Slowdown in Bay Area home sales, appreciation rate

March 16, 2006

La Jolla, CA.----Bay Area home sales remained at their lowest level in five years in February, as price increases continued to slow, a real estate information service reported.

A total of 6,206 new and resale houses and condos were sold in the nine-county region last month. That was up 3.4 percent from 6,004 for January, and down 16.8 percent from 7,463 for February last year, according to DataQuick Information Systems.

Normally sales decline from January to February. Last year's February was the strongest in DataQuick's records which go back to 1988. Last month was the eleventh in a row to see a year-over-year sales decline.

"We'll know more about what's going on once next month's numbers come in. March sales have a more typical purchase pattern than February's or January's. Right now we don't see anything ominous in the numbers, just a real estate cycle that is past the frenzy phase," said Marshall Prentice, DataQuick president.

The median price paid for a Bay Area home was $616,000 last month. That was up 1.5 percent from January's $607,000, and up 12.2 percent from $549,000 for February a year ago. The annual price increase was the lowest since prices rose 9.7 percent to $443,000 in January 2004. It's probable that appreciation will dip into the single digits again this spring.

DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $2,889 in February. That was up from $2,798 in January, and up from $2,460 for February a year ago. Adjusted for inflation, mortgage payments are 16 percent higher than they were at the peak of the prior cycle sixteen years ago.

Indicators of market distress are still largely absent. The use of adjustable-rate mortgages has decreased significantly the last three months. Foreclosure rates are coming up from last year's low point, but are still below normal levels. Down payment sizes are stable and there have been no significant shifts in market mix, DataQuick reported.

All Homes	No Sold Feb-05	No Sold Feb-06	Pct. Chg	Median Feb-05	Median Feb-06	Pct. Chg
Alameda	1,422	1,149	-19.2%	$512K	$579K	13.1%
Contra Costa	1,456	1,305	-10.4%	$488K	$569K	16.6%
Marin	251	207	-17.5%	$760K	$837K	10.1%
Napa	173	111	-35.8%	$559K	$585K	4.7%
San Francisco	475	385	-18.9%	$699K	$733K	4.9%
San Mateo	576	488	-15.3%	$686K	$718K	4.7%
Santa Clara	1,882	1,614	-14.2%	$579K	$663K	14.5%
Solano	705	493	-30.1%	$413K	$482K	16.7%
Sonoma	523	454	-13.2%	$501K	$524K	4.6%
Bay Area	7,463	6,206	-16.8%	$549K	$616K	12.2%

Source: DataQuick Information Systems, www.DQNews.com

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