In the San Francisco Bay Area, home sales improved from January to February, but remained below last year’s level. However, the median price paid continued a five-month-long run of year-over-year increases, according to MDA DataQuick. There were a total of 4,987 new and resale houses and condos sold in the nine-county Bay Area in February. That’s up 2.8% from 4,853 in January and down 0.9% from 5,032 in February 2009, DataQuick said. In addition, February’s total was 22.2% below the February average of 6,413 sales, going back to 1988. Since 1995, the February sales total is second lowest only to 2008, when 3,989 were sold. The median price paid for all new and resale houses and condos was $354,000, up 1.1% from $350,000 in January and up 20% from $295,000 in February 2009. Last month’s median was 22.1% higher than the apparent bottom of the Bay Area’s price drop, $290,000 in March 2009, but 46.8% lower than the $665,000 peak median reached in June and July of 2007. The significant increase in median price this year was due to more foreclosure and lower-cost home sales, along with fewer high-end sales last years. “The sales and price data remain choppy, with more ups and downs and inconsistencies than we’d typically see. It’s partly the season — January and February are often atypical and don’t serve as good barometers. But it’s more than that. The market remains fundamentally off kilter,” said MDA DataQuick president John Walsh. But foreclosure resales are still playing a dominant role in the Bay Area market. Homes that had been foreclosed on in the prior 12 months accounted for 36.6% of all resale transactions in February, the fourth consecutive month of increased foreclosure sales. However, last month’s share of sales is below the February 2009 share, when foreclosure resales peaked at 52% of all resales transactions. “Despite the widening stability seen in the housing market in recent months, the outlook remains murky,” Walsh said. “Whether prices will firm, or remain firm, will depend largely on three factors: The market’s response as the government reduces its housing stimulus, the economy’s ability to gain traction, and the decisions that lenders and borrowers will make in countless distress cases. The key question is how much more distressed inventory is coming, and when.” Sales of homes priced at more than $500,000 accounted for 31.9% of all February transactions, up from 23.6% last year. An increase of distressed sales for luxury homes has helped that segment of the market pick up activity, DataQuick said. Hurting the upper end of the market, however, is the lack of available financing. Mortgages above $417,000 — the former definition of a jumbo loan — made up 26.3% of all home purchase loans last month. That was down from 27.3% in January but up from 18.3% a year ago. Before the credit crisis took hold in August 2007, more than 60% of purchase loans were over $417,000. Adjustable-rate mortgage (ARM) lending also remains constrained. ARMs accounted for 7.8% of Bay Area purchase loans, up from 7.5% in January and 3.9% in 2009. But from January 2000 to August 2007 ARMs on average, accounted for 61% of all purchase loans. On the lower end of the spectrum, government-insured Federal Housing Administration (FHA) loans accounted for 26.9% of Bay Area purchase loans in February, up from 23.3% last year and only 1.4% two years ago. “There’s still relatively little lending going on in the upper price ranges, and little adjustable-rate financing, which had been vital to the Bay Area,” Walsh said. “Investor and cash-only deals remain well above normal, as does the level of sales involving distressed property.” Absentee buyers purchased 19.4% of all Bay Area homes sold in February, equal from January and up from 18.4% last year. Buyers who appeared to have paid in cash — meaning there was no corresponding purchase loan found in the public record — accounted for 27.1% of all February sales, up from 25.7% in January and 24.4% last year. House flipping is also up from last year. Homes that sold in February that had previously been sold between a three-week and six-month period accounted for 2.6% of all sales, down from 2.9% in January, but up from 1.5% last year. Write to Austin Kilgore.

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