Homebuyer Tax Credit Buoys Bay Area Home Sales as Tighter Inventory, Multiple Bids Nudge Prices Higher
Posted by Cathy Harrington — February 4, 2010
Pleasanton, Calif. – January 27, 2010 – Despite a dwindling supply of bank REOs and the ongoing presence of cash-rich investors willing to bid up prices, first-time homebuyers motivated by an $8,000 federal tax credit available to those who purchased before December 1 dominated the San Francisco Bay Area existing-home market in the fourth quarter, according to an analysis of MLS data issued by the research division of Prudential California Realty.
Across the nine-county Bay Area, homebuyers purchased 13,288 existing single-family detached homes during the fourth quarter, down 9 percent from 14,662 homes sold in the third quarter but up 3 percent from 12,918 homes sold in the fourth quarter of 2008. With fewer homes to choose from and increased competition among buyers, the median price of a Bay Area home jumped 14 percent from $495,327 in the third quarter to $562,775 in the fourth quarter – a 15 percent improvement over the fourth-quarter 2008 median price of $488,684.
For the third consecutive quarter, Contra Costa County led the pace of sales with 2,980 closed transactions, followed by Santa Clara County (2,892 sales) and Alameda County (2,583 sales). Marin, Napa and Solano counties reported both quarter-over-quarter and year-over-year increases, while Santa Clara, San Francisco and San Mateo showed higher sales on an annualized basis. In a further sign the market is stabilizing, the average number of days a home was on the market before sale declined from 66 days in the third quarter and 63 days a year ago to 60 days in the fourth quarter of 2009. Homes sold in Alameda County registered the fewest days on the market for the quarter at 39 days, while Marin reported an average of 90 days on the market before sale.
Among Bay Area counties, the median price of a resale home rose from the third to the fourth quarter in Alameda, Contra Costa, Napa, San Francisco, Santa Clara, Solano and Sonoma. With the exception of Napa, the same counties also experienced year-over-year price increases, led by Santa Clara (+14%), San Mateo (+12%) and Sonoma (+11%). Observers attributed the improvement in median sales prices to an increase in multiple offers on short sale, REO and other entry-level and investment-grade properties and a modest improvement in prices in moderate- and higher-priced pockets in most counties.
Looking ahead, buyers expecting rock-bottom prices on bank foreclosures may find those in shorter supply in the months to come absent a flood of new properties. Increasingly, lenders are agreeing to short sale transactions, but buyers will face competition in the form of multiple buyers with sizeable down payments or all-cash. First-time buyers will continue to be a force in the market thanks to an extension through April 30, 2010, of the $8,000 federal income tax credit. They will be joined by existing homeowners, who can qualify for a $6,500 federal tax credit if they trade up before the same deadline.
Fourth Quarter 2009 Housing Market Survey – Bay Area Counties
Single-Family Detached Homes
* Days on market is the number of days a property was listed on the market until it went under contract at its final listing price. This may not reflect previous listings.
**The median home price for the entire county is the weighted mean of median home prices of cities within the San Francisco Bay Area.
Data are sourced from multiple listing services and are deemed reliable but not guaranteed.
All percentages rounded to nearest whole number. Bay Area refers to sales within Alameda County, Contra Costa County, Marin County, Napa County, San Francisco County, San Mateo County, Santa Clara County, Solano County and Sonoma County.
Produced by the Prudential California Realty Research Division
About Prudential California Realty:
Founded in 1887 as Mason-McDuffie Real Estate and transitioning to the Prudential name in 1997, Prudential California is a leading innovator of real estate technology solutions to its agents and clients. Prudential California Realty provides comprehensive real estate solutions when buying, selling and owning a home with more than 7,600 transactions and $2.8 billion in annual sales for 2009. The company offers consumers full MLS access to home listings through its website www.PruRealty.com. Owned by David Cobo and Ed Krafchow, the organization cumulatively has more than 1,800 agents and 36 offices. Prudential CA/NV is an independently owned and operated member of the Prudential Real Estate Affiliates.