After eight years of double digit growth in appreciation, the market is cooling. In the years up to 2004, appreciation rates were 20% annually. In 2004 they were 25%, 2005 they dipped below 20% and 2006 is on track to having only a 5% appreciation rate.
In Brentwood, which is a San Francisco suburb, the market is very tight. Houses sell in less than 30 days and often have multiple offers over the asking price. The average sale price is $410K, which is 10-15% higher than July 2005 prices. The majority of buyers are 1st time homeowners.
Simi Valley, which is close to LA, is in a little cooler of a market. The market is 50/50 when it comes to buyers and sellers, and houses will be on the market for 60-90 before an offer comes in. The average sale price is $603 which is close to last years prices. The lower priced houses are selling very quickly and getting full asking price, while higher end houses are taking longer and getting 90-95% of the asking price.