Residential Real EstateWild, Wild West: SF Bay Area Looks Like A Recovering Market
Don"t celebrate an end to the housing slump just yet, but the leading-edge San Francisco Bay Area is looking pretty good this spring.
That could bode well for the nation"s housing market.
The San Francisco market is one of the Golden State"s strongest real estate sectors and, as goes California, the saying goes, so goes the nation.
According to La Jolla, CA-based DataQuick"s DQNews service, the San Francisco Bay Area"s 2008 March-to-April jump in home sales was the strongest March-to-April period in DataQuick"s history which dates back to 1988.
Why the increase in sales? Lower home prices in one of the nation"s most expensive housing markets.
The median price paid for a home in the nine-county San Francisco Bay Area was down nearly 3.5 percent during the one-month March-to-April period. April"s median price was also down a 21 percent from April last year and 22 percent from the region"s peak prices last summer.
The annual drop in home prices ranged from 5 percent in San Francisco to more than 25 percent in the less populous Solano County. In Silicon Valley, a bellwether area for the region, home prices dipped more than 13 percent.
Reduced down payment requirements and a recent drop in the interest rates for larger, so-called "jumbo conforming" loans is also a factor in improved sales in the expensive housing market.
In May, loan rates, for the new jumbo conforming loan level of up to $729,750 dropped a full percentage point, thanks to loan purchase changes at Freddie Mae and Fannie Mac.
The adjustment means a $500,000 mortgage with a 30-year fixed rate available at 7 percent in April, is now available for qualified borrowers for 6 percent.
That"s a $330 savings on the monthly mortgage payment and a real window of opportunity for many buyers.