Bay Area Home Sales Soar in January

LA JOLLA, Calif. ( DQNews)-- Bay Area home sales rose last month to the highest level for the month of January in five years, boosted by lower prices, ultra-low mortgage rates, a modestly improved economy and a record level of investor purchases.

The median price paid for a home fell year-over-year for the sixteenth consecutive month as "distressed" sales rose to the highest level since early last year, a real estate information service reported.

A total of 5,479 new and resale houses and condos sold in the nine-county Bay Area in January. That was down 26.9% from 7,494 in December, and up 10.3% from 4,966 in January 2011. The year-over-year sales increase was the seventh in a row, according to San Diego-based DataQuick.

The median price paid for all new and resale houses and condos sold in the Bay Area last month was $326,000. That was down 2.8% from a revised $335,500 in December, and down 3.6% from $338,000 in January 2011. Last month's median was the lowest since April 2009, when it was $304,000.

"While it's clear prices have edged lower in some areas recently, last month's Bay Area median of just $326,000 is a reflection of how skewed the market has become toward distressed, lower-cost properties. The higher-end sales have slowed in recent months as many struggle to qualify for loans and others just sit tight. This is also the time of year that we caution people not to try to read too much into the statistics. The winter numbers are based on a smaller pool of buyers and they haven't proved very predictive," said John Walsh, DataQuick president.

"Meanwhile, we'll be watching to see how the purchase market might be impacted by the government's recently announced efforts to help homeowners refinance, or otherwise avoid foreclosure. The federal-state settlement with five major banks reportedly calls for billions to be spent in California to help certain underwater homeowners reduce their principal or do a short sale. The state Attorney General says there are 'incentives' to ensure much of that money is spent in hard-hit counties 'within the first year.' What's not clear is the extent to which these efforts will kick in during the first half of 2012, which could alter the course of some who are on the brink of foreclosure right now."

Last month distressed property sales - the combination of foreclosure resales and "short sales" - rose to 51.9% of the Bay Area resale market. That's up from 48.5% in December and down slightly from 54.5% in January 2011.

Foreclosure resales -- homes that had been foreclosed on in the prior 12 months -- accounted for 28.0% of resales in January. That was up from a revised 27.8% in December, and down from 35.0% a year earlier. Foreclosure resales peaked at 52.0% in February 2009.

Short sales -- transactions where the sale price fell short of what was owed on the property -- made up an estimated 23.9% of Bay Area resales last month -- the highest for the current housing cycle. That was up from 20.7 % in December and up from 19.5% a year earlier.

Last month 27.4% of Bay Area sales were for $500,000 or more, down from a revised 29.6% in December, and down from 29.9% in January 2011. The number of homes sold for $500,000 or more last month fell 3.7% from January 2011, while sales under $500,000 rose 12.1% year-over-year.

Government-insured FHA home purchase loans, a popular choice among first-time buyers, accounted for 24.3% of all Bay Area home purchase mortgages in January, up from a revised 22.4% in December and down from 25.0% a year earlier.

One indicator of mortgage availability that had seen improvement last year dropped again in January, when 11.2% of the Bay Area's home purchase loans were adjustable-rate mortgages, down from a revised 11.6% in December, and down from 11.3% in January 2011. Over the last 10 years, ARMs have accounted for a monthly average of 44.0% of purchase loans. ARMs hit a low of 3.0% of loans in January 2009.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 24.8% of last month's purchase lending, down from a revised 26.5% in December, and down from 26.9% a year earlier.

Last month absentee buyers - mostly investors - purchased a record 25.4% of all Bay Area homes sold, up from 23.8% in December and 22.8% a year earlier. Absentee buyers paid a median $222,000 in January, down from $235,000 in December and $230,000 a year earlier.

Buyers who appear to have paid all cash accounted for 30.0% of January sales, up from 27.2% in December, and up from 28.7% a year earlier. The record was 30.5% last February, while the monthly average going back to 1988 is 12.2%. Cash buyers paid a median $220,000 in January, down from $225,000 in December and up slightly from $217,500 a year earlier.
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