The IJ's Spin on DataQuick's Numbers

In the past I have slammed the Marin Independent Journal for its lazy reporting, its ceaseless and almost blind cheerleading of real estate, and its ignoring of the facts as they relate to real estate. In my opinion the IJ chose to "follow the money" and side with their vested interests and abandon their journalistic responsibility to objective reporting and informing the public of what has been driving this real estate market to obscene levels and the risks that entails. Hence, this blog (which, incidentally, I know for a fact they read). So naturally, I was anticipating the IJ to put a significant amount of spin on the latest DataQuick figures. Well, they did put a lot of spin on them with an abundance of feel-good quotes from real estate agents. But nevertheless, for the IJ this is a fairly sobering article.

Median home prices fell in Marin County last month as sales dropped to their lowest level in 11 years. Marin's median home price was $900,000 in July, down from $971,500 in June and down from $910,000 in July 2005. Sales for both homes and condominiums totaled 286 in July, the lowest sales volume since July 1995, when 205 residences sold, according to DataQuick Information Systems, a real estate information service in La Jolla. July home sales were down nearly 30 percent from July 2005, when 408 sold. In Marin, 204 single-family homes were sold last month, down 30 percent from June when 292 were sold and down 25.5 percent from July 2005 when 274 were sold.

"Marin was no exception [to the rest of the Bay Area] as the decline year to year was very similar to the Bay Area," DataQuick analyst Andrew LePage noted. "The slowdown under way for many months was just more pronounced in July and we are not sure if it is an anomaly or the beginning of a more similar slowdown. By fall we will know."

"It is almost certain the next stage will be that prices begin to drop," said Stephen Levy, director of the Palo Alto-based Center for the Continuing Study of the California Economy. "I think the more expensive homes over $1 million are more vulnerable at this time."

"The July closing numbers are actually sales that occurred in June and the real estate market in Marin is traditionally slow during summer months," Cohn [Real estate broker Patty Cohn, of the Frank Howard Allen Greenbrae office] said [Marinite: uh, that's not true and agents in the past have been quick to point out that a big reason why the summer months are often a good time to sell is that people are out buying houses to relocate before school starts].

"Buyers see homes are not getting snapped up like hotcakes and want to know whether a house they might buy for $1 million will be worth more or less in five years."

Levy cited two types of buyers leaving the market. "The first set is folks who can only buy a house with an exotic mortgage - a very low-rate mortgage or a mortgage where the principle payments were deferred," Levy said. "The second group that left is buyers who were speculating or flipping homes, investors who were not buying to own. When prices stop rising that does not work anymore.

"Prices have stopped rising."