Silicon Valley home sales plunge, but median price edges higher

By Frank Michael Russell, San Jose Mercury News

frussell@mercurynews.com

Posted: 11/18/2010 09:47:09 AM PST

Updated: 11/18/2010 12:33:50 PM PST

Home sales in Silicon Valley plunged in October from a year earlier, but the median price for a resale house in Santa Clara County was up 2.3 percent to $562,500, MDA DataQuick reported this morning.

The number of single-family homes that changed hands in October was down 27.3 percent to 1,303, the San Diego real estate research firm reported in an e-mail. The drop in Santa Clara County reflected the market throughout the Bay Area, where sales for an October were at their second-slowest pace in more than two decades.

"Part of what we're seeing is the hangover effect from the expired homebuyer tax credits, which spurred many to buy in the first half of the year. But that effect is fading," DataQuick President John Walsh said in the news release.

"Now the real hurdles to more normal sales levels are the lack of meaningful job growth and the concerns many potential buyers have about job security and the overall economy. It's why ultralow mortgage rates, alone, haven't turned things around," Walsh said.

Resale condo sales were down 25.9 percent from a year earlier in Santa Clara County, and the median price dropped 4.5 percent to $320,000.

For all homes -- new and resale, houses and condos -- sales in the valley dropped 29.3 percent. The median price was up 0.5 percent to $502,500.

For all transactions throughout the Bay Area, sales were down 22.8 percent, and the median price dropped 1.8 percent to $383,000.

California's Home Inventory Shrinks to a 5-Year Low

By JIM CARLTON

SAN FRANCISCO—California's inventory of unsold, previously owned homes shrank to a five-year low in December, in another sign that the state may be coming out of its worst housing slump in decades.

The supply of unsold single-family homes dropped to 3.8 months from 5.6 months a year ago and 16.6 months in January 2008, when inventories were at a peak, according to estimates released Friday by the California Association of Realtors. The inventory levels are now at their lowest level since 2005, resulting in frenzied sales with multiple offers in some cities.

In Northern California's Santa Clara County, where inventory has dropped to 50 days from 243 a year ago, Amanda Garcia said she and her 62-year-old father Luis Garcia finally gave up a nine-month search for a home last month, after they kept losing out on homes priced in the highly competitive sub-$500,000 market.

"It's more like an auction nowadays," said Ms. Garcia, 26, a medical coordinator from Milpitas, Calif. "They shouldn't call it a house sale."

California's housing market is closely watched because it is the nation's biggest and helps fuel both the state's economy and the national building industry. With California still weighed down by economic problems, including a 12.4% unemployment rate, higher than the 10% rate nationwide, economists are looking at bellwethers like housing to determine when California will rebound.

Of course, any long-term revival in housing will depend on California's ability to shake off its high unemployment and the continuing threat of more foreclosures. Some housing experts cautioned that inventories may be artificially low because many would-be sellers are waiting for the economy to improve before putting their homes on the market.

"I'm convinced that once the general public believes prices have bottomed out and are coming up, more people will put their homes on the market," said Andrew LePage, an analyst at MDA DataQuick, a housing-data provider in La Jolla, Calif. "And that will probably coincide with the economy and job market improving."

Although most home prices remain well below their pre-bust highs of three years ago, California's overall housing market has shown signs of stabilizing since early last year. The median price of an existing, single-family home rose 8.4% from a year ago to $306,820, marking the second consecutive year-over-year increase and the 10th straight month-over-month jump, according to estimates by the state Realtors' association.

Sales rose at a slower year-over-year rate of 1.7%, compared with double-digit gains in recent months. Sales have been powered, in part, by a federal tax credit of $8,000 for first-time buyers, which Congress extended until the end of April.

Some brokers attributed the sales slowdown to lean inventories. "Right now, we need more listings," said Lianne Pinkston, a Coldwell Banker broker in Morgan Hill, Calif., south of San Jose. "I have an all-cash investor, and they've wanted to buy a duplex or four-plex, and they've been making all-cash offers for over the asking price, and they're still not getting anything."

The current inventory rate is running well under California's historical average since the 1980s of about an eight-month supply of existing homes on the market. That's partly because a once huge supply of foreclosures in the state has dwindled. In November, foreclosed properties accounted for 40% of all single-family sales, new and used, in California, compared with 58% in January, according to the most recent estimates by Zillow.com, a market tracker.

