Housing Bubble

Bay Area home sales fluctuate but prices hit new peak

May 21, 2003

La Jolla, CA.-- While April Bay Area home sales were strong but not record-breaking, home prices hit a new peak, the result of continued demand and low mortgage rates.

A total of 10,004 new and resale houses and condos were sold in the nine-county region last month. That was up 13.4 percent from 8,818 for March, and down 7.1 percent from 10,768 for April a year ago, according to DataQuick Information Systems.

April sales counts have ranged in recent years from 4,923 in 1995 to 11,092 in 1999.

"Many forecasters are scrambling to revise their Bay Area real estate numbers for this year. While low interest rates play a part in today`s strong market, it`s clear that most analysts underestimated demand," said Marshall Prentice, DataQuick president.

The median price paid for a Bay Area home was $426,000 last month. That was up 1.7 percent from $419,000 in March, and was up 6.0 percent from $402,000 for April last year, according to DataQuick Information Systems.

While prices dipped on a year-over-year basis in late 2001 and early 2002, they started increasing again one year ago.

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. Because of some gaps in data availability, the sales counts for several counties are extrapolated.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,899 in April. A year ago it was $2,045. The peak was in May 2000 at $2,124.

Indicators of market distress are still absent. Foreclosure rates are low, flipping rates are low, adjustable-rate mortgage usage is low, down payment sizes are stable and there have been no significant shifts in market mix, DataQuick reported.

Source: DataQuick