Bay Area home sales post weak June figures as tax credits fade
The Bay Area registered its third worst home sale performance for a June in 15 years last month, the latest evidence that the effects of government stimulus programs for buyers are beginning to fade.
A total of 8,373 new and previously owned houses, town homes and condominiums sold in the nine-county Bay Area last month, according to the real estate research firm MDA DataQuick of San Diego.
That was an increase of 1.3% from May, but a 3.1% decline from June 2009. The month-over-month increase was also more than half below the average historical increase registered between the months of May and June, DataQuick said.
“The Bay Area market is getting a boost from super-low mortgage rates and a slightly friendlier lending environment for high-end borrowers,” DataQuick president John Walsh said. “But, barring new government stimulus, the housing market will be relying very heavily on improvements in the economy. A lot will depend on how many people find jobs, or stop worrying about losing the one they have.”
A federal tax credit that offered up to $8,000 for certain buyers required home purchase contracts to be signed by April 30 and buyers to close their deals by Sept. 30. Economists expect the effects of that credit to wane in coming months.
A separate state credit for first-time buyers and purchasers of new homes -- which allotted $100 million of taxpayer money for each category of buyer -- is also running out.
The state Franchise Tax Board said it has received applications totaling more than $100 million for the first-time buyer credit, but was still accepting applications because so many were "duplicate, revised or invalid." The cap for the new home credit has not been reached, the board said.
Prices in the Bay Area continued to rise in June, as fewer foreclosures and homes in more expensive neighborhoods sold last month. The median price was $410,000 in June, the same as in May, and an increase of 16.5% from June 2009.
A bright spot: Foreclosures as a percentage of the resale market are down considerably from the depths of the economic downturn, comprising 26.7% of the market in June. Foreclosure sales peaked at 52% of the market in February 2009.
-- Alejandro Lazo