In general, California's coastal markets performed better than inland markets. In Orange County, for example, Zillow estimates foreclosures dropped by more than one half to 20.6% of all single-family sales in November from 43.5% in January. In inland Merced County, foreclosures were also down, but to 69.9% of sales from 83.4% in January, according to Zillow.

The return to the kind of bidding wars that marked the state's boom years in some coastal cities hasn't been welcomed by home buyers. In Orange County, graphics designer Scott Butler put in one of 37 offers on a three-bedroom, two-bath home listed for $350,000 in early September. Mr. Butler bid full price for the home in Mission Viejo, Calif., and offered to put 20% down, but the winning bid went over $430,000, said his agent, Michael Caruso.

Mr. Butler, 39, who has since given up his search, said he was outbid on more than 20 other homes since early 2009. "It's very discouraging," he said.

Write to Jim Carlton at jim.carlton@wsj.com

December sales and price report

California Association of Realtors
For release:
Friday, Jan. 22, 2010

C.A.R. reports December home sales increased 1.7 percent; median home price increased 8.4 percent

Multimedia:
· Click here to view Unsold Inventory by price point.
· Click here to view a data table comparing peak prices and current prices in areas throughout the
state.


Quick Facts:
· Existing, single-family home sales increased 4 percent in December to a seasonally adjusted rate of
558,320 units on an annualized basis.

· The statewide median price of an existing single-family home increased 0.8 percent in December to
$306,820, compared with November 2009.

· C.A.R.’s Unsold Inventory Index fell to 3.8 months in December, compared with 5.6 months in
December 2008.

LOS ANGELES (Jan. 22) – Home sales increased 1.7 percent in December in California compared with the same period a year ago, while the median price of an existing home rose 8.4 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“As expected, the large year-to-year sales gains have diminished substantially compared with earlier in the year,” said C.A.R. President Steve Goddard. “However, home sales in December were strong, and were comparable to sales of late 2008. Activity in December can be attributed in part to the extension and expansion of the home buyer tax credit, as well as near-historic highs in affordability due to current price levels and low interest rates.

“For the second consecutive month, California’s median home price rose year-to-year in December, and had the largest year-to-year increase in more than three years,” said Goddard. “The state’s median price also remained above $300,000 for the second straight month.”

Closed escrow sales of existing, single-family detached homes in California totaled 558,320 in December at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 1.7 percent from the revised 549,190 sales pace recorded in December 2008. Sales in December 2009 increased 4 percent compared with the previous month.

The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the December pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during December 2009 was $306,820, an 8.4 percent increase from the revised $283,060 median for December 2008, C.A.R. reported. The December 2009 median price rose 0.8 percent compared with November’s $304,520 median price.

“Home sales were unusually strong in December and were more consistent with peak season trends,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Historically, the median price declines November through February and then rises in March. However, lean inventory, historically low interest rates, and incentives for home buyers have resulted in California’s housing market experiencing non-seasonal variations.

“Looking forward, we expect the state’s median home price to fluctuate around the $300,000 level throughout the first quarter,” said Appleton-Young. “While we expect to experience price gains in the near term, it remains to be seen how the market will fare once the Federal Reserve discontinues its purchase of mortgage-backed securities.”

Highlights of C.A.R.’s resale housing figures for December 2009:

. C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in December 2009 was
3.8 months, compared with 5.6 months (revised) for the same period a year ago. The index indicates
the number of months needed to deplete the supply of homes on the market at the current sales
rate.

. Thirty-year fixed-mortgage interest rates averaged 4.93 percent during December 2009, compared
with 5.29 percent in December 2008, according to Freddie Mac. Adjustable-mortgage interest rates
averaged 4.31 percent in December 2009, compared with 4.97 percent in December 2008.

. The median number of days it took to sell a single-family home was 35.3 days in December 2009,
compared with 46.3 days (revised) for the same period a year ago.

Regional MLS sales and price information are contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS® throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 146 of the 383 cities and communities reporting showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for December may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through car.org at
http://www.car.org/marketdata/historicalprices/2009medianprices/dec2009medianprices/.

. Statewide, the 10 cities with the highest median home prices in California during December 2009 were: Beverly Hills, $1,400,000; Los Altos, $1,340,000; Laguna Beach, $1,230,000; Manhattan Beach, $1,165,000; Palos Verdes Estates, $1,160,000; Palo Alto, $1,066,000; Los Gatos, $994,500; Newport Beach, $938,500; Rancho Palos Verdes, $900,000; and Santa Monica, $852,500.

