A 44 percent jump in sales of Santa Clara County houses in December capped a year that saw the most properties change hands since 2006.

The median house price also rose last month, to $525,750, up 15 percent from December 2008, according to a report Thursday from MDA DataQuick. That was slightly lower than the year's peak of $550,000 in both October and November, and still far off the record reached in summer 2007 of $805,500.

"All the downward pressure on prices from all the foreclosure activity helped clear the market, and it's resulted in a considerably higher rate of sales," said Dana Johnson, chief economist for Comerica Bank.

A federal tax credit for first-time buyers also boosted interest last


year, when 13,934 houses were sold. Once set to end in November, the tax credit program was extended until April this year.

If demand continues to increase, home prices will rise. "The housing bubble, which was particularly severe in California, has been worked through, and that creates a more balanced and healthy local economy," setting the stage for prices to start climbing upward, Johnson said.

Prices in some neighborhoods may be "inching up," said DataQuick's Andrew Lepage, but the 15 percent year-over-year increase in the median price in December is "certainly not because the typical house in Santa Clara County has gained 15 percent in value."

Instead, a primary reason for the big jump was that more homes in the upper price ranges sold than in the final month of 2008, when the stock market had tanked and sales in high-end neighborhoods slowed drastically.

Last month, houses that cost from $500,000 to $999,999 made up 38 percent of sales, for example, but in December 2008, only 33 percent of sales fell into that price range.

A total of 1,266 resale houses sold in the county last month, about the same level as in December three years earlier, before the subprime mortgage crisis began to erode the real estate market.

Condominium sales were even stronger, with 69 percent more sales last month than in December 2008. The median price of the condos that changed hands last month was $333,000, up 11 percent from a year earlier.

In San Mateo County, the median price of houses rose 16.5 percent, to $658,000, and sales volume increased 47 percent, to 505. The median marks the halfway point, meaning half the homes sold for less than the median price, and half for more.

Homes in Santa Clara County were popular with investors in December, DataQuick's report showed. Nearly 14 percent of all homes were sold to "absentee" buyers — those whose mailing address was different from the property address, a good proxy for investor or vacation-homebuyers.

In addition, 22.7 percent of home purchases in the county in December appear to have been made in cash, because no mortgage was recorded on the date of sale. The peak month for all-cash sales was August, with 23.3 percent.

"Investors specifically are buying in cash because that's winning out over financed deals" when there are multiple offers on a property, said Geraldine Barry, president of the San Jose Real Estate Investors Association. "A lot of times, financed deals will fall through."

Oscar Apostol and his wife are among those who have been losing out to all-cash buyers. They've been looking for a house costing less than $500,000 in San Jose's Blossom Hill and Cambrian neighborhoods since early last year, and "we got outbid like 10 times," mostly by people paying in cash, said Apostol, who rents in Redwood City.

He plans to go to an open house for a Blossom Hill property this weekend. Once listed for $425,000, the house has been reduced to $379,000, he said. "They're bringing the price down to get a lot of people bidding," Apostol said. He said it's unlikely he'll make an offer under those circumstances, and he's hoping more homes come up for sale in February. "I'm trying to stay positive."

For 2009 as a whole, the median price of houses sold in Santa Clara County was $500,000, a big drop from the peak annual median price of $775,000 in 2007. The last time the county's annual median price was lower was in 2002, at $494,000.

Contact Sue McAllister at 408-920-5833.