Bay Area home prices rose month-over-month for the third straight time as sales reached their highest level in three years in June, fueling hopes that the limping real estate market is slowly beginning to heal.
The median price paid for an existing, single-family home across the nine-county region was $360,000 in June, down 29.4 percent from a year earlier but up nearly 7 percent from May, according to San Diego research firm MDA DataQuick. A total of 6,518 existing, single-family homes traded hands last month, up 27.8 percent from a year ago.
DataQuick attributed the improving numbers to the increasing availability of mortgages and a growing perception among buyers that prices have bottomed out. Realtors have been noticing the same trends.
“We don’t expect people to go out and flip a house today and make a lot of money,” said Rick Turley, president of the regional division of Coldwell Banker. “But buyer confidence seems like it’s on the rise, people feel good about long-term investment in San Francisco Bay Area real estate.”
San Francisco prices held up the best among the Bay Area’s counties in June, falling just 8.4 percent from a year ago, according to DataQuick. Solano County fared the worst with a 34.5 percent drop but also experienced the largest spike in sales, up 71.9 percent.
Transactions across the region have now increased on a year-over-year basis for the past 10 months. Just above 37 percent of the resold homes had been foreclosed upon in the last 12 months, well off the peak of 52 percent in February.
The data indicate that low interest rates and prices are spurring buyer demand, which in turn is keeping inventory in check, two critical components of a recovery, said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange.
“That is the very important, positive development and I believe it’s going to continue,” he said.
Still, Adibi and others stressed that the month-over-month price increases themselves don’t necessarily indicate values are stabilizing. Instead, the trend could largely reflect a change in the mix of homes trading hands. DataQuick noted that the percentage of properties that sold for more than $417,000, the traditional “jumbo mortgage” threshold, rose to 28.8 last month, its highest level in nearly a year.
When a greater portion of the properties selling are in the high end, it can pull up the median even if prices are actually declining. The median means that half of the homes traded for more than that amount and half for less.
All that can be reliably deduced so far is that values aren’t falling as quickly as they were, said Jed Kolko, research fellow at the Public Policy Institute of California. Still, he added: “Given how rapidly prices had been declining, a slowdown in the rate of decline is good news.”
Other recent economic data are less promising for the real estate market.
Lenders issued 391,611 foreclosure filings to California property owners in the first half of the year, up almost 14 percent from the previous six months, RealtyTrac of Irvine reported Wednesday. The filings include everything from default notices, the first stage in the foreclosure process, to the final step of bank repossessions.
The percentage of resold homes that had been foreclosed upon in June was 37.3 percent, down from 40.5 percent in May.
Meanwhile, California’s unemployment rate leaped to 11.5 percent in May as employers cut 68,900 jobs, according to the state’s Employment Development Department. The June report is due out today.
Adibi said home prices could bottom out by the end of the year, but an actual rebound won’t occur until companies feel confident enough to begin hiring again, a mood unlikely to prevail before mid-2010 at the earliest.
“What trumps all these variables is jobs,” he said.
E-mail James Temple at jtemple@sfchronicle.com.