RISMEDIA, November 10, 2010—Slower home sales following the expiration of federal tax incentives for home buyers, a tighter inventory of bank-owned and entry-level properties, and increased activity in several higher-priced markets fueled a slight increase in the median price of a home sold across the greater San Francisco Bay Area during the third quarter, according to an analysis of MLS data issued by the research division of Better Homes and Gardens Mason-McDuffie Real Estate, a member of RISMedia’s Real Estate Information Network® (RREIN).
For the nine-county Bay Area, the median price of an existing, single-family detached home rose 1% from $543,629 in the second quarter to $549,680 in the third quarter. The most recent figure was up 14% from a year ago, when the median sales price was $482,353.
According to RREIN Member Better Homes and Gardens Mason-McDuffie Real Estate, overall, Bay Area home sales fell 15% between the second and third quarters and 19% compared with the third quarter of 2009. Breaking down the decline, home sales dropped in eight of nine counties on both a quarter-to-quarter and year-over-year basis. Napa County was the lone exception: Its sales increased by 5% from the second quarter and 6% on an annualized basis.
Santa Clara County was the Bay Area’s top sales performer in the third quarter with a total of 2,725 homes changing hands, followed by Contra Costa County (2,672 sales), Alameda County (2,343 sales), Solano County (1,131 sales) and Sonoma County (1,119). Of the counties showing sales declines, San Mateo County suffered the smallest percentage decrease, with sales falling 8% for the quarter and 4% for the year.
Pent-up demand among move-up home buyers and more favorable terms on jumbo mortgages helped push home prices higher in counties with homes priced above the current $729,750 FHA loan limit for high-cost markets. This helped boost the median price slightly in five Bay Area markets for the quarter and in all nine markets compared with a year ago. Contra Costa registered the highest annualized percentage increase (+18%), followed by Alameda County (+14%), Santa Clara County (+13%), San Mateo County (+8%) and San Francisco County (+7%). Four other counties (Sonoma, Marin, Napa and Solano) had median price gains of 5% or less.
With the exception of San Francisco, Bay Area counties showed a decline in the average number of days a home was on the market before sale. Overall, homes took 12 fewer days to sell compared with last year’s third quarter. Alameda County had the shortest days-on-market figure with 38 days, while homes in Marin and Napa counties spent an average of 74 days on the market and Sonoma County listings spent 73 days.
“Looking ahead, the impact of the slowdown precipitated by the conclusion of the federal home buyer’s tax credit should lessen over time as home buyers on the sidelines recognize that interest rates are at all-time lows and home prices continue to increase,” said David Gardner, co-president of RREIN Member Better Homes and Gardens Mason-McDuffie Real Estate. On the mortgage finance front, Gardner added that many buyers may be able to benefit from a HUD/FHA 203k loan, which offers a low down payment bundled with a home renovation allowance.
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