Bay Area home sales decline, new price peak

August 16, 2006

La Jolla, CA.----Home sales in the Bay Area slowed to their lowest level in ten years as prices increased at their slowest pace since spring 2003, a real estate information service reported.

A total of 7,941 new and resale houses and condos were sold in the nine-county region last month. That was down 19.1 percent from 9,892 for June, and down 30.8 percent from 11,470 for July last year, according to DataQuick Information Systems.

Last month was the slowest July since 1996 when 7,682 homes were sold. The average July sales count since 1988 is 9,158.

"One of the questions being asked is how much future activity was drawn into the present in 2004 and 2005 when interest rates were at their lowest levels in decades. How much of today's demand has already been met? If the market is indeed going into a lull, expect low sales and flat prices through fall and on into next year," said Marshall Prentice, DataQuick president.

The median price paid for a Bay Area home was $627,000 last month. That was down 2.6 percent from June's record $644,000, and up 3.5 percent from $606,000 for July a year ago. Last month's year-over- year increase was the lowest since May 2003 when the $427,000 median was up 3.4 percent.

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 $3,106 in July. That was down from $3,183 in June, and up from $2,653 for July a year ago. Adjusted for inflation, mortgage payments are 22 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 half year. 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 July-05	No Sold July-06	Pct. Chg	Median July-05	Median July-06	Pct. Chg
Alameda	2,431	1,591	-34.6%	$575K	$581K	1.0%
Contra Costa	2,308	1,687	-26.9%	$555K	$581K	4.7%
Marin	408	286	-29.9%	$806K	$789K	-2.1%
Napa	184	131	-28.8%	$586K	$602K	2.7%
San Francisco	637	485	-23.9%	$776K	$771K	-0.6%
San Mateo	806	672	-16.6%	$759K	$754K	-0.7%
Santa Clara	2,764	1,943	-29.7%	$642K	$671K	4.5%
Solano	1,039	611	-41.2%	$450K	$464K	3.1%
Sonoma	893	535	-40.1%	$548K	$555K	1.3%
Bay Area	11,470	7,941	-30.8%	$606K	$627K	3.5%

Source: DataQuick Information Systems, www.DQNews.com

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