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| September 17, 2004 |
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Foreclosure rates are low, speculators have backed off, the weather is balmy and home values are up more than 16 percent in the past year. Home buying remains a thorny issue in the high-cost, nine-county San Francisco Bay Area, but once you are in the door everything seems to come up roses. In the past year, home values have risen from a median $447,000 in August of last year to $520,000 now -- a new record high, according to La Jolla, CA-based DataQuick. Marin County listed the area's highest median price for all housing, $717,000 with the city and county of San Francisco in second place at $668,000. San Francisco racked up the largest year-to-year price increase -- 20.1 percent, but lower cost counties including Solano (19.7 percent), Sonoma (19.1 percent) and Alameda (18.3) played serious catch up. And there's more good news for homeowners in the technology economy-beleaguered region. "While current sales are a bit off the June peak, it can't really be said that the market is turning when we've just had the third-highest sales count in at least sixteen years as well as a new price peak. With today's demand, we may well see sales and appreciation stay strong through the rest of the year," said Marshall Prentice, DataQuick president. Despite tough economic times at the region's technology Ground Zero -- Silicon Valley, where single-family detached home prices are up "only" 13.2 percent for the year and down $15,000 in the past month -- home buying remains the regional economy's favorite pastime. How so? When considering a purchase, home buyers in high-end markets tend to look at the monthly cost of housing -- what their paycheck will afford each month -- rather than rising median prices. Low interest rates keep buyers looking. The typical monthly mortgage payment for Bay Area buyers was $2,341 in August, down from $2,361 in July and up from $2,092 a year ago, DataQuick reported. "The fed rate hikes actually helped lower rates on home loans. A move to tighten or hike rates by the Fed is designed to slow inflation, and tempering inflation is very good news for bond holders or mortgage lenders. With inflation reduced, the buying power of their future returns will face less erosion from the effects of inflation," Sonoma County real estate and loan agent Ginger Hopp reported to RealtyTimes.com's Market Conditions Report. "The condo median just broke the $400,000 barrier (in Silicon Valley). It's almost impossible to find a single-family detached home at that price. First-time home buyer programs do not apply to price points for single-family dwellings. That could help drive condo prices," said John V. Pinto, a Realty World broker in San Jose. A total of 12,674 new and resale houses and condos were sold in the nine-county region in August, up from 12,488 for August last year, DataQuick reported. DataQuick said market distress indicators were largely absent in August in the San Francisco Bay Area where foreclosure rates are low, down payment sizes are stable and a slight increase in flipping (buying and quickly selling for a profit) rates earlier this year has now leveled off. "The strong sellers market continues in the city of San Francisco. There are many buyers in the market attracted by relatively low interest rates and the opportunity to own a home in one of the best cities in the world," Jane Mermelstein of Zephyr Real Estate reported to RealtyTimes.com's Market Conditions Report. |
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