life without federal home buyer tax credits. The median sale price dipped below the prior month and rose only slightly from a year earlier, a real estate information service reported.Last month a total of 6,773 new and resale homes closed escrows in the nine-county Bay Area, down 19.1 percent from 8,373 in June and down 22.8 percent from 8,771 in July 2009, according to MDA DataQuick of San Diego.

It was the slowest July since 1995, when 6,666 homes sold. Last month’s sales were 28.8 percent lower than the July average of 9,515 transactions since 1988, when DataQuick’s statistics begin.

July’s 22.8 percent year-over-year sales decline was the largest for any month since May 2008, when sales fell 23.1 percent from a year earlier.

On average, Bay Area sales have declined 6.3 percent between June and July – about one-third of last month’s 19.1 percent drop, which was the largest since 2006, when sales fell 21.7 percent between June and July.

“There was more to last month’s sales drop than expiring federal home buyer tax credits, but we think they were the main reason the decline was so sharp. As the boost from the credits waned, low mortgage rates just weren’t enough to outweigh the weak economic recovery and low consumer confidence,” said John Walsh, MDA DataQuick President.

“There’s been a pause in the market. Some potential buyers – including those who held off until the tax credits expired – will take their time to assess market conditions, searching for signs of renewed price cuts. Depending on the economy and other factors, that might be what some of them find, especially in areas with a growing number of homes for sale – particularly distressed properties.”

Last month the median paid for all new and resale houses and condos combined was $402,000, down 2.0 percent from $410,000 in June but up 1.8 percent from $395,000 in July 2009.

Last month marked the first in which the median fell month-to-month since April this year, when it dipped 2.6 percent from March. It was the same, $410,000, in May and June.

On a year-over-year basis, the Bay Area median has risen for 10 straight months, though July’s gain was the smallest in that series. July’s median was 39.5 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.