San Francisco Bay Area Median Sale Price Sets Another Record; Home Sales Rise Year Over Year in June, But Remain Below Average
New data released today by CoreLogic. shows a total of 8,291 new and resale houses and condominiums sold in Alameda, Contra Costa, Marin, Napa, Santa Clara, San Francisco, Solano and Sonoma counties in June 2017,* up 8.6 percent month over month from 7,637 sales in May 2017** and up 2.1 percent year over year from 8,122 sales in June 2016. Since 1988, the average change in sales between May and June is an increase of 4.3 percent. June sales have ranged from a low of 6,468 in 1993 to a high of 14,373 in 2004, and June 2017 sales were 6.9 percent below the June average of 8,910 sales since 1988 when data for this report begins (data start dates vary by county).
In June 2017, sales of newly built homes—detached houses and condos combined—were 35.6 percent below the long-term June average, while resales were 3.5 percent below the month’s average. Ignoring the 2003-2006 housing boom that was fueled by risky home loans, June 2017 resales were 2.4 percent above the month’s average.
“Despite a tight inventory, the San Francisco Bay Area still posted a small year-over-year gain in sales last month, suggesting it was quickly burning through its supply of homes for sale,” said Andrew LePage, research analyst with CoreLogic. “The uptick in sales from a year ago was the result of an 11 percent year-over-year increase in deals above $500,000, which compensated for a 16 percent drop in sub-$500,000 sales, reflecting a very limited inventory in lower price ranges. The market continues to receive little relief from new-home construction—a potential pressure-release valve. June’s new-home sales fell 6 percent year over year and were 36 percent below the average number sold in the month of June over the past three decades.”
The median price paid for all homes sold in the San Francisco Bay Area in June 2017 was a record $735,000, up 1.4 percent month over month from $725,000 in May 2017**—the prior all-time high—and up 7.5 percent year over year from $683,750 in June 2016. For the past five months, the region has posted year-over-year gains in its median sale price between 7.4 percent and 10 percent, higher than the median’s average annual gain of 6.7 percent over the last two years. On a year-over-year basis,the median has risen for 63 consecutive months—since April 2012—and those gains have been single-digit for 10 of the past 12 months. Last year’s highest median sale price was $683,750 in June, which remained the all-time high until the median rose to $685,000 in March of this year. Adjusting for inflation, the June 2017 median remained about 7 percent below its peak.
“While job growth, low mortgage rates, consumer confidence and other factors have helped fuel housing demand, tight
inventory remains the primary driver of price gains,” said LePage. “The median price paid in three Bay Area counties—Alameda, Santa Clara and Sonoma—climbed to new all-time highs last month, as did the median for the overall region. Adjusted for inflation, the region’s $735,000 June median remained 7 percent below the peak reached more than a decade ago; however, the go-go market of 2003 through 2006 relied very heavily on risky financing and, therefore, might not be the most meaningful period for comparison. In inflation-adjusted terms, this June’s San Francisco Bay Area median sale price was 31 percent higher than the region’s median 15 years ago, in June 2002, before the market entered a more heated phase.”
Home sales of $500,000 or more accounted for 74.9 percent of all sales in June 2017, up from 73.3 percent in May 2017 and up from 69.4 percent in June 2016.
Additional San Francisco Bay Area Highlights for June 2017:
►►Absentee buyers, mostly investors, bought 16 percent of all homes sold in June 2017. This was down from 16.3 percent in
May 2017** and up slightly from 15.7 percent in June 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 36.7 percent of the total number of home purchase loans used in the San Francisco
Bay Area in June 2017, up from 35.3 percent in May 2017 and up from 33 percent in June 2016. Jumbo mortgages also
represented 57.6 percent of the total dollar volume of all home purchase originations in June 2017, down from 59.1 percent in May 2017 and up slightly from 57 percent in June 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 8.9 percent of home purchase loans in the San Francisco Bay Area in June 2017, up from 8.5 percent in May 2017 and down from 11.4 percent in June 2016. Low-downpayment 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 June 2017 at 26.4 percent, followed by Contra Costa County at 15.8 percent and Napa County at 10.7 percent.
►► Real estate-owned (REO) sales represented 1.1 percent of total home sales in June 2017, down from 1.5 percent in May 2017** and down from 2.3 percent in June 2016. REOs are homes that lenders took back through foreclosure and then sold on the open market.
* San Mateo County data is temporarily unavailable due to an interruption in the availability of public property records. Data cited has been adjusted to not include San Mateo County across timeframes.
**When necessary May 2017 data was revised. Revisions are standard, and to ensure accuracy CoreLogic incorporates newly released data to provide updated results.