Is the Bay Area housing market stabilizing?

Bay Area home prices edged higher in April for the first time in 18 months, a sign that the region’s housing downturn may finally be easing, according to a new report.

But the forces that have slowed the housing market’s slide are fragile and it is unclear whether the region’s real estate slump has truly hit bottom, according to MDA DataQuick, a San Diego real estate research company.

“For the past few months we’ve seen faint but growing signs that would normally suggest many markets are nearing price stabilization,” said John Walsh, MDA DataQuick president. “But we’ll need to see those vital signs continue to strengthen into the fall. Job losses and historically high foreclosure levels continue to pose serious threats to housing stability.”

A total of 7,139 new and resale houses and condos sold in the Bay Area last month, up 13.1 percent from a year ago. It was the eighth consecutive year-over-year gain for the nine-county region.

While sales are rising, it was the second-lowest tally for April since 1995 and nearly one-fourth below the average for the month since 1988, when DataQuick began tracking the market.

The median price rose to $304,000 in April, up 4.8 percent from March. But home prices remained far below levels from a year ago, when the median was $518,000, and prices were more than half off the July 2007 peak of $665,000.

The March to April bump in prices was driven by a change in the mix of sales. For the first time this year, foreclosure homes accounted for less than half of all sales.

MDA DataQuick reported that 47.4 percent of the homes sold in April had been seized in foreclosure proceedings during the previous 12 months. It was the lowest since November, when foreclosures accounted for 46.8 percent of sales.

Foreclosure purchases in the Bay Area peaked in January and have been dipping since. The trend has led to median prices flattening or declining at slower rates in many counties across the Bay Area.

Still, the region’s housing market remains unsettled.

A decline in Bay Area foreclosures could be the temporary result of a new state law enacted last fall to slow the process. But after falling for two quarters, banks sent more default notices to Bay Area homeowners during the first three months of this year and foreclosures could turn back up this summer.

Analysts warn more homeowners could be driven into foreclosure by job losses or pay cuts as the recession continues to exact a toll on the Bay Area economy.

As in previous months, sales were concentrated among first-time buyers and investors who snapped up lower-priced homes in areas where foreclosures dominate the market.

Falling prices and loan interest rates near historic lows have put homes within reach of a growing number of buyers in the Bay Area.

The monthly mortgage payment on a typical home sold in April was $1,277, down from $2,463 a year ago. The payment assumes buyers put down 20 percent of the purchase price on a 30-year fixed-rate mortgage.

The dramatic decline, in part, reflects the unusually low level of high-end home sales.

Activity remains muted at higher price ranges and in more expensive areas primarily because financing is costly. Banks continue to charge a premium for larger loans — so-called jumbo loans — because they are considered more risky in a market where prices continue to fall.

Only 22 percent of Bay Area home sales last month were financed with jumbo mortgages, compared with more than 60 percent before the credit crunch hit in late summer 2007.

“In much of the Bay Area there’s the added problem of jumbo loan financing still being relatively expensive and, for many, hard to get. A solution to that problem will no doubt be part of the kindling that eventually reignites the Bay Area’s high-end sales,” Walsh said.