California Mortgage Craze Dying Down Across Bay Area

Homes sales in the Bay Area continued a slowing pattern for the 25th consecutive month while year-to-year Californa home prices remain flat, according to a report released today by DataQuick Information Systems.

A total of 6,305 new and resale houses and condominiums changed hands in February, up 2.2 percent from January but a 7.9 percent decrease from a year ago.

The median price was $620,000, up 3.2 percent from January, but up only 0.3 percent from a year ago.

Last month’s sales volume was the lowest February since 1996, when 5,940 homes were sold.
While the Bay Area overall saw a drop in home sales and prices remained flat, different counties posted varying numbers.

• In Alameda County, 1,356 homes changed hands in February, up 3.7 percent from a year ago. The median price was $585,000, up 0.9 percent from February 2006, yet borrowers took out Californoa home loans regadless.

• Contra Costa County saw 1,160 home sales in February, an 18.7 percent decline from a year ago, and the median price was $537,000, a 5.5 percent decline.

• In San Mateo County, 528 homes sold in February, down 7 percent from a year ago. The median price was $720,000, a 2 percent decrease.

While home sales and demand for home mortgage loans are still lower than a year ago, the declines have eased since sales dropped 32.4 percent last July on a year-to-year basis.

The Bay Area median price peaked last June when it reached $648,000. Since August, home price appreciation on a year-to-year basis has essentially been flat, ranging from a 1.5 percent decline to a 1.6 percent gain.

“This is what we mean by a market `flattening out’ in terms of price appreciation,” said Marshall Prentice, DataQuick president. “To some extent, today’s market is the result of buyers and sellers locking horns, refusing to give in to the other side’s idea of what a house is worth.”

Another factor driving the slowdown, according to Prentice, is that lots of people bought a few years ago when the California housing market was hot.

“They rushed to buy sooner than they would otherwise have, and that stole demand from today. It’s tough to quantify, but we think it helps explain the slowdown.”