More homeowners in San Francisco avoid foreclosure. In April this year, the percentage of distressed sales decreased to 29.5 percent, a substantial drop from 46.4 percent one year earlier.
As fewer units were sold from listings of foreclosure houses in April, the median price for homes sold increased to $370,000, up by 21.7 percent from the April 2009 median. The price increase was the 7th consecutive month the price median increased year-over-year.
Local housing analysts said that the price median rose because more high-end foreclosed homes for sale in San Francisco, CA were sold. In the first quarter, 86 homes appraised above $1 million were foreclosed. One foreclosed home in Meadowlands Ranch was recently sold for only $950,000, significantly down from its $1.235 million price in 2006.
Last year, a total of 305 million-dollar homes were not able to avoid foreclosure, up from 289 high-end homes repossessed in 2008. A huge percentage of these homes were bought with adjustable-rate mortgages during the boom. Over the four-year period to 2008, one-fifth of all homes were bought or refinanced with ARMs and these homes averaged $823,000 in price.
Several economists contended that unemployment and option ARM combined to batter households that were formerly insulated from the housing crisis. While these households have other resources to fund their other needs, they figured that making huge monthly payments for properties that have plunged in values does not make sense.
Nevertheless, there are more owners of distressed higher-end homes able to complete short sales in less time compared to owners of entry-level homes. Several banks prefer selling high-cost homes through short sales than through foreclosures so they can recover more. Besides, the conditions of homes in short sales are much better than properties in foreclosure.
Similar to the San Francisco trend, the number of California foreclosed homes also dropped in April, allowing the median price to improve to $255,000, up by 15.4 percent from $221,000 in April last year.
In the HAMP report for April, a high number of California homeowners were able to modify their loans and avoid foreclosure.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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