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Friday, August 21, 2009

DataQuick: California Bay Area home sales hit 4-year high

by Calculated Risk on 8/21/2009 01:19:00 PM

From DataQuick: Bay Area home sales hit 4-year high; median price up again

Bay Area home sales rose last month to the highest level for a July in four years as deals above $500,000 continued to accelerate. ...

The median’s $43,000 gain between June and July was mainly the result of a shift toward a greater portion of sales occurring in higher-priced neighborhoods. The trend has been fueled this summer by several factors, including: More distress in high-end areas, leading to more motivated sellers; more buyers sensing a bottom could be near; and increased availability of larger home loans, which had become more expensive and far more difficult to obtain after the credit crunch hit two years ago.
As high-end sales have taken off in recent months, sales of foreclosures in less-expensive inland areas have tapered off. Last month 34.2 percent of the Bay Area homes that resold were foreclosure resales – homes resold in July that had been foreclosed on in the prior 12 months. Last month’s foreclosure resale level was the lowest since it was 33.3 percent in July 2008. Foreclosure resales peaked at 52 percent of all Bay Area resales in February this year.
“Evidence is mounting that in some areas we’ve approached at least a soft bottom for home prices,” [John Walsh, MDA DataQuick president] said. “But we continue to view that possibility with an abundance of caution, given all of the uncertainty over future foreclosure inventories and ongoing job cuts. The market remains vulnerable.”

A total of 8,771 new and resale houses and condos sold in the nine-county Bay Area last month. That was up 1.5 percent from 8,664 in June and up 15.6 percent from 7,586 in July 2008.

Although last month’s sales were the highest for the month of July in four years, and the highest for any month since August 2006, they were still 7.8 percent lower than the average of 9,512 homes sold during the month of July going back to 1988, when DataQuick’s statistics begin. July sales have varied between a low of 6,666 sales in 1995 and a peak of 14,258 in 2004.

... Foreclosure activity is off its recent peak but remains high by historical standards ...
emphasis added
As always, be very careful with the median home price. DataQuick does a good job of explaining how it is being distorted by the mix of homes sold.

Last year financing for higher priced homes was very difficult, so it is no surprise that with a combination of increasing distressed sales in the mid-to-high end areas, and more financing, sales have picked up some.