You Can Bank On Our Rates

The most local, national and online bank rates!

San Francisco Area Home Sales Hit 2008 High

Bay Area homes sold at their fastest pace in 17 months in October as buyers favored more affordable inland areas where depreciation and foreclosures have hit hardest.By DQNews

For more real estate news, please visit: DQNews.com. Also check out sbup to compare mortgage rates.

LA JOLLA, CA -- Bay Area homes sold at their fastest pace in 17 months in October as buyers favored more affordable inland areas where depreciation and foreclosures have hit hardest. As a result, the median sale price continued its steep, months-long decline, falling a record 40.6%, or $256,000, from a year ago, a real estate information service reported.

A total of 7,613 new and resale houses and condos closed escrow in the nine-county Bay Area in October. That was up 4.7% from 7,271 in September, and up 38.8% from 5,486 in October 2007, according to San Diego-based MDA DataQuick.

More often than not, Bay Area sales have risen slightly between September and October over the past two decades, but October has never been the peak sales month in any of those years.

Last month's sales were the highest for any month since June 2007, when 7,964 homes sold. But sales were still the second-lowest for any October since 1995 and were 14.2% below the average number sold during October since 1988, when DataQuick's statistics begin.

Regionwide sales this fall have far outshined the relatively weak transaction levels of a year ago, when sales were depressed by the August 2007 credit crunch and earlier subprime mortgage market meltdown. In the Bay Area and across the state, home shoppers' resolve to snag a "bargain" seems to have outweighed concerns over September's especially grim news on the economy and financial markets.

Inland communities continued to fuel the bulk of the Bay Area's sales gains, attracting buyers searching for the biggest discounts.

Contra Costa, Napa, and Solano counties - where prices are down sharply and sales have risen the most - accounted for 36.4% of Bay Area sales in October, compared with 25.0% a year ago. Sales of existing single-family houses in those counties rose 126 to 187% last month from a year ago. Meantime, sales fell or rose more modestly in pricier San Francisco, Marin and San Mateo counties.

The median price paid for all new and resale houses and condos combined fell to $375,000 last month, down 6.3% from $400,000 in September and down a record 40.6% from $631,000 in October 2007. It was the 11th consecutive month in which the median fell on a year-over-year basis.

The October median - the point where half of the homes sold for more and half for less - stood at its lowest point since it was $370,000 in January 2002. It was 43.6% below the peak median of $665,000 reached in June, July and August of 2007.

"The dramatic, near free-fall in the Bay Area's median sale price in recent months stems mainly from the shift toward more sales occurring in lower-cost inland markets. At the same time, the role of foreclosures continued to grow across the region, adding more downward pressure to the median," said John Walsh, MDA DataQuick president.

He added: "What happens next to housing will be determined by the fate of the economy, and especially the job market, as well as the outcome of recently announced efforts to curb foreclosures."

Foreclosures tend to sell at a discount and are usually concentrated in a county's more affordable neighborhoods.

Last month 44.8% of all existing homes sold in the Bay Area had been foreclosed on at some point in the prior 12 months, up from 41.9% in September and 8.2% a year ago.

At the county level, foreclosure resales ranged from 10.6% of resales in San Francisco to 68% in Solano County. In the Bay Area's other seven counties, October foreclosure resales were as follows: Alameda, 41.1%; Contra Costa, 58.9%; Marin, 17.2%; Napa, 45.6%; Santa Clara, 36.4%; San Mateo, 21.6%; Sonoma, 49.7%.

MDA DataQuick is a division of MDA Lending Solutions, a subsidiary

of Vancouver-based MacDonald Dettwiler and Associates. MDA DataQuick

monitors real estate activity nationwide and provides information to

consumers, educational institutions, public agencies, lending

institutions, title companies and industry analysts.

In October, use of FHA-insured mortgages allowing a down payment of as little as 3% grew to 20% of Bay Area home purchase loans - a record in DataQuick's statistics and up from less than 1.0% a year ago. At the same time, use of larger mortgages known as "jumbo loans," common in higher-cost coastal neighborhoods, continued to fall. Before the credit crunch hit in August 2007, 62% of Bay Area sales were financed with jumbos, then defined as over $417,000. Last month just 25.6% of purchase loans were over $417,000.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,767 last month, down from $1,890 the previous month, and down from $2,999 a year ago. Adjusted for inflation, current payments are 31.9% below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 48.8% below the current cycle's peak in June 2006.

Indicators of market distress continue to move in different

directions. Foreclosure activity is at or near record levels, financing with adjustable-rate mortgages is near the all-time low, as is financing with multiple mortgages. Down payment sizes and flipping rates are stable, non-owner occupied buying activity appears flat but might be emerging, MDA DataQuick reported.

manybanking.com has the best rates

Calculators: Access to our Savings, Mortgage, Auto Loan and Personal Finance Tools.

green arrowFinancial Resources