Bay Area Home Sales Rise Again

The number of homes sold in the Bay Area in April was higher than a year ago for the eighth month in a row while the median price fell 41.3 percent to $304,000 as bargainpriced foreclosures continue to dominate the market.

While the median prices is down significantly from a year ago, it edged up slightly on a month-to-month basis for the first time in almost two years, said the report released Thursday by MDA DataQuick Information Systems.

In April, a total of 7,139 new and resale houses and condominiums closed escrow in the Bay Area, a 12.9 percent increase from March and a 13.1 percent gain from March 2008. The 13.1 percent year-to-year gain for home sales is significantly smaller than the 29.1 percent year-toyear gain reported for March home sales.

Last month's median price was 4.8 percent higher than in March, the first time there was a month-to-month gain since October 2007, when the median price increased 1
percent from September 2007.

From March to February and from March to April, the median sales price reflected a 1.7 percent drop, compared to an average month-to-month decline of almost 5 percent in the 12 months ending in January 2009.

"When you see units up and prices going up it points toward stabilization and it's very encouraging," said Rick Turley, president of Coldwell Banker Residential Brokerage in the Bay Area.

A lower concentration of discounted foreclosure resales helps explain why the median sales price has begun to stabilize, the DataQuick report said.

That said, Turley and other real estate observers expect more foreclosures to come onto the market in the coming months now that temporary foreclosure moratoriums have ended. More foreclosures could drag down median prices, which is the point at which half of homes sell for more and half sell for less.

In April, 47.4 percent of existing home sales in the Bay Area involved properties that had been foreclosed upon at some point in the last 12 months, compared to 50.2 percent in March and 52 percent in February.

Turley pointed out that the recent slowdown in foreclosure sales is likely the result of foreclosure moratoriums that were in place until the end of March. Now that the moratoriums have been lifted, expect to see more foreclosed properties to be put on the market, he said.

"We will see more. They are being released more. There was a buildup," he said.

As far as April home sales that closed, Turley said the low-end market is the strongest in the Bay Area.

"We are seeing that the lower-end market is really on fire," he said. "Multiple offers are being made on the low-end of the market due to lots of well-priced distressed properties and historically low interest rates."

As far as higher-priced properties go, Turley said he is seeing pending sales activity for homes in wealthy areas of the Peninsula such as Portola Valley, Atherton and Hillsborough. In the East Bay, Orinda, Danville and Montclair are also seeing pending sales activity for high end properties.

"For the past few months we've seen faint but growing signs that would normally suggest many markets are nearing price stabilization. But we'll need to see those vital signs continue to strengthen into the fall. Job losses and historically high foreclosures levels continue to pose serious threats to housing stability," DataQuick President John Walsh said in a statement.

Inventory levels are tightening up in markets such as Brentwood, Livermore, Walnut Creek and Pleasant Hill, where the median sales price is in the range of $400,000 to $500,000, said Jeff Sposito, president of J.Rockcliff Realtors, an East Bay real estate brokerage. Inventory levels are a measure of the time it would take for homes to be sold in a particular area.

Back in November, inventory levels in those cities ranged from 12 to 14 months whereas now they are in the four to five-month range, Sposito said.

Steve Dhillon, a Realtor with the Fremont office of RE Realty Experts, said inventory levels are down compared to few months ago. Lower inventory helps explains recent price stabilization, he said.

In January, there were 130 foreclosed homes for sale in the Tri-City area of Fremont, Union City, Newark. In April, that number was 85.

"Inventory is low and what I'm also finding is more buyers are entering the market" to take advantage of lower interest rates, low home prices and tax credits for buying homes, he said. "In a year or so, people will look back and think that was a great time to buy," Dhillon said.

By Eve Mitchell Staff Writer Bay Area News Group
Source: Contra Costa Times, May 21, 2009