San Francisco Area Home Prices Jump to a Four-Year High

The median home price in the San Francisco Bay area climbed to the highest level in almost four years as more expensive properties made up a larger portion of transactions, according to DataQuick.

The median paid last month was $421,000, up 1 percent from June and 13 percent from a year earlier, the San Diego-based data firm said today in a statement. It was the highest for the nine-county region since $447,000 in August 2008. Sales rose on a year-over-year basis for the 13th straight month.

Across California, housing has been buoyed by consumer sentiment and low mortgage rates, with coastal areas like San Francisco and West Los Angeles showing the biggest price advances, Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California, Los Angeles, said in a telephone interview. Inland cities still have widespread negative equity, with many homes valued at less than their mortgage balances, he said.

The median price statewide rose almost 12 percent from a year earlier to $281,000, the highest since September 2008, DataQuick said today in a separate report. Foreclosure deals made up 22 percent of transactions, the smallest share since November 2007, the company said.

“Housing has bottomed and, in fact, has turned,” Gabriel said. “The coasts are among the hottest markets in the country. Underwater homes are a limiting factor, but as prices rise they will naturally bring forward new inventory and a willingness by owners to market properties.”

‘Big Challenges’

Buyers in “mid- and move-up markets” fueled the price gain in the Bay Area, with properties offered at $500,000 or more accounting for 42 percent of total sales, up from 36 percent a year earlier, DataQuick President John Walsh said. Mortgage availability “remains one of the big challenges in the Bay Area,” he said in the statement.

Distressed deals in the Bay Area including foreclosures and short sales, where the purchase price is lower than the loan balance, made up almost 35 percent of transactions, down from 37 percent in June and 45 percent a year earlier, according to the company.

Purchases financed by adjustable-rate mortgages were used in 13 percent of Bay Area deals in July, down from 14 percent both in June and a year earlier. Since 2000, those loans have been used in almost half of all home purchases in the region, DataQuick said.

Sales totaled 8,461, up 23 percent from July 2011.

San Francisco tops a list of U.S. metropolitan areas with improved residential markets, based on price gains, inventories and foreclosures, according to data compiled by Bloomberg.

To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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