There were several pieces of news today about the housing market nationally. Sales of existing homes have increased 7.2% to an annual rate of 5.24 million in July, up from 4.89 million in June, according to the National Assoc. of Realtors. This is the fourth monthly increase in a row and represents the highest sale rate since August, 2007.

Ben Bernanke announced at a Fed. Reserve meeting in Wyoming that “The prospects for a return to growth in the near term appear good” in response to the news.

One of the driving forces of the increase in sales is lower prices. The median home price nationally is down 15.1% from a year ago.

At the same time, foreclosure rates are rising, led by Florida and California. Furthermore, foreclosures are no longer largely due to subprime loans. Prime, fixed rate loans now account for 33% of foreclosures, whereas a year ago they represented only 20%. These foreclosures are being driven by rising unemployment, which is expected to peak above 10%.

This is a very sad situation for the many people who have lost their jobs and are in line to lose their homes. But it is an opportunity for people with stable job situations, good stable incomes, and money for a downpayment. They can buy homes at reduced prices as the market adjusts to the recession and the recovery begins.

New data from MDA DataQuick which monitors San Diego County home sales show that there has been a mild increase in prices and numbers of sales in July. The median price is up to $320,000 from the recent low of $280,000 in January. The number of sales was 3809, up 11% from July of 2008.

But experts do not predict  rapid appreciation to return. The rise in the median price was partly due to a larger contribution of move-up homes of over $500,000–27.9 % of sales as against the recent low of 17.5% in January. The percentage of sold homes that had been foreclosed has correspondingly dropped to 37.4% from the recent high of 55% in January. Still, most of the activity is interest from first-time buyers and investors in starter homes in the lower price range, resulting in multiple offers.

The inventory of available homes on the market has fallen to 8,889 from 13,268 last month, although part of the fall is due to a change of definition; short-sales waiting for lender approval are now called contingent sales instead of active. The inventory of homes to choose from is down because many potential sellers are holding their homes off the market because of the depressed prices, down 38% from the 2005 peak.

Overall it appears that the market has likely bottomed out, so it is a good time for interested buyers to start shopping. There are bargains available if you are interested in Cardiff, Encinitas, Carlsbad, Oceanside, Vista, or San Marcos.