coldwell Banker - october MARKET FLASH
Statistical data from CAR and DataQuick

WHERE DO WE GO FROM HERE? (REPRISE)
Intro: Third time…lucky? This is the third October in a row that we’ve confronted an uncertain market, so it may once again be influenced by seasonal phenomena. Behavior in the market is more and more at odds with fundamentals and we’re more inclined than ever to say: This can’t last. Read on.

Statistics:
Statewide: The median resale price of a single-family detached home in California for August was $568,890, a 20.1% increase over the $473,520 median for August 2004. The August 2005 median price increased 5.2% compared to July 2005. Sales activity year-over-year increased 7% for the second strongest August sales figure on record, after 2003.

Unsold resale inventory in August was sufficient for 2.9 months, compared to – we said 4.3 months a year ago, CAR claims 3.6 months now – of a year earlier. Hmm, inventories are tightening up again; more buyers, fewer sellers or a little of both? Median number of days till sale was 29, up from 26 a year earlier, so we’re guessing fewer sellers.

Top Ten List: The ten California communities with the highest median home prices, and over 30 sales, in August were: Laguna Beach, $1,550,000; Los Altos, $1,515,250; Manhattan Beach, $1,464,500; Burlingame, $1,450,000; Palos Verdes Estates, $1,415,000; Calabasas, $1,351,500; Saratoga, $1,307,500; Newport Beach, $1,296,250; Mill Valley, $1,257,500; Rancho Palos Verdes, $1,201,500. Four out of ten, like last year, though not the same four. Made the price but not the sales: Belvedere Tiburon at $1,837,500 and 20, Alamo at $1,275,000 and 23, Greenbrae at $1,227,000 and 18. Made the sales but not the price: Los Gatos with 64 at $1,157,750, San Anselmo with 34 at $1,040,000. Woodside is harder to figure since it shares its zip with Emerald Hills and Redwood City, but there were 43 sales for the zip and the top was $6 million. Other strong contenders who missed the list: Orinda, Lafayette, Danville, Menlo Park and San Mateo. We report that one zip of Berkeley (94705) cracked a million median at $1,142,500.

Bay Area: August median price, at $730,360, is up a sliver for the month but almost 13% for the year. Sales activity is up 5% for the month and down about 4% for the year. Santa Clara County’s median price is up a bit for the month and almost 22% over August 2004; sales activity is down a bit for the month and almost 10% from last year. Monterey County and region is a little bit up here, a little bit down there, but with prices up by about 20% for the year. Santa Cruz County, with a $783,000 median, is performing strongly except for a July-to-August dip of about 11% in sales activity, partly seasonal and partly affordability – but Watsonville, Felton and Aptos are screaming hot.

Sacramento/Capitol Region: Sacramento’s figures are respectable, with a 20% jump in median price for the year. Hot localities include Loomis, West Sacramento, Galt, Fair Oaks, Lincoln and several neighborhoods in Sacramento proper.

Interest Rates: Thirty-year fixed rates, at 5.4%, are down from last year’s 5.9%, but right at the midline they’ve been frantically oscillating around since the end of 2002; adjustable rates are at 5%, up from just over 4% last year and probably continuing to close the gap with fixed rates.

The chair of the Fed says that the vast majority of American households are “not overextended” financially, but in nearly the same breath, warns against “exotic” mortgages and admits that the impact of Hurricane Katrina won’t force a pause in the stepping climb of fundamental interest rates.

Inventory: Looking much more like California than it was for a while, but in general, not tight enough to worry about.

News Media: Our market is still hot, but the news media are proclaiming almost with one voice that it's not likely to stay that way.

Overall Assessment: The market is still hot. Make hay while the sun shines and put some in the barn for winter.