The Bay Area's housing market staged a breakthrough in July, reaching the highest level of sales for any month in nearly seven years, according to a report Thursday. The housing recovery has been bogged down by a lack of inventory. This month's report indicates that is no longer the case, as sellers respond to double-digit price increases.
Jonathan and Breanna Everett just sold their Walnut Creek townhouse for $425,000, about $100,000 more than they paid for it 3 years ago.
With 9,339 sales in July of all types of homes -- houses, condos and townhomes -- the nine-county region has topped sales for every month since July 2005, before the housing market slumped with the bursting of a home price bubble, DataQuick reported.
"The pendulum is swinging back to normalcy," said Andrew LePage of DataQuick.
Sellers are coming back into the market, said Realtor.com's president Errol Samuelson. "You're seeing the market start to stabilize, which is a really good thing. We didn't want a nice recovery to turn into an overheated market."
Sellers are benefiting from the large yearly gain in median sale prices. Single-family home prices were up 31.7 percent from July 2012 across the nine counties.
In the South Bay, Peninsula and East Bay, median sale prices for existing single-family homes were up double digits from a year ago to $570,000 in Alameda County, $450,000 in Contra Costa County, $740,000 in Santa Clara County and $833,000 in San Mateo County.
Single-family sales in those four counties were not at their highest in seven years for any month, but Santa Clara and Alameda counties had the strongest July in sales since 2005; San Mateo County topped any July since 2006, while Contra Costa had the best July since 2009.
There's good news for buyers, too. Some real estate agents are reporting fewer numbers of multiple offers and some sales for less than the asking price, making it easier for move-in buyers to get into the market. That may be partly because investors are bidding on fewer homes. Absentee buyers -- typically investors -- were 20.9 percent of the market in July, down from a peak of 28.7 percent in February.
"It seems like the investors have backed out of the market abruptly," said Kevin Kieffer of Keller Williams Realty in Danville. "There's enough owner-occupy buyers coming in to fill the gap, and they're getting a better price."
An investor himself, Kieffer said that lately people buying to move in "will beat me back every time."
Bryce Ellsworth of Windermere Ellsworth Associates in Brentwood said he is seeing fewer multiple offers. "Houses that two months ago would have gotten 20 offers are now getting six or seven," Ellsworth said. "One of my clients said he was surprised at the number of choices he had and how nice the homes were."
One of Kieffer's clients, patent lawyer David Chung, is buying a home in downtown Walnut Creek with money from the sale of homes in Sacramento and Santa Clara."We timed it well," Chung said. Even though interest rates have jumped above 4 percent, he's not complaining. "These are incredibly low rates. I couldn't be happier," Chung said.
While overall sales were up, they fell in the most affordable markets, said DataQuick. Sales of homes below $500,000 dropped 14.6 percent from a year earlier, and home sales above that price increased by 55.9 percent.
The median price reached a low of $290,000 for all types of homes in March 2009. It peaked at $665,000 in June and July 2007 -- and at $562,000 in July, the median price has recovered nearly 85 percent of that high.
The median price is partly affected by a decline in the sales of lower-cost homes and an increase in higher-priced homes, DataQuick noted.