DataQuick on California Bay Area: Home Sales decline year-over-year in October, Conventional Sales up 26%

From DataQuick: Bay Area Home Sales Ease Back; Median Sale Price Edges Higher

A total of 7,595 new and resale houses and condos sold in the nine-county Bay Area in October. That was up 6.4 percent from 7,141 the month before, and down 3.9 percent from 7,902 for October a year ago, according to San Diego-based DataQuick.
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Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 3.6 percent of resales in October, the same as the month before, and down from 11.7 percent a year ago. Last month’s level is the lowest since 3.5 percent in June 2007. Foreclosure resales peaked at 52.0 percent in February 2009, while the monthly average over the past 17 years is 10 percent.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 10.3 percent of Bay Area resales last month. That was up from an estimated 10.2 percent in September and down from 22.9 percent a year earlier.

The key in this report is the decline in distressed sales (foreclosures and short sales). Distressed sales are now down to 13.9% from 34.6% in October 2012.

A little arithmetic: In October 2012, there were 7,902 sales with 34.6% distressed (foreclosure resale or short sale).  That means 5,168 sales were conventional.  In October 2013, there were 7,595 sales with 13.9% distressed.  That means 6,539 were conventional - an increase of 26% year-over-year.

This is a reminder that those who focus on the decline in overall sales are missing the key story of an improving market.  We see this same pattern in most areas of the country.