Northern California Profit Report Summary

The attached spreadsheet includes a report of median profits yielded from recent re-sales of existing single-family homes (SFRs) in the San Francisco Bay Area during the month of November, 2006. The data set includes only properties for which both the current and the prior sales were known to be arm’s length, market-value sales in the counties of: Alameda, Contra Costa, Marin, Monterey, Napa, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano, Sonoma. Only SFRs (houses) were studied; the data set did not include condominiums or townhouses. Key findings of this data set include:

1. The median time between sales ranged from 49 months (four years, one month) for Napa County to the slower turnover pace of 80 months (six years, eight months) in Monterey County.
2. Homeowners who resold their residences almost always made a great deal of money, with implied dollar gains from $194,752 in Solano County to $368,500 in San Mateo County.
3. Homeowners who resold their residences almost always realized high profit rates, with implied gains ranging from 63 percent in Santa Clara County to 123 percent in Monterey County.
4. The implied annualized profit rates, computed from the implied profit percentages and the median time between sales, ranged from 8.5 percent per year in Marin County to 13.9 percent per year in Napa County.
5. Very few homeowners lost money upon resale (from 1.7 percent in Napa County to 5.6 percent in Marin County).
6. In all of the eleven counties, more than half of the resales were done with 50% or more profit over the previous sale. In all but one of the counties, more than 40% of the resales yielded more than 100 percent profit over the previous sale.

For further information or to schedule an interview with Dr. Christopher Cagan, director of research and analytics, please contact Carrie Gaska at (714)250-6759 or by email at cgaska@firstam.com.

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