Carolyn Said, Chronicle Staff Writer
Friday, August 20, 2010
Bay Area home sales slumped by almost 23 percent last month compared with last year as the federal home buyer tax credit expired and buyers stayed on the sidelines despite record-low interest rates, according to a real estate report released Thursday.
"It was a significant drop," said Andrew LePage, an analyst with MDA DataQuick, the San Diego real estate service that released the report. "It was to be expected (after the tax credit expired), but no one knew the magnitude. For seasonal reasons, you normally see a bit of a drop from June to July, but this was triple that."
A total of 6,773 homes, including existing homes, condos and new homes, changed hands in the nine-county region in July, DataQuick said. That was a 22.8 percent decline from the same time last year and represented the lowest July sales volume in 15 years. For existing single-family homes, sales were down 22.5 percent to 5,104 homes.
The median price edged up as more high-end homes changed hands. For existing homes, it rose 5.9 percent to $432,500. For all homes, it was up 1.8 percent to $402,000. The median is skewed by the mixture of homes sold.
No matter what your metaphor, properties are not flying through windows anymore. Foreclosures are up in Silicon Valley, too. Inventory is rising, many properties listed as pending are actually short sales that banks can put into limbo, while foreclosures loom on more and more high-end properties. Check out this lovely location that just received a Notice of Default.
The average monthly sales drop between June and July is 6.3 percent, according to MDA DataQuick. Wow, this spring had extra bounce from the federal tax credits! It’s not every year you get a 22.8% drop once it’s over!
Those Debbie Downers over at the SF Chronicle just can’t stop the gloom and doom. The article mentions double-dip several times. Hey, you want a double dip? How about two scoops of ice cream! That should turn your frown upside down! Then take a couple of swim sessions in your backyard pool… before the bank repossesses it!
Here’s more great news! The average mortgage payment in the Bay Area is down to $1641 a month, down from $1709 last month. Woo-hoo low interest rates! If you adjust for inflation, that payment is 35 percent below the typical payment in spring 1989 (the peak of the last real estate cycle). And compared to the July 2007 peak… it’s down 54.5 percent. These numbers are not just affected by the record low interest rates. Difficulty in getting jumbo financing keeps home loan amounts down as well. Jumbo mortgages were 36.1 percent of July’s Bay Area loans. That’s certainly up from January 2009’s 17.1 percent (the low for jumbos)! Boo-ya!
But just to give you an idea how much RBA (Real Bay Area) Kool-Aid was being served recently, back before the credit crunch in August 2007, the percent of jumbo mortgages was… (are you ready?)
Over. Sixty. Per cent.
I can’t see why this should put any downward pressure on RBA home prices, though!