Bay Area home sales and prices up in March

There is a lot to interpret when reading any article about real estate and the one below is certainly no exception. But what can't be denied is that activity is certainly up on the Coast and in the Bay Area. What's different here on the Coast is that we're seeing a spike in the percentage of REO's being purchased instead of a decrease (but that should change soon with the depletion of a group of REO's). The deals that are happening do seem to have a larger percentage of cash than in the past, as is seen in other areas.

Article By ROBERT DIGITALE of THE PRESS DEMOCRAT

Bay Area home sales and prices jumped in March, but analysts largely discounted the changes as the result of the annual spring selling season and an increase in purchases of higher-end homes.

March sales jumped 40 percent from February to 6,992 new and existing homes and condominiums in the nine-county Bay Area, according to MDA DataQuick of San Diego. Sales were up nearly 11 percent from a year ago.

The median price climbed 7 percent from February to $380,000. That amount was 31 percent higher than a year ago when the price reached $290,000, a low point in the Bay Area's current housing cycle.

The increase in sales and median price was expected. March sales typically exceed February, though the March 2010 sales still were 22 percent short of the 22-year average for the month.

Similarly, the median price a year ago was affected by a lopsided number of home sales in inland areas that had been hard hit by foreclosures, DataQuick reported. Last month, nearly 35 percent of Bay Area sales were of homes above $500,000, compared to 24 percent a year ago.

“While March's big annual gain in the regional median tells us a lot about what's changed in the market, it shouldn't be viewed as evidence of surging home values,” said John Walsh, MDA DataQuick president.

Walsh called the results “a statistical quirk.” The data indicates that prices in many communities “have more or less flattened out or risen modestly, while they remain soft in others,” he said.

In general, the Bay Area is still impacted more by the credit crunch than many other markets, he said.

“It's tougher to get the ‘jumbo' mortgages and adjustable-rate financing that had long been staples there. Looking ahead, stability in the housing market will rely more heavily on a strengthening economy.

“Government housing stimulus is fading,” Walsh said, “and there are threats from higher mortgage rates, more distressed properties hitting the market and continued job losses.”

Foreclosure resales – homes that had been foreclosed on in the prior 12 months – made up nearly 32 percent of the resale market in March. That compares with 50 percent a year a ago.

Absentee buyers – mostly investors – purchased nearly 18 percent of all Bay Area homes sold. Buyers who apparently paid all cash – meaning there was no corresponding purchase loan found in the public record – accounted for nearly 25 percent of sales.