Nov. 16, 2009 (Business Wire) -- Pending home sales in San Francisco increased 30 percent month over month in October and 58 percent year over year, according to the latest Market Focus report issued jointly by Rosen Consulting Group and the San Francisco Association of REALTORS®. The report indicates that the sharp rise in the number of homes under contract should lead to strong sales activity going forward.

The improvement in home sales activity in the city observed during the last six months and the recent jump in pending sales has reduced the inventory of single-family homes for sale to 2.4 months of supply, compared to 4.9 months of supply in October of last year.

The months of supply of housing is defined as the ratio between the number of homes for sale on the last day of the month, divided by the number of homes that went into contract during the same month. A low months of supply number, such as exists now, is a sign of a tight housing market and usually signals rising prices ahead.

The Market Focus report also indicates that the median single-family home sales price increased 3.4 percent month-to-month to $760,000 in October, marking the second consecutive month of increasing prices.

Ilse Cordoni, president of the San Francisco Association of REALTORS®, notes that the stabilization of home prices, particularly at the lower end of the housing market, has caused the higher end of the market to gain traction. “During the last two quarters, we have seen a more evenly distributed pattern of home sales activity throughout the city and in all price ranges,” she says.

The demand for condominium units also is showing signs of improvement. The Rosen Consulting Group reports that, “Pending condominium sales nearly doubled in the city from October of last year, with 288 units under contract in October 2009.”

But the Rosen Consulting Group observes that the San Francisco housing market is facing some headwinds: “The concentration of job losses in white-collar employment sectors during the current down-cycle and the disproportionate impact that this has had on the San Francisco economy increases the likelihood of pushing more distressed homeowners into foreclosure.”

But Cordoni says that despite high unemployment levels and continuing job cuts, the extension, as well as the expansion, of temporary federal housing programs should continue to promote housing demand in San Francisco. “As a result of the continued government intervention in the housing market,” she says, “traditional supply/demand dynamics have shifted. Tax credits and mortgage rate subsidization will continue to moderate the negative effects of high unemployment levels and job market uncertainty.”

Real estate data in Market Focus is provided by Terradatum. Market Focus is written by the Rosen Consulting Group. For additional information on the real estate market or Market Focus, please contact:

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