Bay Area home prices continue to rise despite sales decline

Bay City News Service

March 20, 2006

According to real estate monitor DataQuick, home prices have continued to slow in the Bay Area and the rate of home sales in February was the lowest for February sales in five years.

While the number of homes sold dropped, home prices continued to rise, according to DataQuick.

"It's probable" that home price appreciation "will dip into the single digits again this spring," according to DataQuick.

This February there were 16.8 percent fewer sales in the Bay Area than in 2005, with some 6,206 new and resale houses and condos over 7,463 last year.

Sales typically drop from January to February, according to DataQuick.

"Right now we don't see anything ominous in the numbers, just a real estate cycle that is past the frenzy phase," Marshall Prentice, president of DataQuick, said in a prepared statement.

"We'll know more about what's going on once next month's numbers come in. March sales have a more typical purchase pattern than February's or January's," Prentice said.

DataQuick found that "indicators of market distress are still largely absent." While foreclosure rates are up from last year's figures, they are still below normal levels, and down payment sizes are stable.

The "falling of sales is a measure of cooling, not distress," UCLA economics professor Christopher Thornberg said.

DataQuick is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates and monitors real estate activity across the Unite States.

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