Sales of existing single-family homes in California fell by more than 10 percent in July, and hit the lowest level since June 2008 when sales were at 427,910. Existing single-family home sales registered a seasonally adjusted annualized rate of 440,370 in July, decreasing 10.9 percent from June, and dropping 20.8 percent from July 2009. Although this was the first back-to-back double-digit monthly decrease since early 2007, monthly sales remained well above the cyclical trough of 254,650 sales that occurred in October 2007.
Tax Credits Pulled Forward Sales That Would Have Closed in June or July. The decline in sales in the last two months suggests that the strength in May activity that was driven by home buyer tax credits likely pulled forward a number of sales that otherwise would have closed in June or July. Raw (not seasonally adjusted) sales in all price segments fell in July as the impact of the tax credits diminished, but the decline was more significant in the lower-priced segments. Sales under $500,000 dropped 23.8 percent on a year-to-year basis in July, while sales in the middle tier ($500,000 to $999,999) decreased 16.2 percent, and sales of $1 million and above decreased 13.6 percent. Sales in the lower-priced segment (under $500,000), in fact, have been declining since October of 2009, but the July’s decline was the largest since November 2007. Meanwhile, sales in the higher-priced segments ($500,000 to $999,999 and $1 million and up) had been performing relatively well since last fall until the current month.
Sales in the Second Half of 2010 Will Likely Be Lower Than in the First Half of the Year. The increased momentum of sales in the high-end markets was due primarily to greater availability of financing, especially at the jumbo level. Despite the dip in July, sales in the middle tier and the high-end markets will likely stabilize for the remaining of the year. Sales of homes with price above $500,000 in 2010 will probably be slightly higher than their sales level in 2009. The outlook for the lower-priced segment, however, is not as encouraging, as the expiration of the tax credits affects more home sales in this tier. Sales for the below $500,000 market in the second half of 2010 will likely be lower than that in the first half of the year, and sales for the entire year will fall from the level in 2009. With sales in the lower-priced tier making up nearly three quarters of total home sales, overall sales for 2010 will decline modestly from 2009 to the low 500,000 range.
5556 Masonic Avenue is my “Pick of The Week” this week of all the homes I previewed. What a transformation from what I saw last June! At that time it was a tired, run-down 1940′s home and had been vacant for some time. Though public records show it to be a three bedroom/one and one-half bath home, it is much larger than that with two additional rooms downstairs. Both bathrooms have been remodeled and updated using good quality materials. The kitchen countertops are now granite and the newly laid oak hardwood floors now match the rest of the upstairs. French doors now open from the eat-in kitchen to the spacious patio. I would anticipate that this home will get a lot of buyer interest being priced at $725K and I would not be surprised to see it go to the best offer over $800K.
For over twenty-six years, I have had the privilege to call Oakland home and the pleasure to explore its many back roads. In spite of all the rapid changes Oakland and the Bay Area has experienced the last quarter century, I’ve discovered that it’s not all urban sprawl, inter-states and strip malls. So I’ve decided to share with you and your family some of my favorite Bay Area adventures. They may be dirt tracks, mountain trails, green open-spaces, bays and city streets. However, they are the right paths for people who don’t want to know what to expect around the next corner, but want to find out. I hope they lead you and your family to undiscovered wonderful places you can enjoy together. Most importantly, you’ll discover just what makes Oakland and the Bay Area such a great place to live.
Overall home sales in our Upper Rockridge neighborhood were down in the second quarter of 2010 compared to the same quarter in 2009. However, sales prices remained strong and stable with an average sale price of just over $1,104,000. Average days on the market for the homes which sold was 13 days. This is a clear indication that homes with little or no deferred maintenance and priced sharply, sold quickly. The added boost from lower mortgage rates and a somewhat friendlier lending environment for high-end borrowers has also had an impact.
by Michael
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