Bay Area home sales decline, prices level off

September 20, 2006

La Jolla, CA.----Home sales in the Bay Area declined again last month as prices continued to level off, a real estate information service reported.

A total of 9,128 new and resale houses and condos were sold in the nine-county region last month. That was up 14.9 percent from 7,941 for July, and down 24.9 percent from 12,154 for August last year, according to DataQuick Information Systems.

Last month was the slowest August since 1997 when 9,080 homes were sold. DataQuick's statistics go back to 1988: the slowest August was in 1992 with 6,326 sales, the strongest was in 2003 with 12,488. The average August sales count since 1988 is 9,530.

"Several things are going on. Many homes are being offered for sale at unrealistically high prices as sellers try to game the peak of the market. Buyers appear to be taking a wait-and-see approach as sellers get real with their asking prices. The market seems to be going into a lull, until this all shakes out. It does appear that the strong appreciation of the recent past is leveling off," said Marshall Prentice, DataQuick president.

The median price paid for a Bay Area home was $620,000 last month. That was down 1.1 percent from $627,000 in July, and up 0.2 percent from $619,000 for August a year ago. Last month's year-over- year increase was the lowest since March 2002 when the $381,000 median fell 1.3 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 $2,966 in August. That was down from $3,106 in July, and up from $2,761 for August 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 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 Aug-05	No Sold Aug-06	Pct. Chg	Median Aug-05	Median Aug-06	Pct. Chg
Alameda	2,612	1,876	-28.2%	$586K	$577K	-1.5%
Contra Costa	2,497	1,910	-23.5%	$567K	$567K	0.0%
Marin	438	380	-13.2%	$822K	$803K	-2.3%
Napa	226	119	-47.3%	$603K	$616K	2.2%
San Francisco	662	613	-7.4%	$745K	$750K	0.7%
San Mateo	969	792	-18.3%	$773K	$721K	-6.7%
Santa Clara	2,832	2,126	-24.9%	$654K	$658K	0.6%
Solano	1,016	668	-34.3%	$474K	$483K	1.9%
Sonoma	902	644	-28.6%	$554K	$557K	0.5%
Bay Area	12,154	9,128	-24.9%	$619K	$620K	0.2%

Source: DataQuick Information Systems, www.DQNews.com

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