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San Francisco Bay Area Housing Market Lost Traction in April as Sales Slipped to a 3-year Low and the Median Sales Price Fell Year-Over-Year For the 7th Straight Month

June 2011 State of the Bay Area Real Estate Market & Loans

Interest rates have recently continued their downward movement and we are now back down to an Avg Rate of 4.375% for a 30-Yr Fixed Conforming Loan with 0 Pts and 4.5% for a 30-Yr Fixed High Balance Conforming Loan with 0 Pts.  Recently, the 10-year Treasury yield fell to its lowest level since November 2010, an indication that mortgage rates will fall even further.

Meanwhile, the Bay Area Housing market lost traction in April as sales slipped to a 3-year low and the median sales price fell year-over-year for the 7th straight month.  But there were also signs that the market is continuing it’s long road back to normalcy.  The percentage of homes purchased with adjustable rate and “jumbo” loans rose, while the percentage of sales involving foreclosures and investors fell.

The Bay Area Home Sale Price median has fallen year-over-year for 7 consecutive months, following 12 straight months of year-over-year gains.  The median peaked at $665,000 in June/July 2007 and dropped to a low of $290,000 in April/2009.  For April/2011 it was $360,000.

Locally, Peninsula and South Bay residential inventory rose slightly in May, but like all of 2011 so far, no “major” movement occurred.  The same can be said for Santa Clara and San Mateo County inventory as a whole. Peninsula Residential Property Sales rose 7% in May (from April), San Mateo County Sales rose 8% in May (from April), South Bay Sales rose 12% in May, San Jose Sales rose 2%, and Santa Clara County’s May Residential Sales were dead even compared to April.

Interestingly, the Avg Sale price of $1,040,343 for a San Mateo County Single Family home was the highest for any month since July/2008.  For Santa Clara County, the Avg Sale price of a single family home in May was $773,722,  3% higher than in April and 1% higher than May/2010.
It’s clear now that 2011 is off to a slow start. So far, market forces have balanced each other out and kept Bay Area home values from appreciating this year.  But there’s still time for that to turn around. Higher job growth and/or lower home prices, coupled with low mortgage rates and consumer confidence could still push sales well above today’s subpar level, even though there will still be those who won’t buy until they’re convinced that prices have hit rock bottom and those who can’t buy because they owe more on their existing home than they’re worth.

This Bay Area Real Estate Article was published by George Sudol/Broker of Bay Area Realty Services (in Palo Alto, CA) on 6-13-11 Website: www.ba-realtyservices.com Email: george@ba-realtyservices.com

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