Home sales dropped 24 percent in the San Francisco Bay Area in June compared to June 2005, and were down 17.5 percent in Southern California during the same period, according to real estate research company DataQuick Information Systems.
Bay Area prices increased at their slowest pace in more than three years, DataQuick reported, with prices up 5.6 percent in June compared to June 2005.
Price appreciation slowed in Southern California, too, and a decline in median price was reported in San Diego County in June 2006 compared to June 2005.
A total of 9,892 new and resale houses and condos were sold in the nine-county Bay Area region last month, which was up 9.1 percent from May but down 24 percent from 13,014 from June 2005.
The year-over-year decline for June was the 15th in a row. The average June sales count since 1988 is 9,840.
“The market is definitely slowing but can only be considered ‘slow’ when compared to the hot market of 2004 and 2005. In reality, today’s market is pretty normal and balanced, right between the grim times of 1993 to 1995 and the frenzies of 1999 and 2004-2005. The Bay Area’s market is reaching the end of a real estate cycle. It looks like prices could flatten out sometime this fall. What happens after that is anyone’s guess,” said Marshall Prentice, DataQuick president, in a statement.
The median price paid for a Bay Area home was $644,000 last month, the third record in a row. That was up 2.1 percent from May’s $631,000 and up 5.6 percent from $610,000 for June a year ago. Last month’s year-over-year increase was the lowest since May 2003 when the $427,000 median was up 3.4 percent, DataQuick reported.
Sales dropped 36.2 percent in Solano County in June compared to June 2005, while dropping 31.6 percent in Sonoma County and 28 percent in Contra Costa County. San Mateo had the slowest price appreciation from June 2005 to June 2006, at 0.9 percent, while Solano County had the highest rate at 7.3 percent.
The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $3,183 in June. That was up from $3,091 in May, and up from $2,651 for June a year ago. Adjusted for inflation, mortgage payments are 25 percent higher than they were at the peak of the prior cycle 16 years ago.
The use of adjustable-rate mortgages has decreased the last half-year, and foreclosure rates are creeping up but still below normal levels while “down payment sizes are stable and there have been no significant shifts in market mix,” DataQuick reported.
Southern California home prices climbed to a new peak in June but hit the slowest pace in more than six years.
The median price paid for a home in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties was a record $493,000 last month. That was up 1.6 percent from May and up 6 percent from $465,000 in June of last year, according to DataQuick Information Systems.
Last month’s 6 percent annual increase in the median price was the smallest since May 2000 when the $203,000 median rose 5.7 percent from $192,000 a year earlier. Recent trends suggest the median could set more records this summer but likely at an even slower rate of appreciation, according to DataQuick.
“Many view this as a great conundrum: Prices continue to rise, even set records, as sales continue to slow. It happened for two yearsin San Diego before prices last month finally fell slightly below year-ago levels. We view this as the normal winding down of a real estate cycle, where declining demand gradually erodes price growth until it halts or reverses. We expect more markets to see prices flatten or decline a bit in the second half of this year,” Prentice said.
A total of 29,237 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month, which was up 7.2 percent from 27,286 sales the month before but down 17.5 percent from 35,454 in June 2005. Sales have declined for seven consecutive months on a year-over-year basis.
Sales dropped 32.3 percent in Ventura County from June 2005 to June 2006 while falling 26.3 percent in Orange County and 24.1 percent in San Diego County. Median sale prices fell 1 percent in San Diego County from June 2005 to June 2006 while rising 14 percent in San Bernardino County.
Last month’s 29,237 sales were the lowest for a June since 1999, when 29,076 homes sold, but still surpassed the June average of 26,608 going back to 1988. The strongest June was in 2005, when 35,454 homes sold, while the weakest was in 1992, with 16,335 sales, according to DataQuick.
The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,437 last month, up from $2,376 for the previous month and up from $2,021 for June 2005. Adjusted for inflation, current payments are about 8.4 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle.
Down-payment sizes are stable, as are flipping rates and non-owner occupied buying activity, DataQuick reported.