Thursday, April 17, 2008

DataQuick on Bay Area: Very Low Sales

by Bill McBride on 4/17/2008 03:38:00 PM

From DataQuick Bay Area home sales remain at two-decade low

For the seventh month in a row, Bay Area home sales were at their lowest level in more than two decades as potential buyers and sellers continued to wait out market turbulence, a real estate information service reported.

A total of 4,898 new and resale houses and condos sold in the nine- county Bay Area in March. That was up 22.8 percent from 3,989 in February, and down 41.1 percent from 8,317 for March 2007, DataQuick Information Systems reported.

Last month was the slowest March in DataQuick's statistics, which go back to 1988. Record monthly lows have been logged in since September. The sales increase between February and March this year was the lowest on record. Normally sales increase by 40 percent.
On prices:
The median price paid for a Bay Area home was $536,000 last month, down 2.2 percent from $548,000 in February, and down 16.1 percent from $639,000 in March last year. Last month's median was 19.4 percent lower than the peak median of $665,000 reached last June and July.

Last month's median price would have been closer to $597,000 if the availability of jumbo home loans had remained stable. A year ago jumbo loans, mortgages above $417,000, accounted for 62.2 percent of all Bay Area home loans. Last month they were 29.8 percent.
This is why the Case-Shiller repeat home method is better than the median price method for calculating home price changes. Using the median price method, it appeared prices were holding up pretty well at the beginning of the housing bust simply because the mix changed - fewer low end homes were sold. Now it's the high end being hit. And finally ...
Foreclosure activity is at record levels ...
The California foreclosure activity data should be released soon for Q1. It will probably be stunning.