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Greater Bay Area Market Report |
 W hile the economy seems to have hit a plateau,
the housing sector is showing weak, but palpable signs of improvement despite
considerable obstacles posed by the lending industry.
Explains Lawrence
Yun, chief economist for the National Association of REALTORS®, “The underlying
factors for improving sales are developing, such as rising rents, record high
affordability conditions and investors buying real estate as a future inflation
hedge.”
In July 2011, housing sales were a seasonally
adjusted 4.67 million units, 21.0 percent higher than they were a year ago at
3.86 million units, when homebuyers pulled sales forward to qualify for federal
tax credits expiring June 1, 2010.
Affordability conditions, says Yun, are the “most favorable on record dating back to 1970,” but that’s
not enough for housing to recover.
Many buyers are being held back because banks are offering
financing to only the most highly qualified borrowers, says Yun, ignoring a
large share of otherwise creditworthy buyers. “Those potential buyers represent
the difference between an uneven recovery and a much more robust housing market
that could stimulate additional economic activity and create jobs,” says Yun.
Pending sales in July slipped lower from June, but are 14.4
percent higher than a year ago, despite stricter lending standards.
In a
recent speech at Jackson Hole, Wyo., Federal Reserve Board Chairman Ben
Bernanke expressed concern that housing is underperforming, due to tight credit
conditions for both buyers and builders, warning of a vicious circle of “lower
household net worth, leading to more cautious lending to households, which in
turn reduces housing demand, lowers prices and reduces household net worth.”
Yet he said that over the medium term, “…housing activity will stabilize and
begin to grow again, if for no other reason than that ongoing population growth
and household formation will ultimately demand it."
The recovery is already taking place in housing prices, if not in transaction
volume quite yet. According to two indexes, the Case-Shiller Index and The
Federal Housing Finance Agency, housing prices have risen for three consecutive
months as of June 2011.
Economists
at The National Association of Home Builders said, “the
recent improvement in house prices in the second quarter is a positive sign for
housing demand going forward. We do not expect any further declines in house
prices over the remainder of 2011, and anticipate house prices will begin to
show modest growth through 2012. This improving outlook for house prices should
help to restore consumer confidence in housing and support a more definitive
recovery in the housing demand.”
California and the Greater
Bay Area
Like
the rest of the nation, California housing sales in July 2011 were higher than
a year ago, up 4.5 percent year-over-year, while pending sales declined
month-to-month but were 4.9% higher than a year ago.
The
California Association of REALTORS® said that prices are still being impacted
by high foreclosures, down 7.6 percent to a median $294,230 in July 2011 from
$318,550 in July 2010. Distressed homes
still make up more than half the market, says DataQuick, a housing sales
tracking service. Over one-third of homes sold in California in July were
foreclosures, while short sales made up another 17.3%.
The
good news here is that distressed homes are declining, from 35.2 percent of the
market in foreclosures and 18.6 percent in short sales in July 2010.
In
the Greater Bay Area, the median priced home sold was $374,000, down 7 percent
from July 2010, but the second highest median achieved of the year.
There’s
no doubt it’s an unusual market, with price leading transaction volume, instead
of the other way around, but until the lending industry returns to more normal
lending standards, the backward/forward pull and tug on the market will
continue, say economists.
Local Sales Trends – August 2011
MLSListings August 2011
County Indicators Report, based on performance in Monterey, Santa Clara, San
Mateo, San Benito and Santa Cruz counties, shows some encouraging signs for
market stabilization.
Compared to the same month
last year, sales were up by noteworthy amounts in most counties, while inventory
fell by around the same margin, as did the number of new listings. Median price
has dropped over the last year by between 3 and 10 percent; while days on
market have dramatically increased in some counties, and significantly dropped
in others.
This month’s report also
provides some interesting context, comparing current year-over-year data with
previous years’ information. Beginning this month we are also providing data
and statistics for the San Francisco market as well as listings posted to
MLSListings’ database from the San Joaquin, Stanislaus and Merced counties.
Closed Sales – Single Family
Compared to the same month last year,
sales increased in all Home Counties except in Monterey County where they were
down a slight 2%. Closed Sales were up 52% in San Benito County, up 15%
in Santa Clara County, and up 9% in both Santa Cruz and San Mateo
Counties.
