From: SF Gate

Robert Selna, Chronicle Staff Writer
Friday, May 21, 2010

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 Thursday.

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 2009. Their median price was $400,000, up 30 percent from the prior year's $307,434.

The mix of transactions shows that foreclosures - the April sales of homes that lenders had foreclosed on in the prior 12 months - made 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 $417,000 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.

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