Strong Closing

End of the year statistics show Solano still most affordable
By Barbara Smith/Business Writer, The Reporter

Home sales in Solano County and the Bay Area finished out 2004 with the second strongest December on record, a real estate information service reported.

Among the nine Bay Area counties, Solano County boasted the highest median price increase - 25.1 percentage - followed closely by Napa County at 23 percent. A recorded 1,053 homes closed escrow, and the median sales price jumped from $323,000 in December 2003 to $404,000 in December 2004.

Yet compared with the other eight Bay Area counties, Solano County remains the most affordable for home buyers.

Dixon real estate broker Gary Archer of Archer & Ficklin described the real estate market of 2004 as "dramatic."

"It is a strong indicator of supply and demand, and prospective buyers quickly default into a geographic location that they can afford," Archer said. "And in relative terms, Solano County is still affordable."

Archer, who has a 25-year background primarily in the land business, said it's all relative. A
couple working in the city and county of San Francisco cannot find affordable housing. Next, they try Contra Costa and Walnut Creek area, but that doesn't make the grade, Archer said. The next step is Solano County.

"Even though its pricey, it's become affordable," he said. "And for the folks who can't make it in Solano County, to some extent they're going up to Yuba County."
In the Dixon market, Archer said there is land in Dixon that is in the hands of good home builders.

"We are hoping to sell some southwest Dixon home construction this year, and have sales take place either late in '05 or in the spring of '06, and they're going to reflect the current market," he said.

In the nine-county Bay Area region, a total of 11,068 new and resale houses and condos were sold. That was up 1.6 percent from 10,897 in November, and down 2.5 percent from 11,354 for December last year, according to DataQuick Information Systems.

The year-ago December sales count was the strongest for any December in DataQuick's statistics, which go back to 1988.

The interest rate for a 30-year fixed-rate mortgage was 5.34 percent in mid December 2003, it was 5.23 percent a year later, according to market tracker National Financial News Services.
The median price paid for a Bay Area home was $533,000 last month, matching the record set in November. That was up 16.4 percent from $458,000 for December a year ago. Year-over-year price increases have been in the 15-18 percent range since April.

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.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $2,350 in December, unchanged from November. A year ago it was $2,045. It peaked at $2,450 in June when mortgage interest rates were somewhat higher. In today's dollars the payment reached $2,406 in April 1990.

And what about the 2005 market?

"I think it's going to be steady, I think that there will be a percentage increase, but I don't think it's going to be as dramatic in 2004," Archer said.

Barbara Smith can be reached at business@thereporter.com