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Foreclosures help September home sales soar 65% in state

October 22, 2008|The Associated Press

Home sales in California jumped 65% in September from a year earlier, as home buyers seized sharply discounted foreclosed homes and other properties, a real estate tracking firm said Tuesday.

The increased supply of more affordable homes helped drive the statewide median home price down to $283,000, a drop of about 34% from $430,000 in September 2007, according to the survey by MDA DataQuick.

In all, 40,317 homes were sold last month -- up 6.1% from August. Foreclosure resales accounted for 51% of pre-owned homes sold.

MDA DataQuick also said home sales in a nine-county region around the San Francisco Bay Area jumped 45% from a year earlier. The region's median home price plunged to $400,000, a 36% drop from $625,000 in the year-earlier period.

The price drops reflect heavy discounting for homes in the region's inland markets such as Contra Costa, Napa, Sonoma and Solano counties, which accounted for nearly 62% of the region's sales.

"There's been a significant shift toward more sales in the inland areas and a higher percentage of sales in the area being post-foreclosure," said Andrew LePage, an analyst at MDA DataQuick.

In the region, 7,271 new and pre-owned homes were sold last month, and foreclosure resales accounted for nearly 42% of all pre-owned homes sold.

The sales in September marked the biggest year-over-year jump since April 2002 but were essentially flat versus August sales.

The latest figures represent homes that closed escrow in September on sales initiated probably as far back as July, before the U.S. financial crisis reached a boiling point.

As a result, it's unclear whether the sales trend will continue this month.

Trisha Motter, an agent with John Motter Realty in San Jose, said she was still seeing interest among buyers, particularly among those looking for foreclosures.

"Everybody's flocking to the really low-priced homes," Motter said.

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