Myrick Tantiado

Have you ever considered owning a home in the city by the bay?

With the median home price in San Francisco dropping from $742,250 in January 2008 to $658,350 in May 2009, coupled with stellar mortgage rates, and a sizeable tax credit, qualified, first-time home buyers may be able to reap the benefits of home ownership in this beautiful city.

According to a recent article from the California Association of Realtors titled, Trends In California Real Estate - Affordability Highest Since Start of Decade (Volume 30, Number 2, February 2009), the unsold inventory index for San Francisco as of January 2009 is 7.8 months of supply for detached homes and 10.1 months of supply for attached homes, meaning there is a good size of inventory to choose from and greater negotiating leverage for the buyer.

Furthermore, the housing affordability index has also increased from 35% in the third quarter of 2008 to 47% in the fourth quarter of 2008.

This is a perfect opportunity for qualified first-time home buyers. Those that are waiting for the bottom of the housing market and reluctant to buy now are really gambling that things may drop further.

One can never truly determine when the market has bottomed out until it starts back up again!!

And at that point, they have unfortunately missed their golden opportunity.

A wiser approach would be to start the due diligence of searching for a sound and sensible purchase now while the rates and home prices are low. Those are the real buyers in a buyer's market!

With the National Association of Realtors index of pending home sales, which measures contracts signed but not closed, in December jumping to around 6.3% (about 2.1% higher than December 2007), there are flickering signs of upward growth toward a recovering housing market.

Dr. Lawrence Yun, chief economist for the National Association of Realtors, said the index shows a modest rebound. "The monthly gain in pending home sales, spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month," he said.

NAR's Housing Affordability Index rose 10.9% in December to 158.8, the highest on record. The HAI shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.

Brian Wesbury, chief economist First Trust Advisors said, "It looks to me as though maybe we haven't reached the complete bottom yet, but we're in the bottoming phase right now."

In case you haven't read the last featured article in the San Francisco Chronicle's Real Estate section, "Here Comes 2009 - More pain or at long last relief for the Bay Area's housing market? Ready or not. . .", I have summarized 4 key points (actually a wish list from Bay Area experts) so you won't have to:

1. Hopeful push from Obama's administration on a loan modification program
2. Tax credit for home buyers
3. Push by the Federal Reserve to do whatever it takes to restore the flow of credit
4. Jumbo loan money more accessible for San Francisco Bay Area