Northern California Home sales in the Bay Area edged up in September and the median sale price rose 1.4% over August, as buyers scrambled to take advantage of low mortgage interest rates and the tax credit due to expire at the end of November.
A total of 7,879 new and resale houses and condos sold in the nine- county Bay Area last month. That was up 4.8 percent from 7,518 in August and up 8.4 percent from 7,271 in September 2008, according to MDA DataQuick of San Diego.
The month-to-month gain was atypical: sales normally decline around 11 percent from August to September. In DataQuick’s statistics, which go back to 1988, September sales have increased three other times, in 1988, 1992 and 2008. Last month’s year-over-year sales gain was the 13th in a row.
“This market is closer to normal than it was a a half year ago… The sales mix is still lopsided, tilting toward the low end. For those who can buy, there are some very attractive opportunities,” said John Walsh, MDA DataQuick president.
The median price paid for a Bay Area home was $365,000 last month. That was up 1.4 percent from $360,000 in August, and down 8.8 percent from $400,000 for September a year ago. The year-over-year decline was the smallest since January 2008, when the $550,000 median was off 8.5 percent. The Bay Area median peaked at $665,000 in June 2007.
About half the decline in median since then is due to a drop in home values, the other half can be attributed to the shift in market mix.
A slight rebound in the availability of so-called “jumbo” mortgages, home loans for more than $417,000, has leveled off. Before the August 2007 credit crunch hit, 60 percent of the Bay Area’s home purchase loans were jumbos. By last January that had dropped to 17.1 percent. By July it was 30.1 percent, and last month it was 29.3 percent.
Last month 32.8 percent of all homes resold in the Bay Area had been foreclosed on in the prior 12 months, down from 34.4 percent in August and the lowest since the figure was 29.9 percent in June 2008. The peak was 52.0 percent this February.
The use of government-insured FHA loans – a common choice among first- time buyers – represented 29.3 percent of all Bay Area purchase loans in September, down slightly from 28.8 percent in August, but up from 13.7 percent a year ago.
The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,578 last month, down from $1,580 the previous month, and down from $1,927 a year ago. Adjusted for inflation, current payments are 40 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 55.7 percent below the current cycle’s peak in July 2007.
Affordability is at levels not seen since the 1970’s. Just compare the average mortgage payment to average No California Bay Area rents below.
Average 3 bedroom Bay Area rental house by county:
Contra Costa/Alameda: $1800
San Franicsco/Santa Clara: $2250
San Mateo: $2500
Marin: $2900
Now you can see why investors are getting serious about buying properties right now. When was the last time you could get positive cash flow paying full price for property? Now think about how much money you will make when you buy 30-50% below market value? Wow, the wealth building is incredible.
If you want to learn how to find those deals, and get 30-50% off your purchase… then you have to be on my Wholesale Foreclosure Buying Secrets Webinar and Call, Wednesday, October 28th (6pm PDT). This new investor call is FREE to first time attendees or Foreclosures.com list members. You must register in advance HERE. For questions, please call 800-310-7730 x2.
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