ShareThisBay Area home prices are still falling, but the pace slowed significantly in March, extending a trend that is beginning to foster real hope that the market is approaching the bottom.
The median sales price across the nine-county region stood at $295,000 for existing single-family homes last month, a 46.3 percent drop from a year ago but off just 0.5 percent from February, MDA DataQuick of San Diego reported Thursday.
That month-to-month price change has been narrowing recently. The median declined 2.4 percent in February compared with the previous month and 7.9 percent in January. The biggest recent drop was 11.1 percent in September. Year-over-year price declines have floated around 47 percent for the past five months.
"It's very meaningful because it means that we're finding the floor for median home prices," said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange. "I believe now that with the continuation in the strength of home sales and improvement in affordability, we will be very near the bottom in the next few months."
For the first time in more than a year, the California Association of Realtors in February reported small month-over-month price increases in Alameda, San Francisco and San Mateo.
The median may be starting to stabilize because buyers are finally nudging down inventory levels, Adibi said. The combination of home prices falling to the lowest level in nearly a decade and 30-year fixed-rate mortgages rates dipping below 5 percent has lured people back into the market, he said.
DataQuick analyst Andrew LePage said the direction of the figures over the past few months justifies cautious optimism.
"We're not saying, 'Look here, we've bottomed out,' " he said. "We're saying, 'We're seeing some of the signs you'd expect to see in a market where prices are starting to stabilize.' "
Whether it lasts will hinge on how the economy fares in coming months, specifically the number of job losses and foreclosures, he said. A spike in either could easily overtake any nascent recovery.
For now, the number of distressed properties continues to rise in California. The state's first-quarter foreclosure activity, which includes default notices, auction-sale notices and bank repossessions, jumped 36 percent from a year ago, to 230,915, according to a report from RealtyTrac of Irvine released Thursday. That equates to the nation's third-highest foreclosure rate, with one in every 58 housing units receiving such a filing.
A total of 4,808 existing, single-family homes traded hands across the region in March, up 49 percent from a year ago, DataQuick said. It's the seventh consecutive month that sales volume has climbed.
But the trends vary dramatically by region, with sales slowing or flat in high-priced counties like Marin, San Francisco and San Mateo and surging in low-cost ones like Solano and Contra Costa. This split is swaying the course of prices as well. San Francisco continued to hold up best in March, with the median off 24.2 percent, at $626,500. Contra Costa County is still faring the worst, with prices down 47.4 percent at $215,000.
Industry observers attribute the slow sales and relative price stability in coastal markets to several factors: It's more difficult to secure the "jumbo" financing needed to purchase expensive homes, fewer buyers have the necessary equity or career confidence to "move up" to those markets and not nearly as many owners there face foreclosure or other financial pressures to sell quickly or at a loss.
On the flip side, distressed sales are electrifying transactions in outlying areas, with sales up 134.1 percent in Solano County and 90.4 percent in Contra Costa County, according to DataQuick. In fact, foreclosures and a surge in investor interest are generating heated competition in many instances, real-estate agents say.
"In bank-owned homes, if you find a good deal, it's almost always a multiple-offer situation," said Joe Metz, a Realtor with RE/Max Active Realty in Fremont.
(E-mail the writers at jtemple(at)sfchronicle.com and csaid(at)sfchronicle.com.)
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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