With more Bay Area residents choosing to sell their homes, real estate sales in July hit their highest monthly volume in almost seven years, while the median price continued its surge, according to a real estate report released Thursday.
A total of 9,339 new and resale houses and condos changed hands in the nine-county Bay Area in July – up 13.3 percent from July 2012, said DataQuick, a San Diego real estate research firm. The median paid was $562,000, a 33.5 percent increase from the same time last year.
Pent-up buyer demand, an improving regional economy and low interest rates have propelled home prices upward for many months. But a dearth of homes for sale meant the number being sold fell on a year-over-year basis every month since January. That trajectory reversed course in July.
“It was a really strong month,” said Andrew LePage, a DataQuick analyst.
Rising inventory shows the real estate market regaining equilibrium.
“Sellers want to jump on the train by putting their properties on the market, which levels supply and demand,” said Tanja Beck, an agent with Zephyr Real Estate in San Francisco.
More inventory, as well as rising interest rates, should soon rein in the sharp price increases. Although bidding wars still occur, many agents say multiple offers now are measured in smaller numbers – perhaps three bids instead of a dozen.
While San Francisco is the nation’s most competitive market, with 80.5 percent of successful home buyers facing other bids, multiple offers in the city dropped nearly 10 percent from June to July, according to a report from real estate firm Redfin.
Nationwide, fewer bidding wars “points toward the strong sellers’ market beginning to shift toward more balance, giving frustrated home buyers a bit of relief,” Redfin said.
Distress sales are down sharply, another sign of a return to normal. Foreclosure resales were under 5 percent of the total – their lowest level since August 2007, before the credit crunch hit. In February 2009, foreclosure resales were 52 percent of the market, DataQuick said. Their historic monthly average in the Bay Area is about 10 percent of sales.
Short sales – properties sold for less than is owed on the mortgage – were 10 percent of July resales, down from 23.7 percent a year earlier.
Fewer distress sales also mean that people who sell their homes are likely to turn around and buy another property, creating a positive upward spiral.
“There was a time when more than half the sales were the lender pocketing money (in a foreclosure resale) so they just ended there,” LePage said. “Now a greater and greater percentage are traditional sellers, who will move up and buy from someone who themselves will move up.”
Jessica and Josh Rowe exemplify that move-up buyer. The couple, along with their toddler and two French bulldogs, wants to move from San Francisco to the South Bay to live closer to their jobs. They listed their condo in Haight-Ashbury, a three-bedroom remodeled Victorian, at $949,000. It’s likely to go for well above asking price.
“To go from being sellers to being buyers, your confidence gets crazy-hacked,” said Jessica Rowe. “As a seller, you’re on top of the world, you make all this money – but as a buyer you can’t afford to get (something comparable) to what you just sold.”
The Haight condo itself illustrates the market turnaround. When the Rowes bought it three years ago – near the market’s bottom – the previous owners were on the brink of foreclosure. After unsuccessfully listing it at $799,000 for a month, they slashed the price to $755,000, which is what the Rowes paid.
The Bay Area’s median price is now 15.5 percent off the $665,000 peak it reached in summer 2007, LePage said. During the downturn, its nadir was $290,000 in March 2009.
The median represents the middle value of homes sold, meaning half sold for more and half for less. DataQuick said about three-quarters of the median’s increase stems from rising home values, the remainder from a shift in market mix.
More high-end homes and fewer inexpensive ones sold in July. Just over half (51 percent) of sales had mortgages above the old jumbo limit of $417,000, compared with 38.6 percent a year earlier and the low point of 17.1 percent in January 2009.
Federal Housing Administration loans, mostly used by first-time buyers, were 10.6 percent of purchase mortgages in July, down from 16 percent a year earlier. First-time home buyers consistently report getting squeezed out by investors and others paying all cash.
All-cash sales continued to be a strong force, accounting for 24 percent of July purchases, DataQuick said. In February, they peaked at 32.3 percent of sales.
Absentee buyers, who are mainly investors, snapped up 20.9 percent of Bay Area homes in July. Their market share also peaked in February, at 28.7 percent.
Carolyn Said is a San Francisco Chronicle staff writer. E-mail: email@example.com Twitter: @csaid