June 22, 2011 (Jeff Alan)
Bay Area home sales and prices posted modest gains in May compared to April, but were sharply below the levels experienced in May 2010, which were inflated due to the surge in sales caused by the end of the first-time homebuyers tax credit, according to information collected by DataQuick.
A total of 6,988 new and resale homes were sold in the nine county Bay Area, which includes Alameda, Contra Costa, Marin, Napa, Santa Clara, San Francisco, San Mateo, Solano and Sonoma Counties, in May 2011. That was an increase of 2.9 percent from April’s 6,789 sales, but down 15.4 percent from May of 2010 which recorded 8,264 sales.
As a further sign of this year’s weak spring selling season, the Bay Area historically see’s a sales increase of 6.6 percent between April and May. May’s sales were the third lowest on record for that month since DataQuick started tracking sales in 1988, with only 1995 and 2008 being worse. Typically the Bay Area averages 9,693 sales in the month of May.
Sales of newly built homes were at a record low for the month of May with only 370 sales recorded.
“Given the sluggish start to this spring’s home-buying season, with sales 20 to 30 percent 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.
The median price for new and re-sale homes and condos was up 3.3 percent to $372,000 in May compared to April. The median price was still down 9.3 percent from $410,000 in May of 2010. Year-over-year prices have fallen 8 months in row. The fall in year-over-year sales and prices is attributed to the sales surge caused by the end of the first-time homebuyers tax credit last year.
Distressed home sales made up about 45 percent of the Bay Area’s resale market last month, with foreclosure sales accounting for 26.9 percent of re-sales in May, while short sales made up about 18.3 percent of Bay Area re-sales last month.
Tags: Bay Area, DataQuick, home sales, home prices, spring selling season, median sales price, new homes, re-sale homes