It’s a normal life transition – but one that would have been unavailable to him just a year ago, when his home was underwater. Now, with the Bay Area real estate market on a rapid upward trajectory, Walawitch, 62, should be able to sell his three-bedroom, two-bathroom home at a decent profit.

“This is my dream, it will provide me with the down payment for my retirement home,” he said. “I was quite concerned (during the housing downturn); I didn’t know how long I’d have to stay in the house. I’m very happy the market has turned.”

Sale prices of Bay Area homes surged in 2012 at a pace that accelerated throughout the year, according to DataQuick, a San Diego research firm. In December the nine-county median rose to $442,750, an astounding 32 percent increase compared with the prior year – the highest jump in 25 years of record keeping, DataQuick said Wednesday.

That benchmark is heavily influenced by a changing mixture of homes sold. About half of the increase represents higher values, while the other half stems from fewer bargain-priced distress sales and more high-end homes changing hands.

Foreclosures dropping

Foreclosures and short sales comprised about a third of the resale market in December; a year earlier, they were 52.4 percent of sales. The number of homes sold for more than $500,000 rose 61.2 percent, while the number sold for less than $500,000 fell 12.6 percent compared with a year earlier, DataQuick said.

“This absolutely does not mean the typical house in the Bay Area is up 32 percent compared to last year,” said DataQuick analyst Andrew LePage.

Beating previous year

However, 2012′s strong sales do show a market that is finally in recovery after the carnage of the housing collapse. From April on, Bay Area median sales prices consistently outshone those of the prior year; from June through December they outperformed 2011 by double-digit percentages.

“We’ve had a sustained buildup,” LePage said. “There is real price appreciation, particularly in the more-desirable coastal markets with a lot of demand meeting very little inventory.”

A total of 7,832 new and resale homes and condos changed hands in the nine-county Bay Area in December, up 4.5 percent from a year earlier. Realtors throughout the region report that inventories remain super-tight and many homes attract boom-style bidding wars.

December marked “the 20th consecutive month of a decline in inventory,” said Glen Bell of Better Homes and Gardens Mason McDuffie Real Estate, speaking of data for Alameda and Contra Costa counties.

The East Bay now has a two-week supply of homes for sale (meaning the existing inventory would sell out in two weeks at the current sales pace), the lowest he has ever seen, Bell said. Ordinarily it should have a three- or four-month supply.

Investors jumping in

“There is so much (buyer) competition for so few properties out there that people are scrambling to try to get in,” he said. “If a home looks good, is in an area people want to live in and is priced right, you get multiple offers all over the place.”

Even properties that don’t meet those criteria win popularity contests. Bell recently listed “a little, tiny, dinky fixer,” a bank-owned foreclosure in a “not great area of Richmond,” priced at $72,000, and received 32 offers, six of them north of $100,000. Every offer was for all cash, implying they were from investors. It went into contract this week for about two-thirds above the asking price.

All that competition – so many buyers vying over so few houses – is driving up prices. But soon it should also bring more sellers, increasing inventory, which in turn should moderate the pace of price hikes.

Correction is real

Potential sellers “are getting the sense that the market has really corrected and this is a good time to make a move,” said Rick Turley, president of Coldwell Banker Residential Brokerage, which covers much of Northern California. “The market improvement has gotten people to a point where they can transact, which they previously couldn’t.”

Will spring, the traditional kickoff for real estate’s strongest selling season, see a surge in sellers?

“We are certainly hopeful that the spring will give us the bump we need in listing inventory,” Turley said.

Looking back at the full year, 2012 saw an annual Bay Area median price of $404,000, still shy of the median a decade earlier. But annual medians – which mute some of the month-to-month spikes – paint a portrait of a market where the prices that shot up during the boom and crashed during the collapse now seem on a steadier path.

Could the rise in prices presage another housing bubble?

“I don’t think it will shoot up and crash down again,” Turley said. “The more-conservative lending will help us to stay healthy longer.”

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/realestate/article/Bay-Area-home-sales-prices-surging-4200912.php

The regions median sale price dipped to its lowest level since January as activity above $500,000 fell sharply, distressed property sales rose slightly, and mortgage availability worsened, a real estate information service reported.

A total of 16,829 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in October. That was down 7.3%

from 18,149 in September and up 0.5% from 16,744 in October 2010, according to San Diego-based DataQuick.

A separate report released on Tuesday showed California home sales posted a marginal increase in October and also were above year-ago levels.

According to figures released Tuesday from the California Association of Realtors, closed escrow sales of existing, single-family detached homes in California edged up to a seasonally adjusted 493,240 units in October, up 0.9% from a revised 488,700 in September.

The October statewide median price of an existing, single-family home sold in California was $278,060, down 3.3% from $287,440 in September and down 8.9% from the $305,150 median price recorded for October 2010, according to C.A.R.

Both reports cite the drop median price on Congress failing to act on conforming loan limits as a possible reason.

Most homebuyers use what are called “conforming” loans, or those backed by the Federal Home Administration, to purchase their homes. Congress sets the limits for these loans. The previous limits reset to lower limits on October 1. In high cost areas, the cap for these federally backed loans dropped to $625,500 from $729,750.

In short, what this means is that buyers who need a loan that exceeds the new limit are forced to obtain a “jumbo” mortgage loan, which is often considerably more expensive.

Based on preliminary analysis, it appears that the lower conforming loan limits has had a cooling effect on home sales in October, particularly in the higher cost markets across the state, such as the San Francisco Bay Area and coastal regions of Southern California, said C.A.R. President LeFrancis Arnold. This evidence supports the need for reinstating the higher loan limits while the housing market is in transition to recovery.

Long Beach area Realtor Richard Daskam, with Keller Williams Realty in Los Alamitos, said the expiration of the loan limits has already been cutting into his business.

With the expiration of the loan limits, Im not at all surprised by the numbers, Daskam said. Two of my buyers in the $750,000-range backed away and signed one-year leases on their current rentals because they felt that the decrease in the loan limits will cause home prices to fall further over the next year. Both buyers were going to use FHA loans, so it really affected their ability to purchase.

The regional median has declined year-over-year for the past eight months, according to the DataQuick report. The last time any one of the six Southland counties posted an annual gain in its median sale price was in January, when San Bernardino logged a 1% year-over-year increase.

Theres still some optimism in the market, as many buyers realize the historically low interest rates wont be around forever.

In the greater Long Beach region I’m seeing buyers with a cautious sense of optimism – the low interest rates are very attractive and (buyers have) been waiting for some time, said Helen Najar, with ReMax Real Estate Specialists in Long Beach. The buyers I’m in escrow with now feel this is as good as it’s going to get and they have moved forward to buy.

Najar and fellow real estate agents shes spoken with feel there seems to be serious concern about government’s continuing intrusion into the housing market, she said. The unexpected consequences of regulations continues to cause major roadblocks to getting business done.

Paying a median $204,000, cash buyers purchased 29.4% of all Southland homes sold in October, up from 29.2% in September, and 27.8% a year ago. Cash purchases hit a high of 32.3% of sales this February, while the 10-year monthly average is 14.5%. Cash purchases are where there was no indication in the public record that a corresponding purchase loan was recorded.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,040 last month, down from $1,084 in September and $1,111 in October 2010. Adjusted for inflation, current payments are 55.4% below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 63.4 below the current cycles peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last few years. Financing with multiple mortgages is very low, and down payment sizes are stable, DataQuick reported.

Article source: http://www.lbpost.com/news/don/12785