Unlike
last year, there was an overall increase in closed sales from July to August
for the five Home Counties. Compared to last month, Santa Cruz County Sales
were up 33%, Santa Clara up 11%, Monterey County up 5%, San Mateo County up 4%,
and San Benito showed the only drop at 18%.
The
following chart shows the largest number of Closed Sales in the Home Counties
for the month of August beginning in 2004. The comparison at the bottom shows
the percentage difference between 2011 vs. 2004. (Numbers highlighted are
the largest data point in that range).
Inventory
Compared to the same month last year,
Inventory was down in all Home Counties. Santa Clara County showed the
largest drop at 17%, followed by San Mateo County with a drop of 12%. Monterey
County inventory was down 11%, Santa Cruz down 8%, and San Benito down only 1%.
This will be an important trend to watch especially since new listings are also
on the decline.
Compared
to last month, there were slight fluctuations in Inventory in the five Home
Counties. San Benito County inventory was up 6%, with Monterey County up just
2%. Santa Clara County was down 3%, San Mateo County down 2%, and Santa Cruz
down just 1%.
The
following chart shows the highest inventory in the Home Counties for the month
of August beginning in 2004. The comparison at the bottom shows the percentage
difference between 2011 vs. 2004. (Numbers highlighted are the largest data
point in that range).
New Listings
Compared to the same month last year,
New Listings were down in all of the five Home Counties. Santa Clara County
showed the largest drop at 20%, San Benito County followed at 14%, Santa Cruz
County was down 9%, Monterey down 5%, and San Mateo County down just 2%.
Compared
to last month, New Listings were down 10% in Santa Clara County, down 6% in
Santa Cruz County, and down 1% in San Benito County. New Listings were up
11% in Monterey County, and up 8% in San Mateo County.
The
following chart shows the largest number of New Listings in the Home Counties
for the month of August beginning in 2004. The comparison at the bottom shows
the percentage difference between 2011 vs. 2004. (Numbers highlighted are the
largest data point in that range).
Median Price
Compared to
the same month last year, there was a drop in Median Price in all five Home
Counties. San Benito County Median Price dropped 10%, Santa Cruz County
dropped 6%, both San Mateo and Santa Clara Counties dropped 5%, and Monterey
County dropped 3%.
Compared to
last month, Santa Cruz County Median Price was up 7%, San Benito was up 3%, and
both San Mateo and Monterey Counties were up just 1%. Santa Clara County showed
a 2% drop from last month.
The
following chart shows the highest Median Price level in the Home Counties for
the month of August beginning in 2004. The comparison at the bottom shows the
percentage difference between 2011 vs. 2004. (Numbers highlighted are the
largest data point in that range).
Days on Market
Compared to the same month last year,
Days on Market increased 40% in Monterey County, 29% in Santa Cruz County, and
19% in Santa Clara County. Days on Market dropped 26% in San Benito County, and
5% in San Mateo County.
Compared
to last month, Santa Cruz Days on Market increased 7%, but dropped 9% in San
Benito County, 8% in San Mateo County 3% in Santa Clara County, and 2% in
Monterey County.
Merced, Stanislaus, and San Joaquin Counties – Single Family
Merced, Stanislaus, and San Joaquin
County data have been combined into one set of data (Aug 2009 – Aug 2011).
The
number of properties for sale in the Three County Area was down 53% in August,
and the number of sold properties was down 63%. The largest number of Closed
Sales for the two-year period occurred in September 2009 at 63, August 2011
showed 20 sales. New listings were down 55% at 43. The largest number of new
listings occurred in March of 2010 at 114. Properties under contract
dropped 32%. Days on Market were up 119%, and Median Price dropped 24%.
Central Valley market data is based on listing activity for MLSListings
subscribers only, for the Three County areas.
San Francisco, Districts 1 – 10, Single Family ( Aug 2009 –
Aug 2011)
The number of properties for sale
remained flat from August of 2009. The number of sold properties is relatively
consistent, but was down 13% this August compared to August of 2009.
There were 212 sales in August 2009, 203 in August of 2010, and 185 in August
2011. New listings were up 10% at 255, and properties under contract were up
17% at 244. Median Price remained flat and was $699,500 in August 2009, just
under 720,000 in August of 2010, and came in at 702,250 for August 2011. Days
on Market are down substantially at 25%. There is roughly 2.1 months of
inventory, which has decreased 22% from August 2009.
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