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Bay Area Appreciation Rises

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Real Estate Agent with Coldwell Banker Cal BRE #00991346

RISMEDIA, Jan. 29, 2008-Reacting to the country's liquidity crisis, housing market activity in the Bay Area continued on a downward slide in the fourth quarter of 2007, as all housing types experienced dramatic decreases in unit sales - down 39 percent, year-over-year - according to report released this week by the research division of Prudential California Realty based on an analysis of MLS data. However, the region-wide decline in activity levels had little effect on median house price appreciation, as both detached homes and condominiums experienced a seven and eight percent increase, respectively.

"Steady activity in high-end Bay Area markets induced a significant increase in prices this quarter, while entry-level markets were characterized by a dramatic reduction in sales," said Scott Kucirek, general manager of Prudential California Realty, based in Pleasanton. "Looking forward, the next two quarters could remain challenging, as high-end buyers may take a ‘wait-and-see' approach, while financing options will remain limited for those seeking entry-level homes."

Of the Bay Area markets surveyed, Marin and Santa Clara County yielded the highest year-over-year price appreciation, rising 13 and 11 percent, respectively. San Francisco and San Mateo, two areas brimming with job opportunities, also showed noticeable price gains, up 10 and nine percent, respectively, from the same period last year.

Meanwhile, other counties in the region comprising a larger number of entry-level and mid-range markets had fewer interested or qualified buyers, despite the availability of affordable properties; Solano County, in particular, suffered a 48 percent decrease in market activity, year-over-year.

Market activity remained unpredictable in some counties in the fourth quarter, as reduced unit sales and higher median prices forced some Bay Area buyers to wait for an improvement in market conditions. Qualified buyers in these counties favored properties in well-appointed neighborhoods, resulting in particularly strong sales-to-price disparities in Los Gatos, Palo Alto and Sunnyvale (Santa Clara County) and Burlingame, Portola Valley and Redwood City (San Mateo County) for single-family detached homes. Sellers in mid-range and high-end communities who did not receive their asking price tended to retract from the market. At the same time, entry-level communities in these same counties consisted of many sellers who were on the market due to a pressing need, such as foreclosure.

Added Kucirek: "The Bay Area real estate market still presents many questions as we move into 2008. Market activity may decrease slightly in conjunction with a mild price adjustment later this year, although entry-level markets hit hardest over the last two years may again look attractive to both first-time buyers and investors."

For more information, visit http://www.prurealty.com/.

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