San Francisco Bay Area Housing Market Logs Home Sales Gains in August; Median Sale Price Dips from July, but Still Up More Than 11 Percent Year Over Year. New data released today by CoreLogic® shows a total of 8,388 new and resale houses and condominiums sold in Alameda*, Contra Costa, Marin, Napa, Santa Clara, San Francisco, San Mateo, Solano and Sonoma counties in August 2017, up 11.7 percent month over month from 7,512 sales in July 2017** and up 1.7 percent year over year from 8,245 sales in August 2016. August 2017 sales were the highest for the month of August since 2013 when 8,616 homes sold. Since 1988, the average change in sales between July and August is a gain of 2.5 percent. August sales have ranged from a low of 6,688 in 1992 to a high of 13,940 in 2004, and August 2017 sales were 10.4 percent below the August average of 9,365 sales since 1988 when data for this report begins (data start dates vary by county).
In August 2017, sales of newly built homes—detached houses and condos combined—were 38.7 percent below the long-term August average, while resales were 7 percent below the month’s average. Ignoring the 2003–2006 housing boom that was fueled by risky home loans, August 2017 resales were 1.5 percent below the month’s average.
“Inventory remained tight, but San Francisco Bay Area home sales reached a four-year high for the month of August, rising about 2 percent year over year thanks to an 11 percent gain in $500,000-plus deals that compensated for a 20 percent drop in sales below $500,000,” said Andrew LePage, research analyst with CoreLogic. “The same trend played out during the combined June-through-August summer period when sales inched up 0.8 percent year over year as a 9.5 percent gain in $500,000-plus sales made up for a 19 percent decline in sub-$500,000 activity. The tiny annual gain in the number of transactions recorded this summer came despite an 8 percent drop in sales of newly built homes, including a 36 percent decline in Solano County where new-home prices are among the region’s lowest.”
The median price paid for all homes sold in the San Francisco Bay Area in August 2017 was $742,000, down 3 percent month over month from $765,000 in July 2017** and up 11.6 percent year over year from $665,000 in August 2016. The San Francisco Bay Area’s median sale price hit an all-time high at $775,000 in June 2017, and last month’s median was 4.4 percent below that peak. Adjusting for inflation, the August 2017 median remained about 7.7 percent below its June 2006 inflation-adjusted peak.
For the past six months, the region has posted year-over-year gains in its median sale price between 7.1 percent and 11.6 percent. The average gain over that period was 9.4 percent, up from an average year-over-year gain of 5.2 percent last year during the same six-month period (March-August). On a year-over-year basis, the median has risen for 65 consecutive months—since April 2012—and those gains have been single-digit for 9 of the past 12 months.
“The Bay Area’s 11.6 percent year-over-year gain in its median sale price in August 2017 was the highest for any month in more than a year and a half—since it rose 14.4 percent in January 2016,” said LePage. “Last month’s gain reflects the region’s severe mismatch between housing supply and demand and, to a lesser extent, a shift in ‘market mix,’ in which a slightly higher share of sales this August were in mid- to high-cost areas.”
Home sales of $500,000 or more accounted for 75 percent of all sales in August 2017, down from 75.6 percent in July 2017 and up from 68.3 percent in August 2016.
Additional San Francisco Bay Area Highlights for August 2017:
► Absentee buyers, mostly investors, but also second-home buyers, bought 15.9 percent of all homes sold in August 2017. This was unchanged from July 2017** and down a hair from 16 percent in August 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 37.1 percent of the total number of home purchase loans used in the San Francisco Bay Area in August 2017, down from 38.9 percent in July 2017 and up from 31.6 percent in August 2016. Jumbo mortgages represented 58.3 percent of the total dollar volume of all home purchase originations in August 2017, down from 60 percent in July 2017 and up from 52 percent in August 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 8.7 percent of home purchase loans in the San Francisco Bay Area in August 2017, down from 10.5 percent in July 2017 and down from 10.7 percent in August 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 August 2017 at 22.3 percent, followed by Contra Costa County at 16.5 percent and Sonoma County at 12.7 percent.
► Real estate-owned (REO) sales represented 1 percent of total home sales in August 2017, up slightly from 0.8 percent in July 2017** and down from 1.5 percent in August 2016. REOs are homes that lenders took back through foreclosure and then sold on the open market.
*Alameda County data was estimated for August 2017 because of late data availability. **When necessary July 2017 data was revised. Revisions are standard, and to ensure accuracy CoreLogic incorporates newly released data to provide updated results.
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