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 median price for all new and resale homes throughout the nine counties in June was $417,000, up 10.4 percent from a year earlier, according to DataQuick, a San Diego real estate service. That was the highest since August 2008 and a big jump from the trough of $290,000 in March 2009, but still far short of the peak of $665,000 in the summer of 2007.

“This reflects a market that’s slowly moving back toward normalcy,” said Andrew LePage, a DataQuick analyst. “The bulk of the regional and countywide gains in median is the result of fewer foreclosures and other lower-cost homes selling and more mid- to high-priced homes.”

Decline in values

About half of the median’s drop over the real estate downturn came from a different composition of homes sold (more low-end homes results in a lower median), while the other half came from a decline in home values, DataQuick said.

Distressed sales – foreclosures and short sales in which homes are sold for less than what is owed on the mortgage – continued to decline. Distressed sales were 36.1 percent of the resale market, compared with 44.3 percent a year earlier.

The distressed sales were almost evenly split between foreclosure resales (18.1 percent) and short sales (18 percent). At their peak in February 2009, foreclosures accounted for 52 percent of resales, DataQuick said.

The 8,577 homes that sold in the month was up 7.2 percent from a year earlier, DataQuick said.

Real estate agents continue to report that inventories are low in the Bay Area, which increases buyer competition and drives up prices. Properties are selling much more quickly than in the past.

“We usually have a two-month agreement with clients, which gives them a nice marketing period to have our items in a home,” said Jeff Schlarb, owner of Green Couch Interior Design and Staging, which decks out for-sale homes to show them to their best advantage. “But now we’re seeing places sold in three weeks. It’s a big change from a year ago.”

Absentee buyers

Investors continue to be a potent market force. Absentee buyers bought 23.4 percent of Bay Area homes in June, up from 20 percent a year ago, paying a median of $270,000. Buyers paying all cash represented 27.5 percent of sales, up slightly from a year ago.

As always, market health varies tremendously by area.

“In part of the Silicon Valley, at least some of the increase in median reflects price pressure,” LePage said. “You’ve got a thin inventory of homes for sale and a fair number of people chasing them.

“Across the market, more and more neighborhoods are at least stable and some are inching up, while some remain weak. In some neighborhoods, if you get two more foreclosures on your street and they’re both dilapidated and the seller is anxious – those are scenarios where prices are still pretty soft.”

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

Article source: http://www.sfgate.com/realestate/article/Home-sales-prices-up-in-Bay-Area-in-June-3717559.php