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The number of sales of new and existing single-family houses and condominiums increased13.6 percent increase in December from a year ago said a report released MDA DataQuick.  Last month's median sales price for the nine-county Bay Area represented a 15.2 percent gain from $330,000 in December 2008 to $380,000 in December 2009.

Continuing the encouraging news over the past few months, December was the third month in row where there was a year-to-year price gain in the region following 22 months of year-to-year price drops.

The rising prices can be traced to competition among buyers for a diminishing pool of bank owned homes, plus low rates and the Federal Tax Credit.

For now foreclosures are becoming a smaller part of the resale market, accounting for 32.3 percent of existing homes sales last month in the Bay Area. That's down from 48.3 percent in December 2008 and a peak of 52 percent hit last February.

Still, some observers have expressed concerns that loan modifications programs are only delaying the foreclosure process and that more bargain-priced foreclosures that are in the pipeline could push prices down.

There were bigger year-to-year gains in the number of homes sold in more expensive parts of the Bay Area such as San Mateo County, Santa Clara County and San Francisco. But in Alameda County there was small gain in sales while Contra Costa County saw a drop in sales.

As our Bay Area Activity Reports confirm, Alameda County, had a 4 percent increase in home sales from a year ago while the median sales price of $360,000 represented a 6.5 percent gain. In Contra Costa County, the median sales price of $287,500 was a 13.9 percent gain. In San Mateo County, home sales increased 47% and the median sales price of $586,500 is a 9.2 percent gain.

Competition for lower-priced homes is helping to push upthe  median price in all bay area counties.

At the lower end, investors and first time home buyers seeking to take advantage of the federal income tax break are the primary buyers

There are increases in notices of defaults and foreclosures in the high-end million-dollar plus market. That's called the tail of the dragon. In a recovering market, the high end is the last to drop and the last to recover.

John Walsh, MDA DataQuick president said "the market appears to be improving but normal is not here yet.  Sales distribution is still lopsided towards lower-cost homes, driven by tax incentives and distress activity."

In these complex times, I am always available to answer your questions or discuss you concerns.  Simply call, text or email me for a prompt response.

Now, more than ever buyers and sellers will benefit from the advice and guidance that an experienced REALTOR® can provide. If you are in the San Francisco Bay Area, I invite you to take a look at our Resource Center, www.AboutBayAreaHomes.com. There you will find links for active home listings, including bank owned and short sales, home loan information,  market activity reports, home seller strategies, staging and decorating, a suite of 19 calculators, plus my book, “Let’s Make a Deal, The Insiders Guide to Buying and Selling Real Estate” and more. Of course I am always available to discuss your real estate or mortgage related questions or concerns, just call, text or email me for a prompt response.

Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients in San Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties. Licensed as a Real Estate Broker by the California Department of Real Estate, 01264240.