Home sales in the Bay Area continued to climb in March, as the median price continued to fall. However a real estate information service observes the steep drop in the median price slowed significantly, and could indicate the market might be near its price bottom.
MDA DataQuick reports 6,325 new and resale houses and condos closed escrow in the nine-county Bay Area in March, an increase of 25.7 percent from February and up 29.1 percent from March 2008. The median price for all new and resale houses and condos dropped to $290,000 last month, down 45.9 percent from $536,000 in March of 2008.
Santa Clara County home sales rose 16.6 percent in March, from the same period a year ago. The median price for a Santa Clara County home in March was $390,000, down 37.1 percent from $620,000 in March of 2008.
The MDA DataQuick report attributes the drop in the median price more to the sluggishness of high-end sales, which are now under-represented in the statistics, than to the decline in value of the typical Bay Area home.
"The Bay Area is waiting for so-called jumbo loans to come back on line. Even with prices off their peaks, most home purchases in the upper half of the market still require a mortgage for more than $417,000, which are far more difficult to come by," said John Walsh, MDA DataQuick president. "We think there's a good chance those larger loans will become more available during the second or third quarter."
Mortgages for more than $417,000 were used to finance 19 percent of the Bay Area's home sales last month, compared with more than 60 percent before the credit crunch hit in late summer 2007. The use of government-insured FHA loans is now a common choice among first-time buyers, representing a record 25.4 percent of all Bay Area purchase loans in March, up from 1.5 percent a year ago.
Today's market conditions, loan options and government incentives offer tremendous opportunities for all buyers, according to Julia Keady, president of the Silicon Valley Association of REALTORS®.
Keady, who is a REALTORS® with Alain Pinel Realtors in Palo A lot, said, "There are very good opportunities out there for first-time home buyers. Moving up is also a great idea right now. If you are thinking of moving up, prices are down slightly, which will allow you to buy a right-sized home and save on property taxes."
"Buyers can take advantage of the superior interest rates available now, which will save them many thousands of dollars over the life of their loan," Keady added.
DataQuick MDA reports the typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,245 last month, down from $2,553 a year ago. Last month's typical mortgage payment, which assumes 20 percent down and a 30-year fixed-rate mortgage, was the lowest since February 1997 when it was $1,236.
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 email or call the SILVAR office at (408) 200-0100.