The Solano County real estate industry is heading into 2005 as the most active and affordable real estate market

Optimistic outlookFebruary sales indicate good year ahead for Solano

By Barbara Smith/Business Writer

The Solano County real estate industry is heading into 2005 as the most active and affordable real estate market in the region.

While most sales in the nine-county Bay Area remained tepid from the typical post-holiday season, sales in Solano warmed up with prices climbing to a median of $413,000 in February. In fact, compared to the other counties, more homes sold in Solano - 22.6 percent compared to January and 25.5 percent compared to a year ago, according to a real estate information service.
Frank Lopez, veteran mortgage broker and co-owner of Adobe Mortgage in Vacaville, said he expects to see Solano County, particularly Vacaville, continue to be at the top of the market.
Lopez has found from current data for each Solano County city that year to date without exception the county's resales are ahead of last year's pace, and the sales new homes are well ahead of last year's pace.

"Which does come as a surprise, but it's certainly welcome," Lopez said. "I honestly think that we're in for another very good year, and I don't think that's false optimism." A third generation Vacan, Lopez said he's watched Vacaville grow and sees the city especially poised for a strong year because of what city planners have done to make it such a desirable community, he said.

With the exception of Napa County, most Bay Area county sales in February were stagnant or declined from January down as far as 6.1 percent, but were still an average of 20.1 percent higher from one year ago. That mix edged up the median sales price to a new peak of $549,000 with sales staying at near-record levels, according to DataQuick Information Systems.

A total of 7,463 new and resale houses and condos were sold in the nine-county region in February. That was down 0.6 percent from 7,509 for the previous month, and up 0.7 percent from 7,412 for February last year, Last month was the second-strongest February in DataQuick's statistics, which go back to 1988. Sales in February 2000 totaled 7,507.

The median price paid for a Bay Area home - $549,000 - is a new record. That was up 2.8 percent from $534,000 in January, and up 20.1 percent from $457,000 for February a year ago. Prices are going up at their fastest pace in four years. DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide.
Marshall Prentice, DataQuick president, said in a report that the strength of the market has taken economic forecasters by surprise because interest rates have been edging up the past month. "Generally when that happens, buyers jump to get in before rates increase any further," he said. "We can expect a strong March and April, at least." Lopez agreed.
"Typically, March and April are what I consider the selling season, and given the products lenders have to offer the borrowers, and the affordability in Solano County, I think that we're in for a pretty robust spring market."

Also according to DataQuick, the typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $2,460 in February, an all-time high. A year ago it was $2,008.

Indicators of market distress are still largely absent. Foreclosure rates are low, down payment sizes are stable and there have been no significant shifts in market mix, DataQuick reported.
Barbara Smith can be reached at business@thereporter.com.

Source: DataQuick Information Systems, www.DQNews.com