San Francisco area's March home sales sink to 20-yr low

SAN FRANCISCO, April 17 Thu Apr 17, 2008 3:39pm EDT

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SAN FRANCISCO, April 17 (Reuters) - The mortgage credit crunch drove March home sales in the San Francisco Bay area down to a 20-year low while the region's median sales price sank 16.1 percent last month from a year earlier amid weak demand, a report said on Thursday.

Since September, home sales in the San Francisco region have hit record monthly lows amid tight credit for prospective home buyers, a response to turmoil in mortgage markets arising from the subprime mortgage crisis.

The report from DataQuick Information Systems, whose records date back to 1988, suggests that the region's pricey housing markets will not see their normal rebound in spring sales because mortgage lenders have become overly cautious -- even toward solid borrowers who typically merit "jumbo" mortgages, or loans for more than $417,000.

"The cutback in credit has been such that even people with good credit are having difficulty right now," said Alan Gin, an economist at the University of San Diego's Burnham-Moores Center for Real Estate.

"We'll see continued pressure on prices at least until the second half," Gin added. "Sales will continue to be slow ... and we'll have high levels of foreclosures."

A total of 4,898 new and resale houses and condominiums were sold last month in the nine-county San Francisco Bay area, one of the most affluent regions in the nation, according to the DataQuick report.

That marked a drop of 41.1 percent from a year-ago March and it was the region's weakest sales total for any March since DataQuick began keeping records 20 years ago, the real estate information service said in its report.

March sales rose 22.8 percent from February, but that increase was sharply below the region's typical monthly gain of 40 percent, the report said.

"It still appears that a lot of Bay area activity is just on hold, waiting for the mortgage markets to open back up," said Marshall Prentice, DataQuick's president.

With demand down and credit tight, home prices fell last month from year-earlier levels in eight of the nine counties in the region.

Markets on the region's periphery and with its most affordable housing -- frequently bought with the kind of risky mortgages that sparked the current spike in foreclosures -- posted double-digit decreases in median sales prices.

Only in San Francisco, both the city and the county, did the median home sales price increase in March -- but only by 0.3 percent from a year earlier -- to $755,000.

The regional median price paid for a home in March was $536,000, down 2.2 percent from the previous month, and down 16.1 percent from a year earlier and down 19.4 percent from a peak $665,000 last June and July.

"Last month's median price would have been closer to $597,000 if the availability of jumbo home loans had remained stable," the DataQuick report said. "A year ago, jumbo loans, mortgages above $417,000, accounted for 62.2 percent of all Bay area home loans. Last month, they were 29.8 percent." (Reporting by Jim Christie; Editing by Jan Paschal) (Reuters Messaging: jim.christie.reuters.com@reuters.net; Tel: +1 415 677 2539;)) Keywords:

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