Bay Area homes sales surged 14.5 percent from May to June, though are still below levels from 2010.
La Jolla, CA.—-Bay Area home sales rose sharply last month from May to the highest level for any month since June 2010, when outgoing homebuyer tax credits gave housing demand a final boost. The median price rose slightly from May but remained below the year-ago level for the ninth consecutive month amid a sluggish move-up market and a higher share of sub-$300,000 transactions, a real estate information service reported.
A total of 7,998 new and resale houses and condos sold in the nine-county Bay Area last month. That was up 14.5 percent from 6,988 in May but down 4.5 percent from 8,373 in June 2010, according to San Diego-based DataQuick.
On average, Bay Area sales have risen 4.9 percent between May and June since 1988, when DataQuick’s statistics begin.
Last month’s sales were the lowest for the month of June since 2008, when 7,178 homes sold. June sales have ranged from a low of 7,118 in 1993 to a high of 15,735 in 2004, while the average is 10,129. Sales last month fell 21.0 percent below the June average. June is normally a strong month and, among all months, it’s had the highest number of sales most often – seven of the past 23 years.
In June last year – the peak month for 2010 – sales were bolstered by state and federal efforts to stimulate the housing market via homebuyer tax credits. Those credits had expired or been largely depleted by July 2010, when sales plunged 19 percent from the month before and 23 percent from the previous July.
While the 14.5 percent jump in sales last month from May was nearly triple the normal increase, higher May-to-June gains were recorded as recently as 2008 and 2009, which logged 15.5 percent and 16.1 percent gains, respectively.
“It’s difficult to point to one specific thing that caused last month’s sales to jump more than usual from May. It wasn’t just in the Bay Area – we saw it across much of the state. June likely benefitted from a combination of factors, such as price reductions, low mortgage rates and perhaps a batch of short sale transactions from spring that took months to close. Bargain hunters, mainly investors and first-time buyers, remain very active,” said John Walsh, DataQuick president.
“While overall consumer confidence remains low, folks in certain industries such as high-tech are feeling more confident,” he continued. “Let’s keep in mind, however, that last month was not a particularly strong June, historically speaking, and one month’s increase in sales from the prior month doesn’t constitute a trend.”
The median price paid for all new and resale houses and condos sold in the Bay Area last month was $377,750, up 1.5 percent from May but down 7.9 percent from $410,000 in June 2010. Last month’s median was the highest since it was $380,000 last November.
Last month’s median was 30.3 percent higher than the low point for the current real estate cycle – $290,000 in March 2009. However, the June median was 43.2 percent below the peak $665,000 median reached in June/July 2007. Around half of the median’s peak-to-trough drop was the result of a decline in home values, while the other half reflects a shift in the sales mix toward lower-cost homes, especially inland foreclosures.
When viewed by several major price segments, it’s clear that the middle of the Bay Area market, roughly defined as $400,000 to $800,000, has taken the biggest hit over the past year. Sales in that price range accounted for 30.0 percent of all transactions last month, down from 30.9 percent in May and 37.6 percent a year ago, when homebuyer tax credits helped spur more move-up activity in that price range. Last month sales below $300,000 made up 38.9 percent of all transactions, up from 37.9 in May and 30.9 percent a year ago. Sales above $800,000 represented 17.0 percent of last month’s sales, up from 16.5 percent in May and 15.8 percent a year earlier.