Joe Wilson's Silicon Valley Real Estate Blog

San Jose Mercury News July 16, 2010

Seven days was all it took. Accepting an all-cash offer, Isobel Sheehan sold her Palo Alto townhouse recently for nearly $900,000, joining other Bay Area homeowners who've begun to come in from the recessionary cold.

"We saw places selling quickly around us,'' she said, "and we just thought the time was right.''

It's still a trickle — the number of Bay Area homes sold last month inched up from May, while still falling short of a year ago. But the median price of the previously owned, single-family homes that changed hands in Santa Clara County was $600,000, up 23.7 percent from June 2009 and 2.5 percent from May 2010, according to figures released Thursday by MDA DataQuick.

That was the highest since July 2008, when the county's median house price was $646,500. San Mateo County showed an 8.4 percent jump from June 2009, from $599,500 to $650,000.

But while Realtors report a return to stability in the market, there are crosswinds, as well. On one hand, the impact of the now-expired federal homebuyer tax credits continues to fade, adding a drag to homebuying activity. At the same time, the price jump was helped by fewer foreclosures re-selling and more action at the big-money end of the market.

While recent reports show an increase of foreclosures at the high end of the market, there are more non-foreclosure sales of expensive houses as well, said DataQuick President John Walsh. "Your house may have been worth $1.5 million at one point, then dropped to $1.2, but now it's at $1.25 (million) and it's been sitting there for a year. And that return to price stability is giving sellers the confidence to jump in.''