Last month, California's Bay Area home sales were the slowest for a December in six years – the result of a constrained supply of homes for sale, according to a report by DataQuick.
Prices continued to rise on a year-over-year basis, although at a slower pace than earlier in 2013, DataQuick reports.
Indicators of market distress continue to decline, and foreclosure activity remains well below year-ago and far below peak levels. Financing with multiple mortgages is very low, and down payment sizes are stable, according to the company.
A total of 6,714 new and resale houses and condos sold in the nine-county Bay Area last month – the lowest for any December since 2007, when 5,065 homes sold, says DataQuick. Last month's sales were up 0.8% from November, and down 12.7% from December 2012, according to the report. They were 21.3% below the December average of 8,529 since 1988, when DataQuick's statistics began.
The median price paid for a home in the Bay Area last month was $548,500, which was 0.3% lower than in November, and 23.9% above $442,750 for December 2012. While the median has been at roughly the current level since last summer, it has increased year-over-year for 21 consecutive months, says DataQuick.
The Bay Area median peaked at $665,000 in June and July 2007 then dropped to a low of $290,000 in March 2009. While much of the median's ups and downs in recent years can be attributed to shifts in the types of homes sold, it now appears most of the current year-over-year gain reflects a rise in home values, according to the company.
For 14 consecutive months, DataQuick reports that the Bay Area median has risen more than 20% on a year-over-year basis.
"If current trends hold, including year-over-year price appreciation of 20-plus percent, the typical home would be selling for $50,000 to $60,000 more by spring – perhaps twice that at the upper end of the market," comments John Walsh, president of DataQuick.
"That could loosen up quite a bit of inventory. The question, then, is how much of the pent-up demand that accumulated during the down years is still there?" he continues. "An additional issue is the fussy mortgage market, although things are moving in the right direction there, slowly."
DataQuick also reports that adjustable-rate mortgages (ARMs) accounted for 22% of the Bay Area's home purchase loans in December – the highest since 25.4% in July 2008. ARMs hit a low of 3.0% of loans in January 2009. Since 2000, ARMs have accounted for 47.2% of all Bay Area purchase loans.
Jumbo loans accounted for 49.2% of last month's purchase lending – up from 40.1% a year ago. Before the credit crunch hit in August 2007, jumbos accounted for more than 60% of Bay Area purchase loans, according to the report.
Federal Housing Administration (FHA) home purchase loans accounted for 11.3% of all Bay Area home purchase mortgages in December – up from 10.4% in November and down from 13.8% a year earlier.
Last month, the number of homes that sold for less than $500,000 dropped 28.9% year-over-year, while the number that sold for more increased 12.3%, DataQuick reports.
Distressed property sales – the combination of foreclosure resales and short sales – made up about 15.0% of the resale market last month – up from 13.2% the prior month and down from 35.7 % a year earlier.
In December, Bay Area home buyers put $1.72 billion of their own money on the table in the form of a down payment or as an outright cash purchase. That number hit an all-time high of $2.64 billion last May, says DataQuick. They borrowed $2.56 billion last month in mortgage money from lenders.