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Bay area home prices down 1.8% in December from November

January 21, 2010 | 10:46 am

San Francisco Bay Area home prices declined 1.8% in December from November, but posted a third month of year-over-year gains, according to data released this morning.

The median price paid for a Bay Area home was $380,000 in December, down from $387,000 in November. But the median home price was still 15.2% up from December 2008. Last month was the third in a row with a year-over-year gain, following 22 months of decline, a promising trend for the stability of the housing market up north, according to MDA DataQuick, a San Diego research firm that closely tracks California's housing market.

By comparison, Southern California home prices posted a year-over-year increase for the first time only last month, DataQuick reported earlier this week.

Bay Area home prices appear to have hit a bottom at $290,000 last March, steeply off the $665,000 peak reached in June and July of 2007.

“A couple of years from now, when looking back, there’s a good chance we’ll refer to the beginning of 2009 as the bottom of the market. But that doesn’t mean we’re anywhere near normal yet,” MDA DataQuick President John Walsh said. “Sales distribution is still lopsided toward lower-cost homes, driven by tax incentives and distress activity. Whole mortgage categories don’t exist for buyers. Putting a deal together is excruciating, like swimming in molasses. We don’t expect much genuine improvement until lending institutions reopen their spigots.”

A total of 7,828 new and resale houses and condos were sold in the nine-county Bay Area region last month, up 13.8% from November and up 13.6% from December 2008. An increase from November to December is normal for the season, as people close out deals that had been pending for the year, but December’s sales count was the highest for that month since December 2006.

Homes sold in December that had been foreclosed on in the prior 12 months made up 32.3% of all resale activity. That was up from a revised 31.9% in November and down from 48.3% in December 2008. Foreclosure resales peaked at 52% in February 2009.

Federally insured loans from the Federal Housing Administration, a popular choice among first-time buyers, made up 25.6% of all Bay Area purchase loans last month, up from 25.1% in November and  22.8% a year earlier. Two years ago, FHA-backed loans made up 0.5% of the market.

The most active lenders to Bay Area home buyers last month were Wells Fargo and Bank of America, DataQuick said.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,619 in December, down from $1,639 in November, and up from $1,471 in December 2008. Adjusted for inflation, current payments are 38.4% below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 54.5% below the current cycle's peak in July 2007, DataQuick said.

-- Alejandro Lazo