The median price of $540,000 paid across the nine-county region was up 31.7 percent from a year earlier, said DataQuick of San Diego. Meanwhile, the 8,616 new and resale homes and condos that changed hands in August were 0.6 percent shy of the number sold in August 2012.

“No matter which price gauge or index you look at, prices are up a lot – much more than people had expected,” said Andrew LePage, a DataQuick analyst. “The median has been up around 30 percent (compared with the previous year) for the past five months, but I don’t expect that this rate of increase will continue much longer.”

Several trends should soon slow the growth, including rising mortgage interest rates, more homes for sale, fewer cash-paying investors, and dwindling of bargain distress sales.

More homes to see

Real estate agents said that rising inventory is quite apparent.

“I’m definitely starting to see more houses for sale,” said Corey Weinstein, an agent with Red Oak Realty in the East Bay. “The brokers’ tour list for this week was bigger. The Sunday open house guide was a lot longer. There’s an optimism among buyers that there is a lot more out there to see.”

One result is that bidding wars, while still a factor, now involve just a handful of potential buyers, rather than a dozen.

Increasingly more homeowners are finding out that the math works out for them to sell now.

Graham Humphreys and Anissa Burnley are listing their three-plus bedroom Cape Cod-style home near Oakland’s Glen Echo Creek, close to lower Piedmont Avenue and Adams Point.

“We bought the house in 2005 at the peak of the market,” Humphreys said. “It’s a beautiful house that we absolutely loved, but in the interim, like a lot of people, we had our time of being underwater, our time when we might have wanted to move but couldn’t sell.”

Better for buyers

Now as they seek more space for a growing family, they’re able to put it on the market, asking $679,000, a bit more than the $644,000 they paid.

“In the space of a couple of years, it’s gone from a relatively dire situation for many of us to an opportunity for both the sellers and buyers,” Humphreys said. “Everything has changed.”

For home buyers who’ve faced frustrating bidding wars and dearth of inventory, the increase in for-sale listings is welcome news.

“Home shopping should be much more enjoyable this fall than it was earlier in the year,” LePage said. “People will still bemoan the increase in prices, but there will be more homes to choose from. The typical home buyer won’t feel as rushed.”

Around the Bay Area some of the biggest price increases were in lower-cost counties. Solano County saw the median jump 46.1 percent, albeit starting from a low base. It is now $277.500. Contra Costa’s median was up 40.9 percent to $420,250.

The rising prices helped fuel another trend: Condo sales hit an eight-year high for the month of August with 1,960 changing hands at a median price of $445,000.

Lower-priced condos are typically a way that first-time buyers get a foothold in the market when they’re priced out of single-family homes in their desired area.

As is normal in the late summer, both price and sales dipped in August compared with the previous month. The median was 3.9 percent short of July’s $562,000 median, and sales were down 7.7 percent from July.

Home values increase

About three-quarters of the median’s rise stemmed from an actual increase in home values, with the remainder being due to a changing market mix.

Distress sales were less than half the level of a year ago. Foreclosure resales accounted for 4.6 percent of August resales (the same as in July) versus 14.5 percent a year earlier. That 4.6 percent is the lowest share since August 2007, just before the credit crunch hit.

Short sales, or homes sold for less than is owed on the mortgage, were 10 percent of resales, down from 23.3 percent in August 2012.

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

Article source: http://www.sfgate.com/realestate/article/Bay-Area-home-sales-subside-but-prices-increase-4813295.php

“San Francisco jumped to the No. 1 position in the country” for office real estate performance, said Colin Yasukochi, vice president of research at Jones Lang LaSalle and author of one of the reports. “Technology companies are the underlying driving force in the San Francisco market. It’s recovering very quickly” from the economic downturn.

He shows the city’s average asking office rent at $40.06 per square foot, up from $33.71 a year ago.

Over the past four quarters, about 1.3 million square feet of space was absorbed by tenants, “the best four quarters since 2008, which was the peak of the market,” Yasukochi said. While the vacancy rate overall is still a relatively high 16.2 percent, in hot neighborhoods such as South of Market, it’s only 6.9 percent, he said.

Chris Macke, senior real estate strategist for research firm CoStar Group in Washington, agreed that San Francisco is bouncing back.

“You folks have seen steady rental-rate increases for effectively every quarter since early 2010, whereas nationally they’re still having rental-rate decreases,” he said. “In the second quarter, San Francisco had the largest rental-rate increases, going up 4.4 percent compared to the first quarter. That’s very, very strong, far better than anywhere else in the country.”

Part of the dynamic is that San Francisco tends to be volatile, as supply is constrained for the most sought-after, higher-quality “creative” spaces. “It’s a market that is prone to greater increases and decreases; it acts like a tightly wound rubber band,” Macke said.

Bright outlook

The San Francisco metropolitan area, which includes San Mateo County, was also on top for rent increases between the first and second quarter in a report from research firm Reis.

“I think the outlook for San Francisco is relatively bright,” said Ryan Severino, an economist at Reis. “We expect to see fairly robust rent growth there this year.” Both Oakland and San Jose metro areas also are benefiting from increased office demand, Reis found. It ranked San Jose fourth in the nation for rent increases and the East Bay ninth.

Tech firms increasingly are branching out from SoMa into downtown, previously the domain of more traditional companies.

‘The hustle and bustle’

“We like the hustle and bustle of the Financial District,” said Alex Mehr, co-founder and co-CEO of online dating site Zoosk Inc., which signed a lease in the second quarter for 21,391 square feet at 475 Sansome St. It already was subletting the space from Yahoo.

“Software companies prefer SoMa because they hire a lot of Java developers who live in the South Bay and so (being near) Caltrain is an advantage,” Mehr said. “But we’re a Web company and our developers live in San Francisco, so the Financial District is a much easier commute for them.”

Zoosk went from about 20 employees 18 months ago to almost 90 now. Mehr expects the staff to double annually, so the company will soon outgrow its current location. Rising rents don’t concern him too much.

In the heart of the city

“The advantage of being in the heart of San Francisco with quick access to BART and having all that action all around us outweighs any increase in prices,” he said.

Meade Boutwell, senior vice president with broker CB Richard Ellis, recently represented a downtown building that remodeled a 3,000-square-foot space specifically to lure tech tenants.

“The Mills Building at 220 Montgomery is one of the oldest buildings downtown, it’s a classic that survived the 1906 earthquake,” he said. “It’s class B space with traditional dropped ceilings. We tore out the ceilings, exposed the raw concrete, brick and piping, which made it very creative-looking. The tech tenants that all wanted SoMa in 2000 said they loved the feeling of the space; we had nine offers.” A tech company leased the space for $41 per square foot, a premium from its $35 asking price. Now the owner plans to do a similar rehab elsewhere in the building.

Executives at Starwood Property Trust, a real estate investment trust based in San Francisco, said they are bullish on the city.

“San Francisco has held up better than most markets,” said Chris Tokarski, managing director and chief credit officer. “In particular the tech growth is creating more pressure and space is leasing up quicker. You can say that about apartments, retail and office. It clearly is seeing growth on all fronts.”

E-mail Carolyn Said at csaid@sfchronicle.com.

This article appeared on page D – 1 of the San Francisco Chronicle

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/07/08/BUUK1K7QG3.DTL&type=tech