Reflecting the Low inventory, high demand, and a changing mix of homes for sale, the median price of a bay area home shot up 27% in January.
A total of 5,501 new and resale houses and condos were sold in the nine-county Bay Area last month. That was down 28.4 percent from 7,688 in December, and up 3.2 percent from 5,330 for January a year ago, according to San Diego-based DataQuick.
Sales always drop from December to January. While still below the long-term January average of 6,094, last month’s sales count was the strongest since 6,168 homes were sold in 2007. The strongest January in DataQuick’s records, which go back to 1988, was in 2005 when 8,298 homes sold. The slowest sales were in 2008, when 3,586 sold.
“When we look carefully at underlying trends, it’s obvious that the market is still far from normal. The mortgage market is still dysfunctional. Relative sales rates between categories are lopsided. That said, the market imbalances are moving toward normalcy, with baby steps,” said John Walsh, DataQuick president.
The median price paid for a home in the nine-county Bay Area was $415,000 in January. That was down 6.3 percent from $442,750 in December, and up 27.3 percent from $326,000 in January a year ago.
A drop in the median sale price from December to January is normal for the season. At least half of the year-over-year increase in the January median is the result of changes in market mix, with sales shifting away from low-cost distress homes toward more mid-market and move-up homes.
The median reached a high of $665,000 in June/July 2007 and then fell to a low of $290,000 in March 2009. On a year-over-year basis, the median dropped more than 30 percent each month from August 2008 through May 2009. At the median’s current rate of increase, it will recover about half of its peak-to-trough loss sometime this spring.
The number of homes sold for less than $500,000 last month fell 17.9 percent year-over-year, while the number sold for more than $500,000 increased 45.4 percent, DataQuick reported.
Looking at the data below, it’s amazing to see the enormous gains in median price compared with modest gains or even losses in sales volume. It’s tough to quantify the exact extent, but tight inventory is clearly a huge factor in how quickly home prices are rising.