In the news this past April, Pleasanton Realtors were excited to find out that home prices were increasing. In his article Resale Home Prices Jump 30% in April, Robert Selna details the highs and lows of Bay Area real estate. This is great news for the Bay Area. Below is the full article:
Median resale home prices in the Bay Area rose 30 percent in April compared with the prior year, in a market that featured fewer foreclosures and more activity in higher end neighborhoods, according to a real estate report released.
Meanwhile, the total number of homes resold in the bay area- that is, not newly constructed- fell slightly year-over-year as the higher-priced sales activity could not offset declines in the more affordable areas, according to data analyzed by MDA DataQuick, a San Diego real estate research firm that produces monthly market updates.
“there were more transactions on the higher end, and even the low end is seeing a different type of sale,” said Andrew LePage, a DataQuick analyst. “Those homes are not the vacant foreclosure with the foot-high grass growing; it’s more likely the owner is living in the house and trying to work out something that does not destroy their credit.”
The decline in foreclosures follows a trend over the past few months and, in some part, may reflect the impact of federal government programs that have encouraged lenders to modify loans and facilitate short sales- in which banks allow houses to be sold for less than, or short of, what is owed on the mortgage.
A total of 5,283 existing homes changed hands in the Bay Area in April, which was about 225 fewer than in April 200-. Their median price was $400,000, up 30 percent from the prior years $307,434.
The Mix of transactions shows that foreclosures- the April sales of homes that lenders had foreclosed on in the prior 12 months- mad up 29.5 percent of the Bay Area resale market, the lowest since May 2008 and down from 46.4 Percent Year -over- Year.
At the same time, Middle- and higher- priced areas saw more action. Thirty-five percent of all homes sold in the Bay Area were priced at $500,000 or higher, up from 27 percent a year ago.
According to DataQuick, high-end sales would have been more robust if financing for larger loans was easier to obtain.
Mortgages above the conventional conforming loan limit of $417,000 comprised nearly 60 percent of all Bay Area home purchase loans before the credit crisis struck in August 2007, the research firm reported. Last month, loans of more than $417 made up just 31.6 percent.
Loan Brokers say that while banks are offering the bigger loans, they are demanding more proof that a borrower can pay.
“These loans have become more available since the beginning of 2009, but they require more documentation in order to qualify for them,” said Fif Ghobadian, a senior loan officer at Guarantee Mortgage in San Francisco. “A buyer now needs to have three things: tax returns, good credit scores and proof of assets; before they could have just one.”
Ghobiadian said she is seeing the stricter rules slow sales. they particularly are affecting the self-employed, who do not have paychecks to prove their income and who tend to take more tax deductions than other workers.
For more information on current real estate market trends contact Sonali Sethna at 925-525-2569 or sonali@sonalisells.com.
Article from SFGate.com, Robert Selna, Chronical Staff Writer. Friday, May 21, 2010.
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