Maybe it wasn’t our imagination that the Bay Area Open Houses that we attended (and held) this past weekend seemed slower than a tortoise or even slower than real bank reform legislation. Bay Area home sales for July fell to the lowest level in 15 years and the year-over-year drop represents the largest for any month since May 2008.
According to MDA DataQuick, 6,773 homes were sold during the month across the nine-county area of central California. That number, shows the housing numbers down 22.8% from a year ago and 19.1% lower than June. Sales of foreclosed properties accounted for 26.1% of July’s total.
And look how FHA loans continue to make a stir even here in the Bay Area. FHA loans accounted for 23.3% of Bay Area purchase lending last month, down from 25% percent in June and from 24.1% a year ago. Consider that two years ago FHA loans embodied just 12.7% of purchase mortgages. Many agents in San Francisco and the Peninsula would laugh if they saw a buyer approach with an FHA loan offer.
Why all this slowdown? We think that some buyers got scared off when the Federal Tax Credit expired. Others continue to figure out the market, which to some people seems about as easy as wrangling cats. Some people continue to wait to see if the housing market will take another dip. Maybe things will drop a bit but with the interest rates so low that might not be the most important determination of whether to jump in know or sit on the sidelines for a few months.
Photo courtesy hellkvist.org