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Bay Area home sales and prices surge with tax credit rush

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Fueled by federal tax credits and low interest rates, Bay Area sales took off in some of the region’s costlier neighborhoods last month, helping push the median home price there above $400,000 for the first time since the U.S. was gripped by the financial crisis 21 months ago.
First-time buyers found fewer foreclosed homes for sale in the region last month, the San Diego real estate research firm MDA DataQuick said Thursday. The decline in bank-owned inventory helped the median sales price for all property types in the region hit $410,000, up 10.8% from April and 20.1% from May 2009.

A total of 8,264 homes sold last month, an 18% jump from April and an increase of 11% from May 2009, DataQuick said.

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The surge in sales is probably due to buyers rushing to seal deals before a June 30 deadline to qualify for a federal tax incentive. First-time buyers and new-home buyers in California are also eligible for a separate state credit of up to $10,000, of which there is $100 million in state money available for each credit.

After the tax credit surge, many experts fear sales could fall again and prices may slump.

-- Alejandro Lazo

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