. Statewide, the cities with the greatest median home price increases in December 2009 compared with the same period a year ago were: Laguna Hills, 62.9 percent; San Juan Capistrano, 37.2 percent; Fairfield, 30.9 percent; Tustin, 27.1 percent; El Cajon, 26.7 percent; Thousand Oaks, 19.5 percent; Escondido, 18.4 percent; Costa Mesa, 17.3 percent; San Pablo, 16.6 percent; and Encinitas, 16.3 percent.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 163,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

December 2009 Regional Sales and Price Activity*
Regional and Condo Sales Data Not Seasonally Adjusted

December-09	Median Price	Percent Change in Price from Prior Month		Percent Change in Price from Prior Year		Percent Change in Sales from Prior Month	Percent Change in Sales from Prior Year
	Dec-09	Nov-09		Dec-08		Nov-09	Dec-08
Statewide
Calif. (sf)	$306,820	0.8%		8.4%		4.0%	1.7%
Calif. (condo)	$270,300	-0.6%		11.5%		11.6%	28.2%
C.A.R. Region
High Desert	$121,010	-3.0%		-12.0%		12.7%	-12.3%
Los Angeles	$353,560	-1.7%		4.9%		15.7%	4.3%
Monterey Region	$308,570	-6.4%		6.4%		16.3%	-1.4%
Monterey County	$250,000	2.0%		-2.0%		23.7%	-10.2%
Santa Cruz County	$550,000	0.0%		20.9%		2.1%	27.8%
Northern California	$246,450	-8.3%		-8.2%		9.2%	22.9%
Northern Wine Country	$371,430	2.0%		7.9%		3.3%	-5.1%
Orange County	$496,070	-0.6%		12.1%		4.5%	17.9%
Palm Springs/Lower Desert	$172,320	0.1%		1.5%		21.1%	30.3%
Riverside/San Bernardino	$181,130	1.8%		-5.1%		13.6%	-19.3%
Sacramento	$189,140	0.4%		4.1%		14.5%	-15.0%
San Diego	$382,230	1.5%		10.3%		22.0%	6.9%
San Francisco Bay	$536,070	-5.5%		15.1%		6.6%	28.7%
San Luis Obispo	$381,940	-6.7%		2.0%		1.1%	8.6%
Santa Barbara County	$425,000	2.0%		28.4%		37.2%	12.2%
Santa Barbara South Coast	$847,500	13.0%		-8.9%		27.8%	37.3%
North Santa Barbara County	$256,940	9.5%		0.2%		44.2%	-2.6%
Santa Clara	$560,000	-7.4%		9.3%		7.3%	39.0%
Ventura	$427,890	-1.8%		15.4%		15.1%	8.2%

sf = single‑family, detached home

Source: CALIFORNIA ASSOCIATION OF REALTORS^®

Median Prices By Region – Current Month vs. Year Ago

Dec-09	Nov-09		Dec-08
Statewide
Calif. (sf)	$306,820	$304,520		$283,060	r
Calif. (condo)	$270,300	$271,920		$242,320	r
C.A.R. Region
High Desert	$121,010	$124,710		$137,560
Los Angeles	$353,560	$359,670		$336,980
Monterey Region	$308,570	$329,840		$290,070
Monterey County	$250,000	$245,000		$255,000
Santa Cruz County	$550,000	$550,000		$455,000
Northern California	$246,450	$268,700		$268,350	r
Northern Wine Country	$371,430	$364,230		$344,180
Orange County	$496,070	$499,020		$442,640
Palm Springs/Lower Desert	$172,320	$172,070		$169,730
Riverside/San Bernardino	$181,130	$177,840		$190,840
Sacramento	$189,140	$188,480		$181,660
San Diego	$382,230	$376,450		$346,600	r
San Francisco Bay	$536,070	$567,250		$465,640
San Luis Obispo	$381,940	$409,460		$374,320
Santa Barbara County	$425,000	$416,670		$330,950	r
Santa Barbara South Coast	$847,500	$750,000		$930,000
North Santa Barbara County	$256,940	$234,720		$256,450
Santa Clara	$560,000	$605,000		$512,450
Ventura	$427,890	$435,800		$370,750

na - not available

r - revised

Source: CALIFORNIA ASSOCIATION OF REALTORS^®