Real Estate Investment: Return on Investment and Cash Flow Calculation

The median sale price fell again on a year-over-year basis, partly because of the slowdown in sales above the mid point for prices, a real estate information service reported.

A total of 6,317 new and resale houses and condos sold in the nine-county Bay Area last month. That was down 2.0% from 6,444 in October, and up 3.4% from 6,111 in November 2010, according to San Diego-based DataQuick.

The median price paid for all new and resale houses and condos sold in the Bay Area last month was $363,500. That was up 3.9% from $350,000 in October, and down 4.3% from $380,000 in November 2010. The median has declined on a year-over-year basis for the last 14 months.

Last month distressed property sales — the combination of foreclosure resales and “short sales” — made up 47.8% of the resale market. That was up from 45.2% in October and 46.7% a year ago.

Foreclosure resales — homes that had been foreclosed on in the prior 12 months — accounted for 26.5% of resales in November. That was up from 25.3% in October, and down from 28.6% a year ago. Foreclosure resales peaked at 52.0% in February 2009. The monthly average for foreclosure resales over the past 15 years is about 10%.

Short sales — transactions where the sale price fell short of what was owed on the property — made up an estimated 21.3% of Bay Area resales last month. That was up from 19.9 % in October and 18.1 % a year earlier. Two years ago the estimate was 16.5%.

Last month 31.0% of Bay Area sales were for $500,000 or more, down from a revised 31.3% in October, and down from 37.2% in November 2010.

Government-insured FHA home purchase loans, a popular choice among first-time buyers, accounted for 22.3% of all Bay Area home purchase mortgages in November. That was up from 21.2% in October and down from 23.9% a year earlier.

One indicator of mortgage availability that had seen improvement earlier this year dropped again in November, when 11.6% of the Bay Area’s home purchase loans were adjustable-rate mortgages, down from a revised 12.9% in October, and up from 9.9% in November last year. Over the last decade, ARMs have accounted for 51.0% of all purchase loans.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 29.7% of last month’s purchase lending, up from a revised 27.9% in October, and down from 33.4 % a year ago. Jumbo usage dropped to 17.1% in January 2009. Before the credit crunch struck in August 2007, jumbos accounted for nearly 60% of the Bay Area purchase loan market.

Last month absentee buyers — mostly investors — purchased 22.6% of all Bay Area homes sold, up from 22.3% in October and 19.1% a year ago.

Buyers who appear to have paid all cash — meaning no corresponding purchase loan was found in the public record — accounted for 27.9 % of sales in November, down from 28.5 % in October but up from 25.2 % a year ago.