Bay Area home sales cool off in July

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Prices slid and home sales stalled in the Bay Area last month as potential buyers took time out to evaluate the state of the market now that federal tax credits have expired.

July sales hit their lowest level in 15 years as 6,773 new and resale homes closed escrow in the nine-county region, down 19.1% from June and down almost 23% from July 2009, according to MDA DataQuick of San Diego.

The median price paid for all new and resale houses and condos combined was $402,000, down 2% from June but up almost 2% from July 2009 in San Francisco, Alameda, Marin, Contra Costa, Napa, Santa Clara, San Mateo, Solano and Sonoma counties.

Last month marked the first in which the median -- the point at which half the homes sold for more and half for less -- fell month-to-month since April this year, when it dipped 2.6% from March.

‘There was more to last month’s sales drop than expiring federal home buyer tax credits, but we think they were the main reason the decline was so sharp,” said John Walsh, president of MDA DataQuick. “As the boost from the credits waned, low mortgage rates just weren’t enough to outweigh the weak economic recovery and low consumer confidence.’

There has also been a pause in the market, Walsh said.

‘Some potential buyers – including those who held off until the tax credits expired – will take their time to assess market conditions, searching for signs of renewed price cuts,’ he said.

Depending on the economy and other factors, that might be what some of them find, he said, especially in areas with growing inventories of unsold homes, including distressed properties.

Last month, foreclosure resales made up 26.1% of the total, an increase of less than one percentage point from June and down from 33.6% in July 2009.

-- Roger Vincent