Bank Owned Homes Sale Still a Hot Market in Bay Area

by on Foreclosure Crisis

Luxury homes are starting to sell in San Francisco Bay Area, California. The area’s real estate market, which was once dominated by bank owned homes sales, is seeing its median price increased by 12.3 percent last month from the previous month.

Industry experts believed that the slow pace of property sales on a year-to-date basis was a reflection that sales in May included luxury homes.

However, real estate specialists pointed out that the struggling housing market devastated by large volume of bank owned homes sales is in the worst condition this year compared with the previous year. This means that there is no guarantee that median prices of homes will continue to rise.

Real estate specialists also believed that while bank owned homes sales accounted for only a small portion of the current real estate market, the expected second wave of foreclosures in the coming months due to resetting of mortgages and rising unemployment, will place repossessed homes again in the forefront of the market.

Market data showed that last month’s median price rose to $341,500 from $304,000 the previous month. However, the median price was 33.9 percent lower from the May 2008 price of $517,000.

Also in May, foreclosure properties accounted for 42.1 percent of the total existing homes sales, representing a 46.4 percent decline in April. The decline was the lowest since the September 2008 drop of 41.6 percent.

The April to May median price increase was partly attributed to the availability of jumbo mortgage loans that were more than $417,000.
The increase availability of jumbo financing has benefited some areas in the region, particularly in Contra Costa County where the median home price rose to $234,500 in May from $225,000 in April. The positive impact of jumbo financing was felt in the housing market of Walnut Creek, Orinda, San Ramon and Alamo.

On the other hand, the median home price in Alameda County varies among communities, with some rising to $330,000 from $289,000 while prices in the Alameda city decline from $581,000 in April to $550,000 in May.

The April to May median home price increase in the Bay Area marked the second consecutive month that prices increased in the housing market once dominated by bank owned homes sales.

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