In what is becoming a familiar pattern, Bay Area home sales dropped sharply in July, falling 19 percent from June.
The nine-county Bay Area reported the sale of 6,773 homes and condominiums last month, according to MDA DataQuick of San Diego. Sales were down almost 23 percent from a year earlier, and amounted to the lowest number of July sales in 15 years.
The numbers are similar to those for Southern California, where July sales tumbled nearly 21 percent from the previous month. Sonoma County reported single-family home sales falling 21 percent for the same period.
Analysts have suggested that the falling sales are tied to the end of federal tax credits designed to draw homebuyers into a battered housing market.
“There was more to last month’s sales drop than expiring federal homebuyer tax credits, but we think they were the main reason the decline was so sharp,” said John Walsh, MDA DataQuick President. “As the boost from the credits waned, low mortgage rates just weren’t enough to outweigh the weak economic recovery and low consumer confidence.”
Walsh now foresees “a pause in the market.”
“Some potential buyers – including those who held off until the tax credits expired – will take their time to assess market conditions, searching for signs of renewed price cuts,” he said. “Depending on the economy and other factors, that might be what some of them find, especially in areas with a growing number of homes for sale, particularly distressed properties.”
Last month the median price paid for all new and resale homes was $402,000, down 2.0 percent from June but up nearly 2 percent from a year earlier.
The median sales price was nearly 40 percent below the $665,000 peak in July of 2007. The post-boom low was $290,000 in March 2009. That plunge in median prices was exacerbated by what DataQuick describes as “a huge shift in sales toward lower-cost homes, especially inland foreclosures.”
Foreclosure resales – homes that had been foreclosed on in the prior 12 months – in July made up 26 percent of the Bay Area’s resale market. Such resales peaked at 52 percent in February 2009. The monthly average for foreclosure resales over the past 15 years is about 8 percent.
— Robert Digitale