San Francisco Bay Area Median Sale Price Reaches Another Peak; Home Sales Rise in May, but Remain Subpar
New data released today by CoreLogic® shows a total of 8,164 new and resale houses and condominiums sold in Alameda, Contra Costa, Marin, Napa, Santa Clara, San Francisco, San Mateo*, Solano and Sonoma counties in May 2017, up 18.4 percent month over month from 6,896 sales in April 2017** and up 1.6 percent year over year from 8,038 sales in May 2016. Since 1988, the average change in sales between April and May has been an increase of 7.2 percent. May sales have ranged from a low of 6,216 in 2008 to a high of 13,567 in 2004, and May 2017 sales were 13.4 percent below the May average of 9,423 sales since 1988 when data for this report begins (data start dates vary by county)
In May 2017, sales of newly built homes—detached houses and condos combined—were 36.2 percent below the long-term May average, while resales were 10.7 percent below the month’s average. Ignoring the 2003–2006 housing boom that was fueled by risky home loans, May 2017 resales were about 6.8 percent below the month’s average.
The median price paid for all homes sold in the San Francisco Bay Area in May 2017 was $755,000, setting a new high for the region. The median sale price was up 0.7 percent month over month from $750,000 in April 2017** and up 7.1 percent year over year from $705,000 in May 2016. An increase in the region’s median sale price between April and May is normal, and the average change in the median between those two months since 1988 is a gain of 1.5 percent. For the past four months, the region has posted year-over-year gains in its median sale price between 7.1 percent and 10 percent, higher than the median’s average annual gain of 6.4 percent over the last two years. On a year-over-year basis, the median has risen for 62 consecutive months—since April 2012—and those gains have been single-digit for 15 of the past 16 months. Last year’s highest median sale price was $710,000 in June, which remained the all-time high until the median rose to $715,000 in March. Adjusting for inflation, the May 2017 median remained about 6 percent below its June 2006 peak.
“Low inventory continues to foster a pressure cooker environment in which prices edge higher,” said Andrew LePage, research analyst with CoreLogic. “As job growth, low interest rates and higher consumer confidence fueled housing demand in
recent years, demographic and other trends constrained the number of resale homes listed on the market, while new-home construction remained below historically normal levels. The drop in affordability over the past year is worse than the rise in home prices suggests. The San Francisco Bay Area’s record median sale price last month of $755,000 was up about 7 percent year over year, but the nearly half-a-percentage-point rise in mortgage rates over that same period means the principal and interest payment for that median-priced home has risen more than 12 percent.”
Home sales of $500,000 or more accounted for 75.5 percent of all sales in May 2017, up from 74.5 percent in April 2017 and up from 71.1 percent in May 2016.
Additional San Francisco Bay Area Highlights for May 2017:
► Absentee buyers, mostly investors, bought 16.4 percent of all homes sold in May 2017. This was unchanged from April 2017** and up slightly from 16.1 percent in May 2016. The absentee buyer share peaked at 28.4 percent in February 2013, and the monthly average since 1988 is approximately 15 percent.
► Jumbo mortgages accounted for 37.7 percent of the total number of home purchase loans used in the San Francisco Bay Area in May 2017, down a hair from 37.8 percent in April 2017 and up from 35.7 percent in May 2016. Jumbo mortgages also represented 59.1 percent of the total dollar volume of all home purchase originations in May 2017, down slightly from
59.8 percent in April 2017 and up from 57.5 percent in May 2016. Jumbo mortgages are loans that exceed the “conforming loan limit” which is set by regulation and varies by county. Nationally, the base conforming loan limit for single-family homes this year is $424,100, but high-cost areas, including most of the San Francisco Bay Area, had higher limits of up to $636,150. A rise in the jumbo mortgage share of home purchase loans can be related to higher home prices, an increase in the share of sales occurring in the market’s higher end or the greater availability of funding for jumbo loans.
► Government-insured Federal Housing Administration (FHA) loans accounted for 7.9 percent of home purchase loans
in the San Francisco Bay Area in May 2017, down from 8.6 percent in April 2017 and down from 10 percent in May 2016. Low-down-payment FHA loans accounted for a substantially higher share of home purchase loans in the more affordable stretches of the Bay Area. For example, Solano County had the highest FHA share in May 2017 at 20.8 percent, followed by Contra Costa County at 15.9 percent and Napa County at 11.9 percent.
► Real estate-owned (REO) sales represented 1.1 percent of total home sales in May 2017, down from 1.4 percent in April 2017** and down from 1.8 percent in May 2016. REOs are homes that lenders took back through foreclosure and then sold on the open market.
* SSan Mateo County data was estimated for May 2017 because of late data availability.
**When necessary April 2017 data was revised. Revisions are standard, and to ensure accuracy CoreLogic incorporates newly released data to provide updated results.
TOTAL HOMES SOLD/MEDIAN PRICE FOR SELECT SAN FRANCISCO BAY AREA COUNTIES (REFLECTS TOTAL HOME SALES)
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