Investors With Cash Fuel Uptick in Home Sales

Posted by Jessica Boyd — February 2, 2012

1328201856Pleasanton, CA. January 25, 2012. Investors with cash continued to reap a harvest of bargain-priced bank-owned and short sale properties across the San Francisco Bay Area in the fourth quarter of 2011, sparking a slight uptick in home sales compared with the same period a year ago, according to an analysis of MLS data by the research division of Better Homes and Gardens Mason-McDuffie Real Estate.

In the nine-county Bay Area, 12,404 existing, single-family detached homes changed hands during the fourth quarter of 2011, 49 more than were sold in the fourth quarter of 2010. The most recent figure was down 8 percent from 13,484 homes sold in the third quarter – normally among the most active periods for home sales and purchase activity.

Fourth-quarter sales might well have eclipsed the previous quarter’s figures were it not for a shortage of homes on the market in the majority of Bay Area geographies and across most price ranges. One indicator of the level of inventory on the market is how many days it takes, on average, for homes to attract a formal offer to purchase. For the greater Bay Area, homes were on the market an average of 68 days in the fourth quarter, up slightly from 63 days in the previous quarter but down from 70 days in the fourth quarter of 2010. Average days on market ranged from a low of 47 in San Francisco to a high of 106 in Sonoma County.

For the quarter, Contra Costa County reported the greatest number of home sales (2,564), followed by Alameda County, with 2,503 homes sold, and Santa Clara County, with 2,423. Sonoma County recorded the highest percentage increase in sales on an annualized basis, with a 20 percent increase, while Santa Clara County experienced the greatest decline, with an 8 percent year-over-year drop in home sales. On a quarterly basis, San Francisco led the way with a 9 percent quarter-over-quarter improvement, while San Mateo reported the highest percentage decline with 16 percent fewer sales between the third and fourth quarters.

The continued presence in the market of investors offering cash for entry-level bank-owned and short sale properties helped speed the pace of home sales and boosted the number of closed home purchase transactions. But it also continued to put downward pressure on the median price of homes sold.

The median price of a home sold in the Bay Area during the fourth quarter was $485,411, down 5 percent from both the previous quarter, when it was $509,876, and the comparable year-ago period, when it stood at $508,336. Among Bay Area counties, only Napa County reported both quarter-over-quarter (+2%) and year-over-year (+8%) increases. Elsewhere in the region, county-by-county median home prices varied by no more than 9 percent on both a quarterly and annualized basis.

Bay Area homeowners and homebuyers seem to have adjusted to a real estate market characterized by modest ups and downs from month to month and quarter to quarter in response to economic news and other factors, including the inventory of homes for sale, the presence of large numbers of distressed properties and a shortage of traditional home sellers. Motivated home sellers with equity may find they have a window of opportunity in the coming months in those communities where there are more buyers than there are move-in-quality properties available. Pricing to the market will continue to be a critical factor. According to Keith Robinson, Better Homes and Gardens Mason-McDuffie Vice President, “Entry-level homebuyers and many luxury-home seekers should expect continued competition from investors with cash.”

Fourth Quarter 2011 Housing Market Survey – Bay Area Counties

Single-Family Detached Homes

 

Homes

Sold

Q4/11

Homes

Sold

Q4/10

%

Change

Avg.

DOM*

Q4/11

Avg.

DOM

Q4/10

Change

11/10

(Days)

Median

Price

Q4/11

Median

Price

Q4/10

%

Change

Bay Area

12,404

12,355

.4

68

70

-2

$485,411

$508,336

-

Fourth Quarter 2011 Housing Market Survey – Bay Area Counties

Single-Family Detached Homes

City

Homes

Sold

Q4/11

Homes

Sold

Q4/10

%

Change

Avg.

DOM*

Q4/11

Avg.

DOM

Q4/10

Change

11/10

(Days)

Median

Price**

Q4/11

Median

Price**

Q4/10

%

Change

Alameda

 2,503

2,472

1

53

47

6

$396,557

$425,834

-7

Contra Costa

2,564

2,688

-5

54

61

-7

$344,051

$357,426

-4

Marin

430

426              

1

64

83

-19

$804,941

$850,278

-5

Napa

319             

282

13

93

      113

-20

$356,533

$331,087

8

San Francisco

646           

615

5

47

53

-6

$881,139

$915,177

-4

San Mateo

991

1,047

-5

62

67

-5

$862,984

$840,422

3

Santa Clara

2,423

2,621

-8

66

58

7

$661,510

$670,864

-1

Solano

1,325

1,202

10

63

61

2

$193,651

$213,455

-9

Sonoma

1,203

1,002

20

106

86

20

$325,893

 $349,205

-7

Bay Area

Total

12,404

12,355

.4

68

70

-2

$485,411

$508,336

-

* 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 Bay Area is the mean of median home prices of each of the nine Bay Area counties. Each county’s median home price is the mean of median home prices of each of the cities within that county.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.

About Better Homes and Gardens Mason-McDuffie Real Estate

Our heritage began with the founding of Mason-McDuffie Real Estate in 1887. In 2010, the company was named the 17th largest real estate services firm in the nation (RIS Media), and Number One in the San Francisco East Bay (SF Business Times). The company provides comprehensive solutions to home buyers and sellers, and handled 7,790 transactions in 2011, generating $2.94 billion in sales. Better Homes and Gardens Mason-McDuffie Real Estate is independently owned and operated and includes joint ventures with partners Highland Partners in Piedmont and Montclair, Wine Country Group Realtors in the North Bay, and Tri-Valley Realty in Pleasanton-Hopyard and Ruby Hill. The organization is comprised of more than 1,400 sales professionals in 33 offices. For more information, go to www.bhghome.com

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