Slowdown in Bay Area home sales, appreciation rate

April 19, 2006

La Jolla, CA.----Home sales in the Bay Area continued to slow as price increases dipped into the single digits for the first time in more than two years, a real estate information service reported.

A total of 9,745 new and resale houses and condos were sold in the nine-county region last month. That was up 57.0 percent from 6,206 for February, and down 13.8 percent from 11,310 for March last year, according to DataQuick Information Systems.

An increase in sales from February to March is normal for the season. The year-over-year decline was the twelfth in a row, although last month's sales count was above average for a March. Sales for the month of March have ranged from 5,496 in 1995 to 11,442 in 1989. DataQuick's records go back to 1988.

"March numbers are pretty good at predicting upcoming activity. We figure that sales will be good but not spectacular on into the summer and that price increases will stay below ten percent. We'll probably have a couple of months with new price peaks, but those new records will be reached at a slower rate of appreciation," said Marshall Prentice, DataQuick president.

The median price paid for a Bay Area home was $622,000 last month. That was up 1.0 percent from February's $616,000, and up 9.5 percent from $568,000 for March a year ago. The median peaked at $625,000 last November. Last month's year-over-year increase was the first time was below 10 percent since prices rose 9.7 percent to $443,000 in January 2004.

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 $2,958 in March. That was up from $2,889 in February, and up from $2,636 for March a year ago. Adjusted for inflation, mortgage payments are 18 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 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 Mar-05	No Sold Mar-06	Pct. Chg	Median Mar-05	Median Mar-06	Pct. Chg
Alameda	2,295	1,954	-14.9%	$527K	$582K	10.4%
Contra Costa	2,198	1,940	-11.7%	$514K	$576K	12.1%
Marin	451	372	-17.5%	$812K	$817K	0.6%
Napa	207	160	-22.7%	$559K	$641K	14.7%
San Francisco	660	561	-15.0%	$696K	$763K	9.6%
San Mateo	855	695	-18.7%	$725K	$741K	2.2%
Santa Clara	2,823	2,571	-8.9%	$606K	$660K	8.9%
Solano	1,029	797	-22.5%	$409K	$485K	18.6%
Sonoma	792	695	-12.2%	$506K	$546K	7.9%
Bay Area	11,310	9,745	-13.8%	$568K	$622K	9.5%

Source: DataQuick Information Systems, www.DQNews.com

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