The median home price in Southern California plunged 10.3 percent while sales fell 42.7 percent in November compared to the same month last year, real estate data company DataQuick Information Systems reported this week. Home sales in the San Francisco Bay Area dropped 36.2 percent from November 2006 to November 2007.
The sales totals for both regions were the slowest on record for the month of November in the history of DataQuick’s statistics, which date back to 1988, and the year-over-year price drop in the Southern California area also set a record.
San Francisco-area sales, which cover a nine-county region, have declined on a year-over-year basis for 34 consecutive months, DataQuick reported. The company tracks sales and prices for new and resale houses and condos.
Housing starts in the state, meanwhile, dropped 44.6 percent in November compared to the same month last year, while January-November starts were down 31.5 percent compared to the same period last year, according to a separate report by the California Building Industry Association.
DataQuick reported that sales fell from 23,005 in November 2006 to 13,173 in November 2007 for the six-county Southern California region, while the median price dropped from $485,000 to $435,000.
Riverside and San Bernardino counties suffered the steepest price drops among Southern California counties. The median price in Riverside County fell 16.5 percent from November 2006 to November 2007, while the median price tumbled 13.2 percent in San Bernardino. San Bernardino led Southern California counties with a 48.1 percent year-over-year sales drop in November, followed by Los Angeles County with a 46 percent drop. The other four counties in the Southern California region also experienced year-over-year price drops.
“Some might point to the October-to-November increase as evidence sales have bottomed out,” said Marshall Prentice, DataQuick president, in a statement, “but we’ll need to see a sustained trend. We also saw November sales rise a bit back in the troubled market of 1994, well before it hit bottom. It’s worth noting, though, that sales financed with conforming loans have increased each month since September, and last month we saw signs that the jumbo loan problem, while unresolved, wasn’t worsening.”
The number of home purchases financed with conforming loans in Southern California dropped 31.2 percent in November compared to the same month last year, and sales financed by jumbo loans dropped 69.3 percent. Prior to the credit crunch, which ballooned in August, about 40 percent of Southern California home buyers used jumbo loans to finance their purchase, while in November that share shrunk to 22 percent.
The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,064 last month, down from $2,111 the previous month, and down from $2,255 a year ago. Adjusted for inflation, the current payment is 6.2 percent lower than the spring of 1989, the peak of the prior real estate cycle. It is 17.7 percent below the current cycle’s peak in June last year.
In the San Francisco Bay Area, Solano County had the steepest year-over-year median price drop in November, at 14.8 percent, followed by Sonoma County, down 12.1 percent. The median price fell in five Bay Area counties while rising in four counties. The median price increased 7.2 percent in San Francisco in November compared to November 2006, and rose 4.1 percent in San Mateo. The median price for the nine-county area rose 1.5 percent year-over-year in November.
“This fall’s sharp decline in jumbo-loan financing continued to weigh heavily on Bay Area home sales, though we do see evidence the problem has stabilized. The percent of all transactions financed with jumbo mortgages increased slightly in November for the first time since the credit crunch hit in August. We expect sales to pick up at least modestly as the price and availability of jumbo loans improves,” Prentice stated.
DataQuick reported that 44.1 percent of all Bay Area home purchases were financed with jumbo loans in November. The number of jumbo-loan purchases dropped 58 percent in November compared to the same month last year, and jumbo loans accounted for 62 percent of all Bay Area home purchases for the first seven months of this year — prior to the nationwide credit crunch.
The number of Bay Area homes purchased with conforming loans dropped 12 percent in November compared to the same month last year.
The typical monthly mortgage amount that Bay Area buyers committed themselves to paying in November was $2,964, compared with $2,883 in 2006. Current payments are about 13.3 percent above typical payments at the peak of the last housing-market cycle, in spring 1989, DataQuick reported, and are 10.7 below the June 2006 peak of the current market cycle.
Foreclosure activity is at record levels in both the San Francisco and Southern California regions, DataQuick reported. “Down-payment sizes and flipping rates are stable,” the company also reported, while financing with adjustable-rate mortgages and multiple mortgages has dropped.
An estimated 24 percent of households in California could afford to purchase an entry-level home in California during the third quarter of 2007, which is flat compared to the same quarter last year, the California Association of Realtors reported.
The California Building Industry Association, citing statistics compiled by the state’s Construction Industry Research Board, reported that total building permits issued fell from 153,392 in January-November 2006 to 105,002 for the same period this year.
Among those markets with over 100 building permits issued in November, the Riverside-San Bernardino metro area suffered the steepest year-over-year decline for the January-November period, at 48.1 percent. That market was followed by the Bakersfield area, down 39.5 percent; Oakland-Fremont-Hayward, down 37.7 percent; San Diego-Carlsbad-San Marcos, down 36.2 percent; and San Luis Obispo-Paso Robles, down 31.6 percent.
The Fresno metro area, meanwhile, experienced a 12.3 percent year-over-year gain in housing starts during the January-November period.
Among those markets with more than 100 building permits issued in November, the Riverside-San Bernardino market area had the highest year-over-year decline for the month of November compared to the same month last year, at 76.4 percent. That area was followed by the San Jose area, with a 65.4 percent decline; Visalia-Porterville, down 61.5 percent; San Diego, down 60.9 percent; and Los Angeles, down 51 percent.
Meanwhile, the Santa Ana-Anaheim-Irvine market saw a 75.2 percent gain in building permits issued in November compared to November 2006; Fresno was up 35.9 percent; San Luis Obispo-Paso Robles was up 35.1 percent; Sacramento was up 25 percent; San Francisco was up 23 percent; and Santa Rosa was up 10.2 percent.