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San Francisco Bay Area: Home Prices Increase, Sales Volume Declines

Reports on the San Francisco Bay Area housing market were mixed in April. According to data recently released by ""Redfin"":http://www.redfin.com/home, an online real estate brokerage, the median price for single-family homes in the Bay Area increased from March to April, but during the same period, sales volume declined.

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Redfin said the median price for Bay Area single-family homes jumped 5.5 percent in April compared to the previous month. And home prices in counties within this area increased on varying levels. In Marin County, prices for single-family homes surged 10 percent from March to April, and Santa Clara County home prices increased 7 percent. In addition, home prices in Alameda, San Francisco, and San Mateo counties inched up between 1 percent and 2 percent on a month-to-month basis.

As prices increased, sales volume fell. For all of the Bay Area, single-family home sales declined 3.7 percent from March to April, Redfin said. Sales in Alameda County plummeted 19 percent, San Francisco County sales tumbled 18 percent, and sales in San Mateo and Santa Clara counties dropped 5 percent. In the core Bay Area counties, the only increase was seen in Marin County, where sales volume rose 5 percent.

According to Gina Pio Roda, a Redfin agent in San Francisco, the decline in the number of houses sold in April was driven at least in part by California buyers delaying closings to qualify for the state tax credit beginning on May 1. ""As DSNews.com previously reported"":http://dsnews.comarticles/gov-schwarzenegger-extends-10000-homebuyer-tax-credit-in-california-2010-03-26, this tax credit is equal to 5 percent of the purchase price, up to $10,000,

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and is available to Californians who are buying their first home or purchasing a newly-built home between May 1 and December 31, 2010.

""Of the eight deals we were working on at the end of April, four pushed to May, just so our clients could save another $10,000,"" Pio Roda said.

Pio Roda said the other challenge buyers are facing is simply a lack of available inventory, as every deal has four or five buyers and sometimes goes for more than $50,000 over the asking price. She said if there were more homes to buy, there are certainly enough buyers to buy them.

According to Redfin, the number of houses for sale rose in most Bay Area counties in April compared to the month prior, but on a year-over-year basis, inventory declined. The most notable drop was seen in Santa Clara County where inventory plunged 25 percent from April 2009 to April 2010. During the same period, inventory in Marin County slumped 16 percent, and Alameda County inventory fell 13 percent. In addition, San Mateo County posted a 9 percent decrease in inventory from one year to the next, and San Francisco County inventory inched down 4 percent.

Redfin also found that in Santa Clara and Alameda counties, the median sale price was higher than the original list price, indicating that bidding wars are still the norm. In Redfin's own Bay Area business in April, offers on all property types under $500,000 faced competition 88 percent of the time, down just slightly from the trailing six-month average of 91 percent. Meanwhile, competition for mid-range and high-priced homes actually increased. Redfin said offers higher than $500,000 faced competition 81 percent of the time in April, while the trailing six-month average was 72 percent.

On the Peninsula, this competition is driving buyers from highly sought-after markets like Cupertino to more affordable areas like West San Jose, Redfin said. And in San Francisco, Redfin found that the same dynamic is driving home buyers to consider condos, where developers have become more aggressive dealmakers.

About Author: Brittany Dunn

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