BY COLDWELL BANKER                 

WHAT LIES AHEAD

With the traditionally slow December and January months behind us, we now look to what lies ahead. There has been tremendous buzz lately in the real estate industry about the possibility of the government raising the conforming loan limit which would surely have a positive effect on our local marketplace by driving more capable buyers into the market. And, if history is any indicator, the 2008 real estate market should hold its own because during election years it traditionally performs well.          

Statistics:

Statewide: The median resale price of a single-family detached home in California for December was $475,460, down 2.9% for the month and 16.5% from December 2006. This month’s statewide median is the lowest in our records, which go back to July 2005. Statewide sales meanwhile decreased year-over-year by a third. Unsold resale inventory represented a 14.5-month supply, compared to 5.9 months (says CAR now) for the same period a year ago. Median number of days till sale was 67 in December, down from 72 for the month a year earlier.

County Statistics:  

Region	Median Price Dec. 2007		% Change in Median from Nov. 2007		% Change in Median from Dec. 2006		% Change in Sales from Nov. 2007		% Change in Sales from Dec. 2006
Alameda County	$540,500		-6.00%		-9.54%		12.28%		-52.21%
Contra Costa County	$500,000		-4.03%		-12.43%		12.83%		-48.11%
El Dorado County	$435,000		3.51%		-3.60%		9.56%		-1.97%
Marin County	$760,500		-13.28%		-4.94%		-11.05%		-36.36%
Monterey County	$454,500		-11.75%		-22.90%		6.56%		n/a
Napa County	$570,750		1.92%		-3.02%		-31.51%		-60.63%
Nevada County	$420,000		-5.62%		-15.83%		-12.63%		n/a
Northern California	$353,900		-0.20%		-8.21%		n/a		n/a
Placer County	$367,500		-4.92%		-14.53%		18.08%		98.13%
Sacramento County	$280,000		-3.03%		-20.49%		4.25%		24.28%
San Benito County	$411,000		-1.44%		n/a		-6.67%		-28.21%
San Francisco Bay	$587,500		-5.24%		-4.94%		-1.21%		-39.50%
San Francisco County	$733,500		-9.94%		-1.54%		-12.41%		-13.23%
San Mateo County	$735,000		-4.55%		-1.41%		-18.16%		-45.95%
Santa Clara County	$664,000		-5.82%		-0.60%		1.36%		-49.11%
Santa Cruz County	$625,000		-7.34%		-7.37%		-8.62%		n/a
Solano County	$370,000		1.37%		-13.95%		8.99%		-50.51%
Sonoma County	$415,000		-10.27%		-21.70%		-13.85%		-54.22%
Yolo County	$326,500		-8.03%		-19.79%		18.40%		54.17%

Alameda County: A slight uptick in sales from November. Median, which has spent most of this year in the band between $575,000 and $625,000, is now roughly 10% below the December 2006 level.

Contra Costa County: Exactly the same situation in sales as Alameda County, although the numbers are a tiny bit larger. Countywide median for December is $500,000.

El Dorado County: Not doing badly – sales are almost exactly what they were a year ago and median has only slipped by about 3%. 

Marin County: Highest median for the month but with a decline in the month-to-month median. Sales are barely half of what they were last summer. 

Monterey County: As we can tell, Monterey sales have been steady since the end of last summer though December’s median of just over $450,000 is a decrease from $600,000 in June.

Napa County: The good news is that Napa median has declined only $18,000 in a year. Sales, however, are half of last year’s level. 

Nevada County: Sales are sliding, but it’s hard to draw solid conclusions, since when totals are in the double digits, even a small increment looks like a lot. Median is down about 15% for the year.

Placer County: According to DataQuick, after a spectacular jump between September and October, a lull in October and November, and another leap between November and December, last month’s sales were double the December 2006 figure. That doesn’t go with the rest of what we know about Sacramento region, and it really doesn’t go with the other figure we find for Placer County December sales. Pardon us while we get to the bottom of this. The median figure, which is much more reasonable, shows a decline of about 15% for the year.

Sacramento County: Median, at $280,000, is 20% below December 2006, and the decline seems to be slowing as buying picks up; sales are up almost 25% year-over-year and not many counties can say that right now. Sacramento was one of the first counties to show the effects of this housing crisis and it would only be fair if it becomes one of the first to recover.

San Benito County: A year-over-year decline of 40% in sales is not as bad as it looks, since again the effect is exaggerated for double-digit numbers. After falling precipitously from almost $600,000 a year ago, median seems to have stabilized at around $420,000.

San Francisco Bay: December median, at $587,500, is almost exactly where it was in April 2005. Year-over-year sales are off by a third. 

San Francisco County: Sales are down by about 20% for the year. Median ends 2007 barely below where it began. Overseas buyers, with their strengthening currencies, may be protecting a unique market from any sizable slips.

San Mateo County: Sales year-over-year have declined by about half. Median was still climbing at the beginning of 2007, reached a peak in early summer and is now declining – but only to about where it was a year ago.

Santa Clara County: Sales are half what they were in December 2006, but that is of less concern in Santa Clara County than elsewhere, because sales gyrate wildly – one month’s sales can be a quarter to a third of the month’s immediately before. Median is almost exactly where it was a year ago, and actually, has not changed much in the last two years.

Santa Cruz County: We don’t have many figures for sales – yet – but we know that this county’s big drop in sales came at the end of August and since then the decline has been slow. In a year, the median has only slipped from the high sixes to the low sixes – not as significant a correction as we see elsewhere.

Solano County: Median down year-over-year by about 15% and sales at about half the December 2006 level. 

Sonoma County: For Sonoma County, read Solano County almost exactly, except that Sonoma’s numbers are a little smaller. Still, Sonoma has not seen the drop in sales that Napa has.

Yolo County: A 20% decline in median year-over-year with a 50% increase in sales. We’d say that Yolo was doing better than most counties, at least for the moment.

Interest Rates*: Thirty-year fixed recently “skyrocketed” (Bankrate.com) to 5.88%, 15-year fixed rose to 5.38%, 5/1 ARM climbed to 5.66%. And jumbo 30-year fixed, for loans greater than $417,000 or what are called in urban and suburban California “regular mortgages,” went up 18 basis points to 7.03%.

 Overall Assessment: After years of sitting on the sidelines waiting for the opportunity to make a move into the Northern California real estate market, now may be the time. All signs point to opportunity. With the election year upon us, an increase to the conforming loan limit under consideration, plentiful inventory in many areas and prices that are stabilizing, there is no time like today to take action. 

*Area interest rates are reported to be as follows:

Sacramento/Tahoe, San Francisco Bay Area and Silicon Valley regions: Princeton Capital reports that as of February 5, 2008, the 30-year fixed with one point is 6.375%, the 15-year fixed with one point is 5.625% and the 5/1 ARM with one point is 5.375%, on non-conforming loans of $500,000.