San Francisco Bay Area Home Sales Report

    San Francisco Bay Area Home Sales Report

    Apr 02, 2019

    Bay Area Home Sales Lowest in 11 Years Again in February but Annual Decline Eases; Regional Median Sale Price Edges Up but Annual Gain Falls Below 3 Percent for Second Straight Month

    New data released today by CoreLogic® shows a total of 4,354 new and existing houses and condominiums were sold in Alameda, Contra Costa, Marin, Napa, Santa Clara, San Francisco, San Mateo, Solano and Sonoma counties in February 2019. This number is up 12.9 percent month over month from 3,855 sales in January 2019,* and down 12.8 percent year over year from 4,993 sales in February 2018.

    Total February 2019 home sales in the San Francisco Bay Area were the lowest for that month in 11 years, since 3,989 homes were sold in February 2008. Sales have fallen on a year-over-year basis the past nine consecutive months.

     

    Since 1988, the average change in San Francisco Bay Area home sales between January and February is a gain of 3.1 percent. February sales have ranged from a low of 3,989 in 2008, to a high of 8,901 in 2002. February 2019 sales were 27.5 percent below the February average of 6,008.

    In February 2019, sales of newly built homes (detached houses and condos combined) were 43.9 percent below the month’s historical average, while resales were 25.3 percent below the month’s average. Ignoring the 2003–2006 housing boom that was fueled by risky home loans, February 2019 resales were 22 percent below the long-term average for the month. 

    “For the third month in a row, Bay Area home sales were at an 11-year low for that month,” said Andrew LePage, a CoreLogic analyst. “However, the year-over-year decline in sales has ratcheted down the past two months, from a nearly 22 percent annual drop last December to a decline of just under 13 percent last month. The lessening of the declines likely reflects, among other things, a significant drop in mortgage rates since they hit a seven-year high last November, as well as more listings compared with early last year and an improving stock market in early 2019. Those factors are likely putting some would-be buyers back into home-shopping mode. This includes people who stepped to the sidelines last year either because they had been priced out by higher rates and prices or because they felt the housing market was near a peak and it could pay to wait.”

    The median price paid for all homes sold in the San Francisco Bay Area in February 2019 was $770,000, up 5.5 percent from $730,000 in January 2019 and up 2.7 percent from $750,000 in February 2018. The annual gain for the February 2019 median marked the second lowest increase—behind January’s 2.2 percent gain—since the median rose 1.3 percent in January 2017. On a year-over-year basis, the median sale price has risen for 83 consecutive months (since April 2012). Those gains have been in the single digits each month since September 2018. Both May and June 2018 had the highest ever median sale price: $875,000.

    “Last month’s 2.7 percent annual increase in the regional median sale price was the second lowest in two years, behind a 2.2 percent gain this January,” LePage said. “The lower gains, which compare with a nearly 13 percent increase in the median in February 2018, reflect a much slower sales pace, higher inventory and a psychological shift among some would-be buyers who feel less of a sense of urgency. Four of the region’s nine counties—Napa, Santa Clara, San Mateo and Sonoma—posted year-over-year declines in their median sale prices last month. Those declines likely reflect a combination of a slower market and a rise in buyers’ negotiating power, as well as changes in market mix in some areas, where sales in higher-end communities represent a lower share of all activity.” 

    Home sales of $500,000 or more accounted for 76 percent of all sales in February 2019, up from 73.7 percent in January 2019 and up from 74.8 percent in February 2018. 

    Additional San Francisco Bay Area Highlights for February 2019: 

    ►Absentee buyers—mostly investors, but also second-home buyers—bought 19.5 percent of all homes sold in February 2019. This is up from 17.6 percent in January 2019, and down from 21.6 percent in February 2018. The absentee buyer share peaked at 28.8 percent in February 2013, and since 2000, the monthly average has been 16.5 percent. 

    ►Jumbo mortgages accounted for 28.7 percent of the total number of home purchase loans used in the San Francisco Bay Area in February 2019, down from 30.8 percent in January 2019 and down from 33.8 percent in February 2018.

     

    ►Jumbo loans represented 54.2 percent of the total dollar volume of all home purchase originations in February 2019, up from 51.7 percent in January 2019 and down from 55.7 percent in February 2018. 

    ►Jumbo loans are those that exceed the “conforming loan limit,” which is regulated and varies by county. Nationally, the base conforming loan limit for single-family homes in 2019 is $484,350, up from $453,100 in 2018. In high-cost areas, including most of the San Francisco Bay Area, the limit is now $726,525, up from the 2018 maximum of $679,650. 

    ►Adjustable-rate mortgages (ARMs) made up 22.4 percent of the number of purchase loans used to buy homes in the Bay Area in February 2019. This is up from 22.1 percent in January 2019 and up from 20.7 percent in February 2018. ARMs, which offer lower initial interest rates and monthly payments compared with fixed-rate mortgages, are more common in the middle and high-end of the market where the impact on monthly payments is larger. In February 2019, the median price paid for Bay Area homes purchased with ARMs was $1,135,500, compared with a median of $770,000 for all homes purchased. The ARM share ranged from 3.8 percent of purchase loans in Solano County to 35 percent in Santa Clara County. 

    ►Real estate-owned (REO) sales represented 1 percent of total San Francisco Bay Area home sales in February 2019, unchanged from January 2019 and down from 1.3 percent in February 2018. REOs are foreclosed homes that lenders sold on the open market. 

    * When necessary, January 2019 data was revised. Revisions are standard, and to ensure accuracy CoreLogic incorporates newly released data to provide updated results. 

    DATA BRIEF

    corelogic.com CONTACT: newsmedia@corelogic.com February 2019

    For more CoreLogic® housing economy insights, visit corelogic.com/insights. For CoreLogic configurable real estate data reports visit corelogic.com/solutions/configurable-real-estate-data-reports.aspx

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