Investors paying in cash continue to drive sales in the Bay Area, with the uptick in purchases for the month of February, with the majority of sales occurring among lower-priced homes. DataQuick reported a sales increase of 4.1% from January and 14.2% increase on the year, marking the eighth consecutive annual increase for the area. Experts warn that February data is not representative of a trend due to timing in the year, but the gains are still welcome considering the persistence of tight credit restrictions and drop in median sales prices. Short sales and foreclosures accounted for roughly half of sales for the month, although sales of homes priced at $500,000 or more climbed a fractional percentage to 28%. For more on this continue reading the following article from TheStreet.
Last month’s Bay Area home sales bounced up a bit more off bottom, fueled in large part by investors with cash who were buying discounted properties in the lower half of the price spectrum. The median price paid for a home dropped year over year for the 17th month in row, a real estate information service reported.
A total of 5,702 new and resale houses and condos sold in the nine-county Bay Area in February. That was up 4.1% from 5,479 in January, and up 14.2% from 4,991 in February 2011. The year-over-year sales increase was the eighth in a row, according to San Diego-based DataQuick.
"The market is still strange, just a little less strange than it was. We also need to keep in mind that, when it comes to statistical trends, February is the least typical month of the year. Over the winter you’re left with a higher concentration of investors and people who must buy or sell because of a major life event.
"In the spring, when many traditional buyers return, we’ll get a much better read on the market. Meanwhile, many potential buyers are still waiting for the lending spigot to open more. Drum-tight credit conditions continue to undermine housing, along with negative equity and the various uncertainties plaguing would-be buyers," said John Walsh, DataQuick president.
The median price paid for all new and resale houses and condos sold in the Bay Area last month was $325,500. That was down 0.3% from $326,000 in January, and down 3.6% from $337,250 in February 2011. The median has declined on a year-over-year basis every month since October 2010.
Last month distressed property sales — the combination of foreclosure resales and "short sales" — made up about half of the Bay Area’s resale market.
Foreclosure resales — homes that had been foreclosed on in the prior 12 months — accounted for 27.4% of resales in February. That was up from a revised 27.2% in January, and down from 32.6% a year ago. Foreclosure resales peaked in the current cycle at 52.0% in February 2009. The monthly average for foreclosure resales over the past 15 years is about 9%.
Short sales — transactions where the sale price fell short of what was owed on the property — made up an estimated 23.1% of Bay Area resales last month. That was down slightly from an estimated 23.5% in January — the high point for this cycle — and up from 20.1 % a year earlier.
Last month 28% of Bay Area sales were for $500,000 or more, up from a revised 27.4% in January, and down from 30.6% in February 2011. The low for the current cycle was January 2009, when just 22.7% of sales crossed the $500,000 threshold. Over the past 10 years, a monthly average of 47.7% of homes sold for $500,000-plus.
The number of homes that sold for $500,000 or more last month rose 1.8% from February 2011, while sales under $500,000 rose 14.9% year-over-year and sales below $300,000 increased 16.8%.
This article was republished with permission from TheStreet.