June 23rd, 2012
The Bay Area’s housing market continued to heat up as summer got underway in June, with sales jumping 7.2 percent from a year ago and the median sale price surging to its highest level in nearly four years, according to a report released this week by DataQuick, the La Jolla-based real estate information services firm.
According to DataQuick, the median price for all housing rose 10.4 percent in the nine-county Bay Area last month to $417,000, up from $377,750 last June and $400,000 in May. That was the highest median price for the region since August 2008.
What’s causing the steady increase in the Bay Area median? While it’s pretty clear that all real estate is starting to appreciate once again, DataQuick analysts also suspect that it’s the result of an ongoing shift in the types of homes selling, slightly improved mortgage loan availability, and continued record low interest rates.
My sense is that it’s also a simple matter of supply and demand here in the Bay Area. As I’ve reported for many months now, the inventory of homes for sale is at extremely low levels in many of our cities. Some communities have less than half the homes on the market today than they had just a year ago. That’s prompting multiple offers and bids well over the asking price in many cases. Until the supply increases, look for more of the same in the months ahead.
It has been encouraging, though, to see the steady improvement in our market. More and more of our sales are “normal” transactions compared to distressed property sales, which were the lion’s share of deals a year or two ago. This bodes well for the continuing recovery of the market and a return to normalcy.
“Some of today’s stats are similar to what we saw in the thick of the housing downturn back in 2009, only in reverse: Instead of foreclosure resales soaring they’re waning, and instead of high-end sales slumping they’re posting some of the larger sales gains,” noted John Walsh, DataQuick president.
Last month foreclosure resales and short sales made up 36.1 percent of the resale market, down from 39 percent in May and 44.3 percent from a year ago. Foreclosure resales peaked at 52 percent in February 2009, but have since dropped steadily to just 18.1 percent last month.
A total of 8,577 new and resale homes were sold in the nine-county Bay Area last month, up 7.2 percent from 7,998 for June 2011.
Walsh said we’ve come a long ways on the road to recovery, but sales in the Bay Area were still 14.8 percent below their average for the month of June, which was just over 10,000 transactions.
Sonoma and Napa counties enjoyed the biggest sales gains last month at 25.2 percent and 23.7 percent respectively, but all Bay Area counties except Solano saw improving home sales. Contra Costa County saw the biggest median price increase at 17.7 percent in June, followed by Solano County at 12.7 percent.