In December 2008, about half of the 5,171 existing houses sold in San Francisco Bay Area, California were foreclosures. Because of the increase in California foreclosures, home buyers flock to the Bay Area to take advantage of bargain prices.
According to research firm MDA Dataquick’s real estate report, existing single-family houses in the region’s nine counties have a median price of $330,000, representing a 46.8 percent decline from figures of the previous year.
The median market price for all houses, including new homes and condominiums, also declined by to 43.8 percent to $330,000.
The December total of all existing houses increased by a percentage of 69.6 from the 2007 total of 3,049.
Meanwhile, counties with high foreclosure rate in the region have experienced an increased in sales volume. About 1,384 existing houses were sold in Contra Costa, representing an increased of 152.6 percent compared with the December 2007 figures of 548.
In Solano, 623 existing houses were sold, representing a percentage increase of 185.8 from the 2007 figures of 218.
According to the real estate report, each county in the region has experienced double-digit decreases in median prices due to the rapid increase in foreclosures. It estimated that the decline in existing homes’ median price in Contra Costa was 48.4 percent and 11.8 percent for the city of San Francisco.
The median price indicates the point in which 50 percent of the houses were purchased for more and the remaining half for less. However, it does not reflect the change in market values of homes but rather the composition of houses sold.
MDA Dataquick President John Walsh explained the possibility that half of the decrease in the median market price is an issue of market mix and the remaining half a decline in value.
On the other hand, some experts noted that an increasing number of banks are unloading foreclosure properties at bargain prices. Lawton Associates realtor Stephen Bloom said that 100 percent of bargain deals involved bank-owned distressed properties.
Bloom cautions home buyers on purchasing foreclosed properties, saying that these deals have no or lack disclosures.
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