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Bay Area Home Sales Up in February

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

LA JOLLA, Calif. ( DQNews) -- Last month's Bay Area home sales bounced up a bit more off bottom, fueled in large part by investors with cash who were buying discounted properties in the lower half of the price spectrum. The median price paid for a home dropped year over year for the 17th month in row, a real estate information service reported.

A total of 5,702 new and resale houses and condos sold in the nine-county Bay Area in February. That was up 4.1% from 5,479 in January, and up 14.2% from 4,991 in February 2011. The year-over-year sales increase was the eighth in a row, according to San Diego-based DataQuick.

"The market is still strange, just a little less strange than it was. We also need to keep in mind that, when it comes to statistical trends, February is the least typical month of the year. Over the winter you're left with a higher concentration of investors and people who must buy or sell because of a major life event.

"In the spring, when many traditional buyers return, we'll get a much better read on the market. Meanwhile, many potential buyers are still waiting for the lending spigot to open more. Drum-tight credit conditions continue to undermine housing, along with negative equity and the various uncertainties plaguing would-be buyers," said John Walsh, DataQuick president.

The median price paid for all new and resale houses and condos sold in the Bay Area last month was $325,500. That was down 0.3% from $326,000 in January, and down 3.6% from $337,250 in February 2011. The median has declined on a year-over-year basis every month since October 2010.

Last month distressed property sales -- the combination of foreclosure resales and "short sales" -- made up about half of the Bay Area's resale market.

Foreclosure resales -- homes that had been foreclosed on in the prior 12 months -- accounted for 27.4% of resales in February. That was up from a revised 27.2% in January, and down from 32.6% a year ago. Foreclosure resales peaked in the current cycle at 52.0% in February 2009. The monthly average for foreclosure resales over the past 15 years is about 9%.
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