Saturday, September 15, 2012

Median for midrange home prices rises in area - Sacramento Bee

Middle-class move-up buyers pushed Sacramento's median home price higher in August, continuing an upward trend that started earlier this year with lower-priced homes, DataQuick reported Friday.

Meanwhile, the number of foreclosures on the market hit a five-year low in August, the San Diego-based real estate information service said.

According to DataQuick, the median price of detached resale homes in Sacramento County jumped more than 10 percent in August from the same month a year ago. It rose from $160,000 in August 2011 to $176,500 last month. That was the highest it's been since July 2010.

August also saw a month-over-month increase. The median price of resale homes rose from $170,000 in July.

The county's median price has been going up each month since the start of the year, except for a dip in May, DataQuick reported.

Competition among investors for homes below $200,000 prompted earlier gains.

The current bump in the median is driven by buyers of mid- and high-priced homes taking advantage of near record-low interest rates to move up, said DataQuick analyst Andrew LePage.

In the $300,000 to $800,000 price range, there was "a lot of move-up activity" in Sacramento County, with sales volume increasing by 33 percent over August 2011, he said.

There were 765 Sacramento County homes sold in August priced between $200,000 and $400,000 â€" a 23 percent year-over-year increase â€" while sales of homes under $200,000 fell by 8 percent from August 2011 to August 2012, he said.

At the same time, foreclosure sales hit their lowest level in five years, making up only about 24 percent of homes sold in August, he said. It was the lowest foreclosure sales figure since August 2007.

"The bottom of the market continues to see a decline in activity because of lower foreclosure rates," LePage said. "What kept these sales gains going was the activity in the middle."

Factors contributing to the increases have been the same for months: low prices, low mortgage rates and low inventory.

Prices appear to have hit bottom earlier this year. Mortgage rates remain near record lows, with 30-year fixed-rate loans still under 4 percent.

Inventory remains remarkably tight. It would take less than a month to sell off all the homes now on the market in Sacramento County and in West Sacramento, the Sacramento Association of Realtors recently reported. Real estate agents consider a six-month supply to be a sign of a healthy market.

If these conditions continue, LePage, said it's only a matter of time before more homeowners decide to put their houses on the market. Supply will eventually increase to meet demand.

But with about half of homeowners in the county still owing more than their homes are worth â€" and many other feeling uncertain about their jobs and the economy â€" it could take awhile, he said.

"At some point we will see a substantial increase in homes on the market," LePage said. "I don't know when it will happen, but it will happen."

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Call The Bee's Hudson Sangree, (916) 321-1191.

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