Bay Area Real Estate Market Edges Up

DataQuick reports Bay Area real estate sales saw a slight increase at the close of the year. The market saw its sixth consecutive year-on-year gain with a 4.4% …

DataQuick reports Bay Area real estate sales saw a slight increase at the close of the year. The market saw its sixth consecutive year-on-year gain with a 4.4% sales increase over December 2010 as well as a gain of 18.6% over the previous month. Experts note the driver for the gain was the result of bottom feeding in the market as buyers scooped up foreclosed homes. There was very little mid-market performance, leaving any movement to be determined by bargain hunters, investors and top-tier luxury sales. For more on this continue reading the following article from TheStreet.

The Bay Area’s housing market rounded out 2011 much the way it started it: with constricted and atypical sales activity, lots of bottom feeding, and a largely dormant mid- to move-up market. Sales were up slightly last month, while prices dropped, a real estate information service reported.

A total of 7,494 new and resale houses and condos sold in the nine-county Bay Area in December. That was up 18.6% from 6,317 in November, and up 4.4% from 7,178 in December 2010. The year-over-year increase was the sixth in a row, according to San Diego-based DataQuick.

"We’ll remember 2011 as much for what didn’t happen as for what did. People put discretionary buying and selling on hold, except at the very top of the market. The spectacular gains in affordability, based on the combination of lower prices and ultra-low interest rates, was largely theoretical for many people because it was so hard to get a mortgage. That, combined with negative equity and economic uncertainty, kept people away," said John Walsh, DataQuick president.

"Many of the deals that did make their way through the system were in the distressed arena – foreclosures and short sales. Much of it was deeply discounted cash purchases, disproportionately at the lower end of the price scale," he said.

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The median price paid for all new and resale houses and condos sold in the Bay Area last month was $351,500. That was down 3.5% from $363,500 in November, and down 6.3% from $375,000 in December 2010. The median has declined on a year-over-year basis for the last fifteen months.

Last month distressed property sales — the combination of foreclosure resales and "short sales" — rose to 49.6% of the resale market. That was up from 45.9% in November and up from 48.2% from December 2010.

Last month 31.4% of Bay Area sales were for $500,000 or more, down from a revised 32% in November, and down from 35% in December 2010.

Government-insured FHA home purchase loans, a popular choice among first-time buyers, accounted for 23.4% of all Bay Area home purchase mortgages in December, up from 21% in November and up from 23.2% a year earlier.

One indicator of mortgage availability that had seen improvement this year dropped again in December, when 11.7% of the Bay Area’s home purchase loans were adjustable-rate mortgages, down from a revised 12.3% in November, and up from 9.6% in December last year. Over the last decade, ARMs have accounted for 50.8% of all purchase loans.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 26.2% of last month’s purchase lending, down from a revised 29% in November, and down from 31.6% a year earlier.

Last month absentee buyers — mostly investors — purchased a record 23.8% of all Bay Area homes sold, up from 21.7 %in November and 20.2% a year earlier. Absentee buyers paid a median $225,000 in December, down from $250,000 in November and $262,750 a year earlier.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $1,336, down from $1,387 in November, and down from $1,558 a year earlier. Adjusted for inflation, last month’s payment was 51.6% below the typical payment in spring 1989, the peak of the prior real estate cycle.

This article was republished with permission from TheStreet.


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