Despite last month’s rise in San Francisco Bay Area home sales, activity for October was at its slowest pace in 17 years, according to a report from real estate research firm DataQuick Information Systems.
A total of 5,486 new and resale houses and condos were sold in the nine-county Bay Area in October, which was up 9.4 percent from September’s 5,014 sales but down 35.7 percent from 8,532 for October a year ago, DataQuick reported.
DataQuick attributed the large year-over-year decline to market turbulence and hesitant buyers, and noted that the last time October sales were this low was in 1990 when 6,443 homes sold.
“The metro Bay Area markets — near the coast and close to the major job centers — are weathering this downturn better than the rest of the state,” DataQuick President Marshall Prentice said in a statement. “We’re finding that higher-priced areas are not seeing the price declines we’re seeing in the more affordable areas that absorbed spillover activity during the frenzy two years ago. Much of today’s slow sales pace in the Bay Area is due to turmoil in the jumbo mortgage market.”
While there is always a seasonal decline in sales from summer to fall, home purchases that were financed with mortgages for more than $417,000, so-called “jumbos,” have dropped in half, DataQuick reported, while homes purchased with conforming loans have increased 12 percent.
According to the report, the median price paid for a Bay Area home was $631,000 last month, up 1 percent from $625,000 in September, and up 2.4 percent from $616,000 for October last year. The median peaked at $665,000 last June and July.
The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $3,000 last month, up from $2,974 the previous month, and up from $2,911 a year ago. Adjusted for inflation, current payments are 15.4 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 9.1 percent below the current cycle’s peak in June last year.
Indicators of market distress continue to move in different directions, DataQuick noted. Foreclosure activity in the area is at record levels and financing with adjustable-rate mortgages and with multiple mortgages has dropped sharply. Down-payment sizes and flipping rates are stable, and non-owner-occupied buying activity is edging up, the report found.