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Sales of High-end Homes in Bay Area are Up, Median Price Tops $400K

Wednesday, June 23, 2010

Sales of mid- to high-end homes rose across the Bay Area in the month of May, pushing the median sale price for the region to over $400,000 for the first time in 21 months. Tax credits, low mortgage rates and an ample supply of homes for sale boosted the $500,000-plus market, according to a real estate information service.

A total of 8,264 homes closed escrow last month in the nine-county Bay Area, up 18 percent from April and up 11 percent from May 2009, according to MDA DataQuick. The sales tally was the highest for the month of May since 9,935 homes sold in May 2006.

Sales of homes priced over $500,000 rose 33.8 percent from the same period last year, while sales of homes priced below $300,000 fell nearly 22.7 percent below the year-ago level. Last spring, sales of these homes were unusually high due to many low-cost inland foreclosures. This year in May, foreclosure resales fell to 27.3 percent of the Bay Area's resale market, the lowest since April 2008 and down from 40.5 percent in May 2009. Foreclosure resales peaked at 52 percent in February 2009.

The median paid for all new and resale houses and condos combined jumped to $410,000 last month, up 10.8 percent from $370,000 in April and up 20.1 percent from $341,500 in May 2009. The median has increased on a year-over-year basis for eight straight months.

The May median's annual gain can be attributed to the decline in foreclosure resales, price stability and modest price pressure in some areas, and the shift toward more high-end sales. Activity has picked up in the higher-cost areas in part because distress has increased over the last year and sellers have become more motivated and realistic, according to the DataQuick report.

Last month 40.7 percent of the homes sold in the Bay Area were priced $500,000 or above, up from 36.9 percent in April and up from 31.3 percent a year ago. Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 35.1 percent of last month's purchase lending, up from 31.5 percent in April and 25.8 percent in May 2009. Adjustable-rate mortgages (ARMs) made up 13.1 percent of all home purchase loans, up from 11.1 percent in April and up from 3.5 percent a year ago. May's ARM level was the highest since September 2008, but still well below the monthly average ARM rate of nearly 50 percent over the last decade.

High-end sales could be stronger if jumbo and adjustable-rate mortgages were easier to obtain, according to Jeff Bell, president of the Silicon Valley Association of REALTORS®.

"We have seen some loosening in the jumbo high-end mortgages, which is important to most Bay Area markets, including Silicon Valley. Interest rates continue to remain at record low levels, but we need a healthier job market so families can feel more confident about purchasing homes," Bell said.

In the nine-county Bay Area, Santa Clara County had the highest volume of sales in May compared to the same period a year ago. Sales of all homes in the county rose 28.20 percent, from 1,688 in May 2009 to 2,164 last month. San Mateo County home sales rose 24 percent; San Francisco, 23.7 percent; Marin County, 20 percent. Sales were down 7.60 percent in Solano County and down 4.90 percent in Sonoma County.

The median price paid for all new and resale houses and condos combined in Santa Clara County jumped 18 percent from the same period last year, from $445,000 in May 2009 to $525,000 in May 2010. Experiencing the biggest jump in median price was Contra Costa County, where the median rose 25.30 percent from the same period a year ago, to $293,750.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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