Bay Area home prices decline, sales at five-year low

December 14, 2006

La Jolla, CA.----Bay Area home prices dipped below year-ago levels in November for the second time in three months as sales held steady at a five-year low, a real estate information service reported.

The median price paid for a home in the nine-county Bay Area was $616,000 in November. That was 0.3 percent higher than $614,000 in October but down 1.4 percent from $625,000 in November last year, according to DataQuick Information Systems.

Last month's year-over-year decline was the steepest since prices fell 2.1 percent in February 2002. In September this year the median fell 0.8 percent from last year, marking the first annual decline since March 2002, when prices declined 1.3 percent. In October this year the median went positive slightly, up 0.5 percent from a year ago.

Last month's median was 4.3 percent below the $644,000 June peak. Much of the drop is seasonal: summer buyers pay around 3 percent more for their homes than those who purchase between November and February.

"Right now it looks like the Bay Area market is settling in on a price level that could last until spring. What happens after that depends on broader economic factors including interest rates, job growth and household incomes. As prices stabilize and sellers get real about asking prices, a lot of the fence-sitters will jump in. We could see a moderate increase in sales counts," said Marshall Prentice, DataQuick president.

A total of 7,204 new and resale houses and condos sold in the Bay Area last month. That was down 9.7 percent from 7,979 sales in October, and down 25.9 percent from 9,717 in November last year. A decline from October to November is normal for the season.

Last month's sales count was the lowest for any November since 2001, when 6,644 homes sold. Since 1988, November sales have ranged from 5,579 in 1994 to 10,897 in 2004. The average is 7,725.

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 $2,865 last month. That was down from $2,901 in October, and down from $2,921 for November a year ago. It peaked in June at $3,183. Adjusted for inflation, mortgage payments are 12.9 percent higher than they were at the peak of the prior cycle in early 1990.

Indicators of market distress are still at a moderate level. Financing with adjustable-rate mortgages is flat. Foreclosure activity is rising but is still within the normal range. Down payment sizes are stable, as are flipping rates and non-owner occupied buying activity, DataQuick reported.

All Homes	No Sold Nov-05	No Sold Nov-06	Pct. Chg	Median Nov-05	Median Nov-06	Pct. Chg
Alameda	2,009	1,441	-28.3%	$587K	$581K	-1.0%
Contra Costa	1,961	1,406	-28.3%	$589K	$562K	-4.6%
Marin	361	268	-25.8%	$809K	$841K	4.0%
Napa	183	125	-31.7%	$605K	$596K	-1.5%
San Francisco	594	441	-25.8%	$749K	$754K	0.7%
San Mateo	756	581	-23.1%	$733K	$726K	-1.0%
Santa Clara	2,394	1,846	-22.9%	$653K	$665K	1.8%
Solano	774	565	-27.0%	$490K	$446K	-9.0%
Sonoma	685	531	-22.5%	$574K	$530K	-7.7%
Bay Area	9,717	7,204	-25.9%	$625K	$616K	-1.4%

Source: DataQuick Information Systems, www.DQNews.com

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