For sale: Tight supply pushes sales to lowest in six years
The ongoing tight Bay Area housing market pushed December home sales down to their lowest level in six years, driving the median sales price for single-family homes up 21.3 percent – to $570,000.
Across the nine-county Bay Area, December saw only 4,584 single-family homes sold, the lowest number for any December since 2007 according to data released Wednesday by DataQuick.
The dip was helped by a sharp drop in foreclosure resales and short sales, which fell to less than half of what they were a year ago, the real estate information service said. The continuing decline in foreclosures is good news for the region’s housing market, which is likely to see a spring rebound as thousands of homeowners finally above water on their mortgages may be in position to sell for the first time since the downturn. A larger number of homes for sale should also dampen, but not stall, further price increases.
“Our next opportunity to get a good read on where the market’s heading will be spring- March at the earliest- because that’s when a lot of traditional buyers and sellers get back into the housing market,” said DataQuick analyst Andrew LePage. “You still have people, particularly in the inland areas, who owe more than their homes are worth and can’t practically sell yet or are going to wait until spring. Then there are those who are holding out because they’re not content yet with what their home will fetch.”
Like the rest of the Bay Area, Contra Costa County had its lowest December single- family home sales in seven years. Alameda County’s December sales were at a six-year low and Santa Clara County saw a five- year low.
San Mateo County, which had a higher median sale price, had a 10.8 percent increase in sales from the year before. “High-end areas tend to be more stable because prices tended to not go up as much in the boom times or go down as much during the mortgage crises,” LePage said.
Along with reluctant sellers, the Bay Area and much of California continue to see sluggish new home construction, further stifling sales.
“Inventory has been incredibly low, and that continues to be our biggest challenge and our biggest problem,” said Myron Von Raesfeld, a Santa Clara County- based broker at ClickHome Realty and president of the Santa Clara Association of Realtors. “Last week, the entire city of Santa Clara had 28 townhomes, condos and homes on the market. I have never seen anything like that before.”
The number of all types of homes that sold for less than $500,000 in December was down 28.9 percent from last year, according to DataQuick. Homes that sold for more than $500,000 were up 12.3 percent.
The lack of inventory drove December’s median Bay Area price for all types of homes 23.9 percent higher than the year before and represented the 21st consecutive month of price increases, Data Quick reported. The Bay Area’s median price has risen more than 20 percent on a year-over-year basis for 14 consecutive months.
The result was that “buyers took a break for a couple of weeks,” said Laura Wucher of Better Homes and Gardens Mason- McDuffie Real Estate, who works with buyers and sellers in Contra Costa County. “They’re just a little more skittish.”
The median sale price of an existing single- family home was up 30.2 percent in San Mateo County to $846,500; up 24.7 percent in Alameda County, to $560,000; up 24.2 percent in Contra Costa County, to $410,000; and up 13.7 percent in Santa Clara County, to $685,000.
First- time home buyers Himanshu and Neeti Sharma were living in Emeryville and looking to buy somewhere along the BART line to get to their jobs in San Francisco. But they were repeatedly beat out by buyers offering all cash.
When the market slowed in December, the Sharmas paid list price for a three-bedroom home in Pleasant Hill.
“We got lucky,” the Sharmas said. “December was a great time to buy.”
If the trend of year- over- year price appreciations of 20 percent continues, a typical home would sell for $50,000 to $60,000 more by spring, DataQuick President John Walsh said in a statement.
“If prices go up,” LePage added in an interview, “a lot more people will have equity, or at least can break even on a sale. That’s the theory. The problem remains on the supply side. It’s the Bay Area, after all, and there is not a lot of new construction going on.”
By Dan Nakaso and Pete Carey- Bay Area New Group- January 16, 2014