NorCal median home price rises nearly 7 percent

November 19, 2009 12:00:00 AM PST
A tracking firm says the median home price in Northern California jumped nearly 7 percent last month from September.

Industry tracker DataQuick says the market may be going through a sustained recovery.

"I do notice a renewed sense of faith in buyers. Although they're moving cautiously, there's still action in the market," said San Francisco realtor Robert Merryman. "There's an indication that lenders have slowed down the foreclosure process because they feel foreclosing is driving down the values of the homes on the market."

Analysts say there have been more short sales, where lenders sell a distressed home for less than the borrower owes.

Loan modifications are also more frequent and high-end home sales also jumped. The more affluent Bay Area counties accounted for 42 percent of last month's sales.

"They're probably paying cash, so they're just buying at an advantageous level at a discount," said.Leon Huntting, past president of the California Association of Mortgage Brokers.

But the sunny housing news was offset by another report, which shows almost one in 20 mortgage loans were going through foreclosure during the third quarter and that's a record level.

The most disturbing part of the mortgage delinquency report is that the big increases in foreclosures and delinquencies are now coming from those with the best credit.

One-third of new foreclosures in the third quarter were on prime fixed-rate loans.

"We went from the front tier of subprime borrowers, homeowners going through foreclosures, then we went through the mezzanine level and now we're on the upper level," said Huntting.

Jobs, or the lack of jobs, has driven a lot of it. Without two wage owners financing a home, you can't effectively meet your monthly payment as far as your mortgage is concerned.

So, to paraphrase an old adage -- "as jobs go, so go foreclosures."


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