Article Published: Saturday, July 24, 2004
Record sales prices
Solano remains most affordable of nine Bay Area counties
By Barbara Smith/Business Writer
Real estate sales sizzled in Solano County in May and June, as they did in all Bay Area counties.
The median price paid for a home in the Bay Area for June hit a record $516,000-plus, according to DataQuick Information Services. Buyers also committed to an average monthly mortgage payment of $2,450.
But Solano County remains the most affordable in the nine-county area, where the median price for a home peaked at $358,000 in June - an 18.5 percent increase from the $302,000 median in June of last year.
Early July indicators show sales are cooling off somewhat, said Elizabeth Fry, Vacaville broker and owner of Showcase Properties. But that's because the real estate market tends to be cyclical, she said.
"The market took off after the first of the year, we had an upsurge, and around the first of June it seemed to continue on, but it's leveled off," said Fry, a 23-veteran in the industry.
But the demand in the upper-end market remains strong, and that's encouraging, Fry said.
"The public has become aware of this area as being a really nice place to live," Fry said. "We have a lot of people calling from Napa who want to move into this area because it's gone up a notch in prestige. Before, they used to snub their noses."
DataQuick reported in early spring that $1 million home sales in California jumped to record levels, with sales in nearby Ross in Marin County reporting virtually all home sales in the $1 million category.
DataQuick is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. It monitors real estate activity nationwide through county recorders' records.
In Solano County, high end housing that hasn't been available in the past is now, and the clients are demanding those luxury homes, Fry said.
"If it's over a million, it's a tighter market, but they're still selling. There are a pool of buyers that can afford up to $1 million," Fry said. "I have several homes listed right now over a million dollars, and we've sold three of them within the last three months."
While sales of lower-priced homes are leveling off, that's not unusual following the buying frenzy of early spring.
"Anytime you get a rapid increase in prices, it decreases the affordability level and it hits a certain point where people tend to back off and kind of wait and see," Fry said.
When people watching the market see the prices skyrocketing, they sometimes put their houses on the market for higher prices.
"There's a lot of overpriced listings offered, but the ones that are priced at the current market value are selling quickly, that's the key," she said.
And it's hard to find a reduced-price home in today's market, unless the seller is motivated.
"When it reaches a price point people are not just jumping into, when they're hesitant, then the sellers are forced to adjust their prices to the level they will sell," Fry said. "They'll push it up and at some point the demand will level off. If they're not motivated, they'll just keep them higher."
Dianne Mahanes, director of communications for Bay Area Real Estate Information Services, attributed June's real estate market to great interest rates. People wanted a good deal, she said.
"When it started to look like interest rates were going up, people thought, 'I really need to buy,' " she said. "Now, we have a lower inventory than we had last year at this time, but homes aren't staying on the market very long."
Fry said she does not anticipate the market dying out.
"I think it's going to continue at this level because of the demand here we have in Vacaville, and all over Solano County."
Barbara Smith can be reached at email@example.com.
Thursday, July 29, 2004
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