SF Bay Area leading California’s accelerating housing recovery


They don’t call them the Golden State and the Golden Gate for nothing.

California is often the mother lode in any national housing recovery and the San Francisco Bay Area – with Silicon Valley’s high-tech job engine – typically leads the state.

This housing recovery is no different.

In December 2012, the median price paid for all homes (new and resale houses and condos) sold in California jumped 21.5 percent from a year ago to $299,000, the highest since it was $301,000 in August 2008, according to San Diego-based DataQuick.

December was the 10th consecutive month of year-over-year of median home price increases for the Golden State.

California’s home prices, as tracked by DataQuick, last peaked at $484,000 in the March/April/May period of 2007. The last low point was $221,000 in April of 2009, says DataQuick.

Bay Area boost

A big boost in the state’s housing market is coming from the nine-county San Francisco Bay Area, including Silicon Valley, as the area moves faster than the state to make up for lost ground.

The median price paid for a home in the Bay Area was $442,750 in December 2012, up a whopping 32 percent from a year ago – the largest year-over-year increase in the Bay Area’s median price since 1988, when DataQuick first tracked the area.

In December, the area’s median price rose at its fastest pace in more than 25 years and was the highest since August 2008, when it was $447,000.

The highest-ever median home price in the Bay Area was $665,000 in June/July 2007 and then fell to a low of $290,000 in March 2009, according to DataQuick.

Year-over-year, Bay Area home prices dropped more than 30 percent each month from August 2008 through May 2009. At the current recovery rate, the Bay Area’s housing market should have recovered half its losses since the summer of 2007 peak.

“Prices are in the midst of bouncing off bottom right now, and nobody really knows what the trajectory of this bounce will be beyond this point. So far, supply has been a bottleneck, but as prices go up, more homes will be put up for sale,” said John Walsh, DataQuick president.

The Bay Area’s housing market remains constrained by a limited supply of homes for sale and tight underwriting.

DataQuick also said, at least half the median home price increase is due to a market mix change with more sales in the mid-market and move-up homes and less sales of lower-cost and distressed homes.

“Another bottleneck these days is that mortgage lenders are swamped. Not only by homebuyers, but by homeowners who want to refinance. Rising home prices also mean higher appraisals, and tens of thousands of homeowners who couldn’t refinance half a year ago, now can,” Walsh said.

California dreamin’

Statewide, California’s 39,760 home sales were up 5.4 percent from a year ago, according to DataQuick.

“A rush to complete sales of higher-priced homes by the end of the year to avoid an expected increase in capital gains due to the ‘fiscal cliff’ pushed up sales of homes priced $500,000 and above by nearly 42 percent from December 2011,” said California Association of Realtors President Don Faught.

December sales in California have varied from a low of 25,585 in 2007 to a high of 66,503 in 2003, according to DataQuick.

December’s sales were only 9.4 percent below the average of 43,891 sales for all months of December since 1988, when DataQuick’s statistics begin.

Of California’s existing homes sold in December, 15.5 percent were forecloses, more than half fewer than 33.9 percent a year earlier.

California’s December foreclosure resales figure was the lowest for any month since foreclosure resales accounted for 15.3 percent of the resale market in October 2007. Foreclosure resales peaked at 58.8 percent in February 2009.

Short sales now comprise a larger share of the state’s market, an estimated 25.3 percent of the homes, almost equal to the 25.5 percent share a year earlier, according to DataQuick.

“With sales in the higher-end market remaining strong throughout the year, the price gain at the state level surpassed our expectations, increasing 11.6 percent from $286,040 in 2011 to a preliminary $319,340 in 2012,” said CAR Vice President and Chief Economist Leslie Appleton-Young.

CAR said for single-family resale homes only, the state’s big home price gain leaders for the year, by major metro areas, were Santa Barbara 41.2 percent (the largest metro area gain); San Mateo County (SF Bay Area), 30.3 percent; Santa Clara County (SF Bay Area), 27.3 percent; Monterey County, 26 percent; Riverside County, 23.5 percent; San Bernardino, 23.4 percent; Contra Costa County (SF Bay Area), 22.9 percent; San Francisco (SF Bay Area), 22.3 percent; and Orange County at 20.3 percent.

Hard hit Central Valley cities also revealed major comebacks with the largest year-over-year home price gains in San Benito, 40.6 percent; Madera, 36.1 percent and Sacramento, 21.9 percent, according to CAR.

SF Bay Area details

When DataQuick looked at price gains for all types of homes (new and resale houses and condos), in the nine county Bay Area, price gain leaders were Contra Costa County, 28.8 percent; Marin County, 27.6 percent; Alameda County, 25 percent; Santa Clara County (Silicon Valley), 23.8 percent; Sonoma County, 23.4 percent and San Francisco County (and city), 21.1.

DataQuick also said the Bay Area’s distressed property sales – foreclosures and short sales – comprised 34.2 percent of the resale market, down from 52.4 percent a year ago.

Foreclosures were 11.8 percent of Bay Area resales in December, down from 27.8 percent a year ago. Short sales were 22.4 percent of Bay Area resales last month, down from 24.6 percent a year earlier.

Heavy hitters were investors and all-cash buyers who purchased more than 55 percent of the homes sold in the Bay Area in December, DataQuick reported.

Absentee buyers, primarily investors, purchased 25.8 percent of all Bay Area homes, an all-time high, back to January 1999 and up from 23.8 percent a year ago. Absentee buyers paid a median $315,000 in December, up 34.0 percent from $235,000 a year earlier.

All cash buyers accounted for 29.3 percent of sales in December, up from 27.3 percent a year ago. The monthly average going back to 1988 is 12.5 percent. The Bay Area’s cash buyers paid a median $312,500 in December, up 36.2 percent from $229,500 a year earlier.

MLSListings.com data

Get the latest MLSListings.com home prices and sales report on the five-county, South San Francisco Bay Area-to-Monterey, CA (SSFBAM) region, which includes San Mateo, Santa Clara, San Benito, Santa Cruz and Monterey counties.

Click the chart below to enlarge the SSFBAM region’s home prices and sales chart for December.

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