Lower prices in the San Francisco Bay Area may be having a warming effect on the sales freeze that's hit the area this year.

In November, home sales in the San Francisco Bay Area were at a two-decade low for the third month in a row, according to La Jolla, CA-based DataQuick, a real estate information company which tracks sales of single-family and condos in both the new and resale home market.

Home sales in the nine-county area where down more than 36 percent in November, compared to November last year. Home sales have decreased on a year-over-year basis for 34 consecutive months, DataQuick reported.

What's more, November 2007 was the slowest sales month in DataQuick's record books, which date back to 1988.

But the good news is that prices are holding. The median price paid for a San Francisco Bay Area home was $629,000 in November, up 1.5 percent from the median price a year ago.

Home prices continued to gain in Marin, Santa Clara (Silicon Valley), San Francisco, and San Mateo counties. Prices slipped in Alameda, Contra Costa, Napa, Solano and Sonoma counties.

However, in some areas, price declines appear to be generating more sales, especially in the new home market where buyers negotiate for bargains.

Hard hit Solano County, for example, suffered a median home price decline of nearly 15 percent in the past year, but new home sales are up nearly 19 percent in just one month, from October to November this year.

The high-cost San Francisco Bay Area market's major problem is its reliance upon jumbo-loan financing. The availability of jumbo loan financing has declined this year.

But there's also a silver lining in the jumbo loan market. DataQuick said the percentage of jumbo loan financing was up slightly for the first time since August. That's an indicator sales could tick up in more areas -- if the cost and availability of jumbo loans improve.

Jumbo loans are loans larger than the conforming loan rate of $417,000. Because of their larger size they can be more expensive and more difficult for which to qualify.

Published: December 31, 2007

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.