Bay Area home sales slowest since early 1990s, flat prices

September 13, 2007

La Jolla, CA.----Bay Area homes sold at the slowest pace in 15 years last month as market uncertainty intensified, forcing more buyers, sellers and lenders to the sidelines. Prices remained flat at the regional level but there were local variations, a real estate information service reported.

A total of 7,299 new and resale houses and condos were sold in the nine-county Bay Area in August. That was down 1.7 percent from 7,423 in July, and down 24.9 percent from 9,713 for August a year ago, according to DataQuick Information Systems.

Sales have decreased on a year-over-year basis the last 31 months. Sales last month were the lowest for any August since 1992 when 6,688 homes were sold. The strongest August in DataQuick's statistics, which go back to 1988, was in 2004 when 13,940 homes were sold. The August average is 10,170.

"Homes in the Bay Area are more expensive than elsewhere and most of them are financed with 'jumbo' mortgages. The turbulence in the mortgage markets has made it more difficult to get this type of financing. The question is: does this pull the plug on some market activity, or does it just slow things down? We won't know the answer for a few months," said Marshall Prentice, DataQuick president.

The median price paid for a Bay Area home was $655,000 last month. That was down 1.5 percent from the June and July peak of $665,000, and up 4.0 percent from $630,000 for August a year ago. The median was down in Solano, Sonoma and Napa counties and flat or up in the other counties.

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. Due to late data availability, the August statistics for Alameda are extrapolated from the first three weeks of the month.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $3,171 last month, down from $3,222 the previous month, and up from $3,014 a year ago. Adjusted for inflation, current payments are 21.9 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 3.9 percent below the current cycle's peak in June last year.

Foreclosure resales accounted for 4.8 percent of August's sales activity, up from 4.5 percent in July, and up from 1.2 percent in August of last year. Foreclosure resales do not yet have a regional effect on prices.

Other indicators of market distress continue to move in different directions. Financing with adjustable-rate mortgages is flat, financing with multiple mortgages has declined significantly. Down payment sizes are stable, flipping rates and non-owner occupied buying activity is flat, DataQuick reported.

All Homes	No Sold Aug-06	No Sold Aug-07	Percent Change	Median Aug-06	Median Aug-07	Percent Change
Alameda	1,988	1,501	-24.5%	$595,000	$619,000	4.0%
Contra Costa	1,987	1,279	-35.6%	$570,000	$570,000	0.0%
Marin	402	264	-34.3%	$800,000	$899,500	12.4%
Napa	128	103	-19.5%	$625,000	$597,500	-4.4%
Santa Clara	2,252	1,908	-15.3%	$672,000	$700,000	4.2%
San Francisco	669	577	-13.8%	$762,500	$822,000	7.8%
San Mateo	871	731	-16.1%	$755,000	$788,000	4.4%
Solano	730	418	-42.7%	$465,000	$420,000	-9.7%
Sonoma	686	518	-24.5%	$550,000	$505,000	-8.2%
Bay Area	9,713	7,299	-24.9%	$630,000	$655,000	4.0%

Source: DataQuick Information Systems, www.DQNews.com

Media calls: Andrew LePage (916)456-7157
or John Karevoll (909) 867-9534

Copyright 2005 DataQuick Information Systems.
All rights reserved.