Friday, May 23, 2008

SF Bay Area's Spring Sales Boom

Lower home prices, lower interest rates for large loans and lower down payment requirements provided a sales boost for the San Francisco Bay Area's spring housing market.

by Broderick Perkins
© 2008 DeadlineNews.Com

Deadline Newsroom - 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.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

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