San Francisco Foreclosure Homes Drove Sales amid High Prices

by Peter Vernon on cities

San Francisco foreclosure homes have been driving house sales in the area, but the sale prices are still relatively high and a huge percentage of homes in the area are still not affordable to median-earning families, according to the Urban Land Institute Terwillger Center for Workforce Housing, the Rosen Consulting Group and the San Francisco Association of Realtors.

The current home sales price median in the city of San Francisco is $765,120, despite the prevalence of bank foreclosure home units in the market, according to an online real estate firm.

In December 2009, when total home sales also increased, the median sales price for a detached single-family house in the city of San Francisco was still high at $755,608, an 8-percent jump from the median in December 2008.

The sales price median for condos was also still high at $672,590 in December last year, an increase of 7.6 percent over the December 2008 price and the first price increase for condos since July 2008.

According to the Center for Housing, despite the 40-percent decline of home prices over the past three years largely due to record numbers of San Francisco foreclosure homes, residential properties in the area are not still affordable to most families. The center reported that only 20 percent of homes in the Bay Area are affordable to households earning 110 percent of the median income in the area, which is around $100,000 for a four-member household.

Former HUD Secretary Henry Cisneros said that although the 20-percent affordability level marked an improvement over the 6-percent level in 2007, housing affordability is still a problem in the area.

California foreclosures have pulled down home prices in many areas of the state and have even pushed majority of homeowners underwater in certain areas, but prices in the city of San Francisco and most other parts of the Bay Area have held up.

While the percentage of underwater homeowners in the Vallejo-Fairfield in Solano County is record high at 61 percent, the percentage of underwater borrowers in the Bay Area is only 10.4 percent, the lowest level in the region. The underwater percentage in the Oakland area, Santa Rosa area and San Jose area are 35 percent, 31.8 percent and 21.8 percent, respectively.

Despite the preponderance of San Francisco foreclosure homes, just 15 percent of homes in the area are affordable to working households, far below the 60-percent average affordability level in peer metro regions like Boston and Washington, D.C.

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