The San Bruno real estate market observed a healthy spike in a number of key indicators in September. Despite economists' fears of a double dip recession, buyers have been snatching up homes due to low price points and attractive mortgage interest rates. This resulted in favorable numbers last month for real estate here as a whole.
According to data from MLSListings, San Bruno saw its average home price increase nearly 15 percent to $587,000 in September. The median price of a San Bruno single family residence rose 7.8 percent to $566,000.The average number of days on the market fell by 10 percent to 52 days, while homes sold at nearly 97 percent of their listing price.
These indicators reflect a positive improvement in the city's real estate market as of last month and a positive trend throughout the year so far.
Even more encouraging for the real estate market here is that the overall percentage of distressed properties has dropped over the past year. A distressed property can be a foreclosure or a short sale. A foreclosure is a bank-owned property where the bank has taken back ownership of the home through the foreclosure process. A short sale is a transaction in which the bank is working with the borrower to sell the property for less than the amount of the mortgage owed in the hopes of avoiding the foreclosure altogether.
Of the 145 active homes that are on the market — single family residences, condos and townhomes — 60 are bank-owned foreclosures and pre-foreclosure short sales. After reaching as high as 60 percent in February and March, distressed properties now represent fewer than half of the available housing supply, according to the MLSListings.
This news is certainly encouraging. Folks who have the means to buy are finding that price points have dropped significantly enough to move forward on purchasing a home.
Furthermore, mortgage interest rates continue to remain attractive. Private Mortgage Advisors, a affiliate of Wells Fargo Bank, indicated that interest rates have reached their lowest point in nearly 5o years. These have spurred able buyers to act, despite the exhaustion of the state and federal home buyer tax credits.
Despite these positive indicators, experts are expecting further increases in foreclosures and pre-foreclosure homes to hit the market over the next year.
While JPMorgan Chase, GMAC and Bank of America have recently announced a foreclosure freeze, there is currently a backlog of more than 1.2 million loans that are in the process of foreclosure across the country, according to RealtyTrac, a housing data firm based in Irvine, Calif.
Furthermore, the National Association of Realtors reports that distress sales, including foreclosures, made up 34 percent of all existing home sales in August.
Clearing out the backlog will be a multi-year process. The National Association of Realtors also reports that one out of every four homes in the U.S. is worth less that what the borrower owes and that one out of every seven borrowers nationwide is behind on their mortgage payments.
Home prices and market indicators will continue to be skewed until this backlog is cleared out.
Joseph Capote is a local Realtor who runs the blog San Bruno Views. His real estate column will appear monthly on Wednesdays.