Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:
Sales were down 7.7 percent from July and 0.6 percent from August 2012, according to the research firm DataQuick. The median price paid for a home in the Bay Area last month was $540,000, a decrease of 3.9 percent from July but up 31.7 percent from a year ago. Due to seasonal shifts in sales patterns, the Bay Area median price almost always declines from July to August.
The Bay Area median peaked at $665,000 in June and July 2007, then dropped as low as $290,000 in March 2009. Last month’s median was 18.8 percent below the peak.
“As the market pendulum swings back toward normal, trends will be affected by more mundane market factors such as interest rates, employment, economic growth, affordability, mortgage availability, and how fast demand is generated and met,” said John Walsh, DataQuick president, in a statement. “The next few months are going to be interesting, especially when it comes to pricing trends.”
Check out DataQuick’s full report for sales and price data in each of the nine Bay Area counties.
RISING RATES A MUCH-DISCUSSED TOPIC
The San Francisco Chronicle’s home-finance columnist, Kathleen Pender, discusses the impact of rising mortgage rates on the housing recovery in a column posted online last week.
Surveys of consumers and economists suggest that the recovery may stall when mortgage rates reach 6 percent, Pender says, but the “tipping point” could vary, depending on location.
Buying a home remains a smart investment today, but she passes along a prediction from Trulia Chief Economist Jed Kolko that renting a home becomes a good option when rates reach 5.4 percent in San Francisco and 8.2 percent in Oakland. The most recent calculations put the average 30-year, fixed-rate mortgage at 4.57 percent.
DWINDLING NUMBER OF UNDERWATER HOMEOWNERS
Homeowners are quickly recapturing the equity they lost in the last decade, according to recent reports from CoreLogic and RealtyTrac.
Rising home prices meant 2.5 million homeowners were no longer underwater in the second quarter, according to CoreLogic’s report. By the end of June, 14.5 percent of mortgage borrowers remained underwater on their loans, compared with 19.7 percent at the end of the first quarter and 26 percent in late 2009,.
RealtyTrac, meanwhile, reported that 8.3 million homeowners are either slightly underwater or slightly above water, putting them on track to have enough equity to sell sometime in the next 15 months without resorting to a short sale.
LINK BETWEEN HOMES PRICES AND DIVORCE RATES?
We’re not making this up: Divorce attorneys and real estate professionals are reporting an upswing in divorcing clients as home prices rise, according to a story on the RISMedia website.
Apparently, many couples stalled divorce proceedings while their homes were underwater, but newfound equity in their homes offers them “start-over cash.”
“So many couples have been living together and biding their time,” says Florida lawyer Leigh Sigman. “I know many people who have coasted for years … until they got equity in their homes.”
(Illustration: Flickr/Scott Maxwell)