We may not have seasons in the Bay Area (besides wet and dry), but our housing market, like many others across the country, takes seasonal cues. The fall back/spring forward ritual for daylight savings time applies to housing markets as well. Each year, prices spring ahead in the spring, then fall back in the fall.
Check out this chart comparing home price indices from S&P Case-Shiller and CoreLogic (via Calculated Risk). These are indices that track prices in markets nationwide and include our own San Francisco Bay Area.
In the Bay Area, home sales and median prices closed out the summer strong. According to DataQuick, the nine-county Bay Area saw its strongest home sales for the month of August in six years, with a total of 8,579 new and resale homes sold, a 1.4% increase July and 14.2% increase from August 2011.
We expect the numbers to retreat a bit for fall, but remain strong and well above figures during the same months last year. The market is much stronger than this time last year due to low interest rates, an improving economy and local job market, and increasing demand in mid- to move-up market segments.
The median price for all new and resale houses and condos sold in the Bay Area in August was $410,000, down 2.6% from July and up 10.8% from August 2011. History shows that a slight price drop almost always occurs from July to August every year – following a seasonal pattern.
Meanwhile, Bay Area foreclosure sales were down in August, accounting for 14.9% of resales (down from 15.1% in July and 25.7% a year ago). This was the lowest percentage of foreclosure sales since December 2007, when foreclosures made up 14% of the resale market.
Santa Clara County had the highest sales volume with 1,892 homes sold, followed by Alameda and Contra Costa Counties with 1,828 and 1,649 homes sold, respectively.
We expect a slower fall than summer, but a much stronger fall than what we saw last year. That's what really matters in the grand scheme of the housing recovery. Vast improvements on a year-over-year basis paint a clear picture that our market is strengthening more each year – even as we see highs and lows throughout the seasons.
Changing with the seasons!