Median price for Bay Area homes sales up

(06-17) 14:09 PDT San Francisco -- Bay Area median prices for all home sales in May topped $400,000 for the first time in nearly two years, as the amount of real estate purchased in higher-end areas kept climbing, while sales of more affordable homes and foreclosures continued to fall, according to a report released Thursday.

Meanwhile, May prices for resale single-family homes - that is, not newly constructed houses - also rose to $434,000, an 8 percent increase from April, according to data analyzed by MDA DataQuick, a San Diego real estate research firm.

Sales of homes for more than $500,000 jumped nearly 34 percent from May 2009, as lenders made larger loan amounts more available comparedwith a year ago. Mortgages above the conventional conforming limit of $417,000 - also known as jumbo loans - accounted for 35 percent of last month's purchases, up from 25.8 percent in May 2009 and 31.5 percent in April of this year.

By contrast, May sales of homes priced below $300,000 fell nearly 23 percent below last year's level, when lower-end transactions and foreclosures were more robust.

The decline in foreclosures follows a trend over the past few months and, to some degree, may reflect the impact of federal government programs that have encouraged lenders to modify loans and facilitate short sales - in which banks allow houses to be sold for less than, or short of, what is owed on the mortgage.

Experts cautioned to not read too much into May's seemingly optimistic numbers. Some of the sales in the previous two months were influenced by government-backed tax credits for first-time home buyers and low interest rates, both of which could change. The federal $8,000 tax credit has ended, and while a similar state credit is still available, it has more restrictions and a finite amount of funds. It is unclear where interest rates will go.

"For now, at least, we're seeing a more normal mix of sales across the region and across price categories, thanks in large part to the state and federal tax credits coupled with incredibly low mortgage rates," said DataQuick President John Walsh. "It also appears that high-end financing is gradually loosening up."

Walsh said a stronger job market and low mortgage rates were the two things that could ensure demand for homes. And, while May's median price showed a significant bump upward, it still was nearly 40 percent below the $665,000 Bay Area median peak in June 2007.

While jumbo loans are inching up, banks also are requiring more proof of creditworthiness and assets, say loan brokers.

First time purchases continue to be driven by Federal Housing Administration loans. With down-payment requirements as low as 3.5 percent, they accounted for nearly 25 percent of Bay Area home purchases last month, according to DataQuick.

-- Almost out: Kathleen Pender says time is running out to qualify for California's first-time home-buyer tax credit. D8

E-mail Robert Selna at rselna@sfchronicle.com.

This article appeared on page D - 1 of the San Francisco Chronicle