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San Francisco-area home prices hit new high

Spurred by strong demand and continued low mortgage interest rates, prices paid for homes in the San Francisco Bay area rose to a new high in August and home sales in the region remained at near-record levels, according to a report released Wednesday.
/ Source: Reuters

Spurred by strong demand and continued low mortgage interest rates, prices paid for homes in the San Francisco Bay area rose to a new high in August and home sales in the region remained at near-record levels, according to a report released Wednesday.

The median price paid for a home in the nine-county region, which includes San Francisco and the Silicon Valley high-technology hub, rose to $619,000 in August, an increase of 2.1 percent from July and a 19-percent jump from a year earlier, according to the report by DataQuick Information Systems.

Home prices in the San Francisco Bay area, which boasts one of the strongest housing markets in the United States despite the economic shock to the region from a prolonged high-tech slump, have posted double-digit percentage increases each month for 21 consecutive months, the La Jolla, California-based real estate information service noted.

According to DataQuick, 12,154 new and resale houses and condominiums sold in the San Francisco Bay area last month, marking an increase of 6.0 percent from the prior month and a decrease of 4.1 percent from a year earlier.

Year-earlier sales were the strongest of any August in the San Francisco Bay area, according to DataQuick’s records, which date to 1988.

According to DataQuick, the region’s housing market is not showing signs of the slowdown many analysts expect. They have predicted the market will cool because increases in the area’s home prices in recent years have outstripped personal income gains of potential home buyers.

“We’re a bit surprised at how stable the market is in all categories. Usually one segment of the market will be outperforming the others. Right now, though, the same trends apply to all parts of the market from entry-level on up to the prestige market,” said Marshall Prentice, president of DataQuick.

“This stability means that the market will probably stay strong at least through the end of the year,” Prentice said.