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Bay Area Home Prices Cooling Off

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A sign stands in front of a home for sale in San Francisco (Justin Sullivan/Getty Images)

A sign stands in front of a home for sale in San Francisco (Justin Sullivan/Getty Images)

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SAN FRANCISCO (CBS/AP) — A research firm said home prices in the San Francisco Bay Area began to cool off last month after a torrid run.

California posted its strongest homes sales for any August in seven years as price increases cooled, a research firm said Friday, a relief to buyers who have been competing over slim pickings.

There were 42,546 new and existing houses and condominiums sold, up 3.1 percent from 41,280 sales a year earlier and the highest August tally since 51,054 homes sold in 2006, according to DataQuick.

The median sales price was $361,000, down 0.6 percent from 363,000 in July but still up 28.5 percent from $281,000 in August 2012. It was the 18th straight month of annual price gains.

Sales were especially strong for mid- to high-priced homes. Sales above $500,000 jumped 28.2 percent in the nine-county Bay Area and soared 48.7 percent in Southern California.

Louis Marcoux, 35, lost three bids before buying a four-bedroom house last month for $830,000 in Pleasanton. It is better house than the previous ones he sought—and less expensive.

“It got sort of crazy in May, June,” said Marcoux, an executive at a medical device maker. “We were ready but weren’t pressed for time … The wait was worth it.”

The median sales price in the Bay area was $540,000, down 3.9 percent from $542,000 in July but still up a whopping 31.7 percent from $410,000 in August 2012. There were 8,616 homes sold in the Bay area, down 0.6 percent from a year earlier.

DataQuick reported Thursday that Southern California’s median sales price was $385,000 last month, matching a 64-month high and marking the 13th straight month of annual double-digit gains. Sales increased 2.8 percent to 23,057 homes.

“We’re starting to see an overdue correction that’s going to lead to much more moderate price increases,” said Michael Lea, lecturer at San Diego State University’s Corky McMillin Center for Real Estate.

The sales increase partly reflects a national trend of fewer homeowners owing more than their homes are worth, allowing them to sell without taking a loss, analysts said. CoreLogic Inc., a real-estate data firm, reported this week that 15.4 percent of its mortgaged homes in California were “underwater” at the end of June, down from 21.3 percent three months earlier.

Foreclosed homes, which drove sales after the 2008 financial market meltdown, made up a much smaller part of the sales mix. According to DataQuick, homes foreclosed upon during the previous year accounted for 7.8 percent of existing home sales in August, down from 20 percent a year earlier and 58.8 percent in February 2009.

Lea said he is watching for housing inventories to grow, which will help keep a lid on price increases.

The California Association of Realtors reported a 2.9-month supply of single-family homes for sale in July, down from 3.5 months a year earlier. A normal supply is considered five to seven months.

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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