Northern California joins Southern California's good housing news. (From last week… Year-over-year So. California March home sales increased for the ninth month in a row, led by strong foreclosure resales. The median price paid for a home was unchanged from January and February, indicating a floor in pricing maybe forming. More here: So. California Home Sales Up Again).
This just in… Year-over-year March home sales in the San Francisco Bay Area rose for the seventh month in a row, the result of continued bargain hunting in the East Bay and other foreclosure-discounted communities. The past year's steep drop in the median price slowed significantly, indicating that the market might be near its price bottom.
A total of 6,325 new and resale houses and condos closed escrow in the nine-county San Francisco Bay Area in March. That was up 25.7 percent from 5,032 in February and up 29.1 percent from 4,898 in March 2008, according to MDA DataQuick of San Diego.
"More than any other region, the San Francisco Bay Area is waiting for so-called jumbo loans to come back on line. Even with prices off their peaks, most home purchases in the upper half of the market still require a mortgage for more than $417,000, which are far more difficult to come by. We think there’s a good chance those larger loans will become more available during the second or third quarter,” said John Walsh, MDA DataQuick president.
"For now, the extent to which prices have fallen in the upscale markets is more difficult to gauge," he added, "because many of those areas are essentially in hibernation, with scant sales."
Mortgages for more than $417,000 were used to finance 19.0 percent of the Bay Area's home sales last month, compared with more than 60 percent before the credit crunch hit in late summer 2007. The use of government-insured FHA loans – a common choice among first-time buyers – represented a record 25.4 percent of all Bay Area purchase loans in March, up from 1.5 percent a year ago.
The median price paid for all new and resale houses and condos combined fell to $290,000 last month. That was down 1.7 percent from $295,000 in February and down 45.9 percent from $536,000 a year ago. It was 56.4 percent below the peak median of $665,000 reached in June and July of 2007.
The drop in median price overstates the decline in the value of the typical Bay Area home, reflecting more the sluggishness of high-end sales, which are now under-represented in the statistics.
Last month 51.2 percent of all Bay Area resale homes had been foreclosed on at some point in the prior 12 months, down from 52.0 percent in February and up from 23.2 percent a year ago. By county it ranged from 11.5 percent in San Francisco to 70.0 in Solano.
The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,245 last month, down from $1,286 the previous month, and down from $2,553 a year ago. Last month’s typical mortgage payment, which assumes 20 percent down and a 30-year fixed-rate mortgage, was the lowest since February 1997 when it was $1,236. Adjusted for inflation, current payments are at an all-time low. They are 51.9 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 64.5 percent below the current cycle's peak in July 2007.
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Sales Volume |
Median Price |
||||
|
All homes |
Mar-08 |
Mar-09 |
%Chng |
Mar-08 |
Mar-09 |
%Chng |
|
Alameda |
971 |
1,216 |
25.2% |
$487,500 |
$280,000 |
-42.6% |
|
Contra Costa |
973 |
1,639 |
68.4% |
$420,500 |
$220,000 |
-47.7% |
|
Marin |
148 |
161 |
8.8% |
$788,500 |
$585,000 |
-25.8% |
|
Napa |
72 |
124 |
72.2% |
$469,000 |
$339,000 |
-27.7% |
|
Santa Clara |
1,105 |
1,288 |
16.6% |
$620,000 |
$390,000 |
-37.1% |
|
San Francisco |
508 |
332 |
-34.6% |
$755,000 |
$608,000 |
-19.5% |
|
San Mateo |
438 |
380 |
-13.2% |
$723,000 |
$506,000 |
-30.0% |
|
Solano |
356 |
722 |
102.8% |
$330,000 |
$180,000 |
-45.5% |
|
Sonoma |
327 |
463 |
41.6% |
$409,500 |
$304,100 |
-25.7% |
|
Bay Area |
4,898 |
6,325 |
29.1% |
$536,000 |
$290,000 |
-45.9% |
Foreclosure activity is up (Foreclosures Soar in March, Up 44 Percent Over February's High), while financing with adjustable-rate mortgages is at an all-time low, as is financing with multiple mortgages. Down payment sizes and flipping rates are stable, and non-owner occupied buying activity is above-average in some markets.
This is a great time to be a home buyer, especially a foreclosure home buyer. In many of the hardest hit areas, rents are actually higher than a standard mortgage. And with prices down over 50% from the peak and mortgage rates at levels not seen since the 1970's, there has never been a more affordable time to buy real estate. I don't expect rates to stay this low for long as inflation pressures are just around the corner.
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