Saratoga News

Homes

The Real Deal

Pace of market picks up in March

The market pace began to pick up in March, according to a report from the California Association of Realtors, with median home prices increasing by 13 percent, though sales were down by 15.1 percent compared with the same period a year ago.

Both Los Gatos and Saratoga were among the top 10 communities with the highest median home prices during March. The top 10 list is generated for incorporated cities with a minimum of 30 recorded sales in the month.

Statewide, the 10 cities and communities with the highest median home prices in California during March 2006 were: Laguna Beach, $1,827,000; Burlingame, $1,720,000; Beverly Hills, $1,665,000; Los Altos, $1,626,000; Manhattan Beach, $1,625,000; Newport Beach, $1,520,000; Coronado, $1,463,750; Saratoga, $1,391,000; Los Gatos, $1,300,000; Calabasas, $1,259,500.

"March is the month in which we typically see the market gear up for peak season activity, and this year is no exception," said California Association of Realtors President Vince Malta.

"The level of sales activity remained below the record-setting levels that occurred over the last two years, but the pace of sales appears to be picking up," Malta said. "Many buyers who had adopted a 'wait-and-see' approach with respect to interest rates earlier this year realize that while rates are higher than they were six months or a year ago, they still remain just above historically low levels."

The median price of an existing, single-family detached home in California during March 2006 was $561,350, a 13 percent increase over the revised $496,890 median for March 2005, the association reported. The March 2006 median price increased 4.8 percent compared with February's revised $535,480 median price.

"The inventory of homes for sale fell from a 6.6-month supply in February to 4.8 months in March," said the association's vice president and chief economist, Leslie Appleton-Young. "Unsold inventory climbed significantly in the first two months of this year as listings increased and sales declined. Although the supply of homes for sale increased again in March, this was more than offset by a seasonal increase in sales, prompting a decrease in the unsold inventory index. We expect the supply of homes relative to sales to decline gradually over the next few months, although inventory levels will likely remain higher than those of the last two years."

Thirty-year fixed mortgage interest rates averaged 6.32 percent during March 2006, compared with 5.93 percent in March 2005, according to Freddie Mac. Adjustable mortgage interest rates averaged 5.42 percent in March 2006 compared with 4.23 percent in March 2005.

The Multiple Listing Service median price and sales data for detached homes are generated from a survey of more than 90 associations of Realtors throughout the state and represent closed escrow sales.

In a separate report covering more localized statistics generated by California Association of Realtors and DataQuick Information Systems, 89.8 percent or 369 of 411 cities and communities showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than Multiple Listing Service information.

Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors at www.silvar.org. Send questions on any topic to pcardus@silvar.org.