"Costs rose 27 percent for gypsum boards, 20 percent for plastics, 11 percent for cement, and 6 percent for sheet metal siding. According to the Consumer Price Index, housing costs edged up 4 percent for borrowers from July 2005."

In contrast, in Davis, sales were the highest since early 2004, with 75 escrows closed.

An interesting and contentious issue in the history of real property law has been: Under what circumstances must a seller disclose the occurrence of a death in a home placed up for sale?  In a famous case read by every first-year law student, a court concluded that where a home's previous owner had been the victim of a violent murder, potential buyers must be advised of this fact.  In a similar vein, another court held that a seller was required to disclose that his home was widely believed to be "haunted."

At any rate, the NY Times has an interesting article on this general subject today.  Here is a link to it.

The end of interest rate increases would be good news for both the housing market and the stock market.  I have been concerned for several months that the Fed would (once again) overdo the rate increases, and push interest rate sensitive sectors of the economy, the housing market in particular, into a steep downturn.  If rates stabilize now, before housing prices have seen a serious downturn (only about 10% from the peak in Davis so far), the mythical "soft landing" in the housing market, followed by a period of slow but steady appreciation, could become reality.

Normally, we see a concomitant flood of Spring buyers.  But this year, the record rainfall has slowed buyer activity significantly.  However, I am cautiously optimistic based on the increased sales activity in March, and solid leading indicators such as website traffic and buyer contacts to my office.

The main practical issue this gives rise to among average Davis residents is:  "Which elementary school is going to be closed?"

On a more philosophical level, one is tempted to ask, "What type of community is Davis becoming?"  And it is hard to miss the irony of the situation:  The support-system for kids in Davis (schools and otherwise) has contributed to extremely high home prices, which in turn has priced-out the vast majority of people with school-aged kids.

The million dollar-plus range is another story.  There were no sales over one million in March, while several new listings in that category emerged.

Still, this median price increase is not to be blindly taken as a sign that the hot market is back.  For one thing, February 2006 sales volume was down almost 50% from February 2005, with only 24 sales of residential non-investment units.  For another, the time on market has increased from an average of 22 days in both February 2005 and July 2005 to 55 days now.  Generally, the time on market figures appear to have leveled off for the time being.  The next few months will tell us much about how 2006 will shape-up for the Davis real estate market.

In other news, loan defaults in the Sacramento region are on the rise.  This problem could get worse if home values continue to fall, as they have since about July, according to my analysis.  Aside from homeowners' pure inability to make payments, defaults also occur when people conclude that the amount of money they will save by defaulting on a mortgage exceeds the cost of the negative credit consequences associated with that action.  For example, if someone owes $100,000 more on their mortgage than their home is worth, and is living a poor lifestyle in order to make payments, they may quit the mortgage.  The bank takes the house, but the loan goes away.  If this set of economic incentives becomes prominent, we may see more foreclosure sales.

The net result of this vote is that Davis has removed itself from the planning process.  No developer will bother talking to the City of Davis, because there is no way any significant project can be approved by voters, even if all the Measure X opponents endorsed it.  Davis voters simply won't vote for development, period.  As a result, Yolo County is now the forum in which growth on Davis' border will be debated and planned.  The Bee has an interesting article about this issue here.

Hopefully, the local real estate market, which has been very slow as the election approached, will begin to pick-up now that the uncertainty of the election is removed.

The Biz Journal has an article surveying the national housing market.

Covell Village represents the most ambitious planning effort I've ever heard of anywhere.  It provides the City of Davis with a roadmap for slow (probably too slow) growth until at least 2018.  I offer my complements to the hundreds of the people who have worked so hard to bring to project to this point.

I'm very excited about this project.  I think it will usher in a boom-time for Davis, with thousands of local craftsmen, engineers, business persons, professionals, and artisans (among others) collaborating to build a collectively-conceived and constructed work of art.  The project will surely garner national and international attention once it's complete.  Here's looking forward to November.

This case demonstrates that lawsuits are going to be a major barrier to small, high density "infill" developments in Davis, as envisioned by some slow-growth advocates.  People simply don't like having their neighborhoods redeveloped with crammed-together town houses, and are likely to sue anyone who tries to undertake such a project.  And small projects cannot shoulder the astronomical legal and consulting fees associated with preparing a full environmental impact report, to say nothing of the costs of defending against a CEQA lawsuit.

Home prices in Yolo county were up, on average, 31% in the year-over-year period.  That is an increase of 2.58% per month.  Anyone thinking about buying a home in the near future would be well-advised to consider this number carefully, especially if they have a fixed budget ceiling. Put simply, a typical $500,000 home is quickly shrinking and its condition rapidly deteriorating.  If this trend continues, a $500,000 home today will be a $538,700 home this Spring, and a $655,000 home a