Bay Area homes saw median sale prices fall in July compared with a year ago, as economic jitters kept potential buyers, especially at the high end, out of the market, according to a real estate report released Tuesday.
Throughout the nine counties, the median paid for an existing single-family house in July was $400,000, down 7.5 percent from the same month last year, according to DataQuick, a San Diego real estate research firm. A total of 5,096 homes changed hands in the month, virtually the same as in July 2010.
“More people became more concerned about the future and took a step back to the housing sidelines as we saw an increasing number of negative reports on the economy and jobs, and people fretted about the outcomes of the debt-ceiling debate in Washington, D.C.,” said Andrew LePage, a DataQuick analyst.
The median is strongly influenced by the mix of homes sold: more low-cost homes changing hands results in a lower median. DataQuick said sales of homes above $500,000 fell 19.2 percent compared with a year earlier, while sales of homes below $500,000 were up 3.5 percent over July 2010.
Many of the low-end transactions relied on low-down payment, government-backed Federal Housing Administration mortgages. They accounted for 22.4 percent of all Bay Area home purchase loans in July.
Distressed home sales remain a significant market force. Bank resales of foreclosed homes accounted for 26.6 percent of Bay Area resales in July. Short sales – in which people sell their home for less than they owe on the mortgage – represented 18.8 percent of resold homes.
As has been true throughout the housing downturn, coastal counties with easy access to job centers performed better than those in outlying regions. The median for San Francisco resales was virtually flat at $715,000 versus $714,500 a year earlier. Median prices for existing homes in Santa Clara, San Mateo and Marin counties were down about 3 percent.
“There is no question that Santa Clara and San Francisco (counties) have stood out as being relatively stable, given the strength of their local job markets and the constrained supplies,” LePage said.
But medians declined more steeply in Napa (down 15 percent), Solano (down 9.9 percent), Sonoma (down 8.6 percent), Contra Costa (down 8.5 percent) and Alameda (down 6.4 percent) counties.
For all homes, including resale homes, resale condos and new homes, sales volume inched up 1.7 percent and the median price fell 7 percent to $374,000 from $402,000.
Two competing factors affect the housing outlook for the rest of the year. On the one hand, consumer concerns about their finances were exacerbated by the wild ride the stock market has taken this month. On the other hand, interest rates are at historic lows and home prices are more affordable than in years past.
Even the best-case scenario doesn’t involve an immediate recovery but rather an extended period of prices bouncing along the bottom.
“I think it’s likely we’re in for a long period of stagnation,” LePage said. “If we get worse news on jobs and the economy and see big dips in the stock market, we could see prices come down some more. Of course (even with stagnation) prices will always bounce around a bit.”
The California Association of Realtors, which on Monday issued its report for July, had a similar take.
“Economic uncertainty and recent developments in financial markets have caused hesitation among buyers, the effects of which we may see in the coming months,” said Leslie Appleton-Young, the group’s chief economist, in a statement. “We must see sustained job and income gains along with an increase in consumer confidence before we can expect to see consistent improvement in the housing market.”
E-mail Carolyn Said at csaid@sfchronicle.com.
This article appeared on page D – 1 of the San Francisco Chronicle
Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/08/16/BUD91KO7CA.DTL