SAN FRANCISCO (DQNews)–The Bay Area housing market in May posted modest month-to-month gains in sales and median prices, but those same measures fell sharply from year-ago levels, which had been pumped up artificially by homebuyer tax credits. Move-up buying and new-home sales were especially weak last month, while the share of sales involving distressed properties, cash buyers and investors remained far above normal, a real estate information service reported.
A total of 6,988 new and resale houses and condos sold in the nine-county Bay Area last month. That was up 2.9% from 6,789 in April but down 15.4% from 8,264 in May 2010, according to San Diego-based DataQuick.. Last month’s year-over-year drop was the sharpest since sales fell 22.8% last October.
On average, Bay Area sales have risen 6.6% – about double last month’s gain – between April and May since 1988, when DataQuick’s statistics begin.
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Last month’s sales were the lowest for the month of May since 2008, when 6,216 homes sold, and the third-lowest on record, behind May 1995 and 2008. May sales have ranged from a low of 6,216 in 2008 to a high of 13,567 in 2004, while the average is 9,693. Last month’s sales fell 27.9% below the May average.
Builders sold 370 newly built homes last month in the Bay Area, down 47.1% from a year earlier and the lowest number for a May since at least 1988. Builders have struggled with the weak economy and competition from the resale market, especially distressed properties.
“Given the sluggish start to this spring’s home-buying season, with sales 20 to 30% below average, it’s no surprise we’re logging sharper declines from 2010. Sales got a big shot in the arm a year ago, when people rushed to take advantage of expiring homebuyer tax credits. Today the market must stand on its own, and it’s having a hard time doing that in the absence of stronger job growth and consumer confidence. So far, low mortgage rates and lower home prices aren’t enough to overcome the concern some potential buyers have that prices could fall more. Other would-be buyers are unemployed or underemployed, or can’t qualify for a loan. Scores of would-be move-up buyers owe more than their homes are worth; so they’re stuck,” said John Walsh, DataQuick president.
Article source: http://www.thestreet.com/story/11154938/1/san-francisco-home-sales-volley-like-a-trolley.html