Posted by: Donald Diltz | January 31, 2012

Looking For Leads in All The Wrong Places

Looking For Leads in All The Wrong Places

I’m sold on social media as just one more way to touch client/sphere/prospects.  But how does it lead to new listings?  … new customers?  I think the answer is the same as the answer as how does calling through your database lead to more business.  Real estate is a contact sport.  This brief article provides a couple of flow charts.  Not for the faint of heart, but lets face it – real estate customer acquisition is sales – prospecting, follow up, closing.  Here is a view of the social networking book of activities.

Take a look.

San Francisco

On a cold clear morning

Those of us who have lived in the Bay Area for years know that this region has always been a little different from the rest of the country.  And most of us are glad that’s so! The state of the housing market is one more example of the Bay Area running counter to national norms. 

Anyone who watches the network news or reads a national publication can’t help but come away feeling that every housing market in the country is suffering equally, thanks to a glut of inventory and a lack of qualified homebuyers.  And while that’s true in some outlying areas of the Bay, it’s generally incorrect in most of our region. 

To the contrary, we continue to see growing demand by very serious buyers looking to purchase homes. And while some are scouring the landscape for bargain basement distressed properties, and most will gravitate toward a “deal”, many are seeking good, well-maintained homes at fair prices. And there continues to be a very strong demand for properties in the middle and upper ends of the market, including million-dollar homes. 

The real problem we’re facing here in the Bay Area isn’t a lack of buyers; it’s a lack of sellers. Many homeowners who would like to sell their homes have been sitting on the sidelines, still believing that the market is in the depths of a recession. They still fear that they will have to take drastic price cuts in order to sell.

 I’m afraid that the news hasn’t gotten out to them that things have changed for the better over the past year or two. Sellers no longer must sell their properties at fire-sale prices to get buyers attention. In fact, fairly priced homes that are well maintained and in good neighborhoods are not only being sold quickly these days, but in some cases with multiple offers.

 What makes the Bay Area different from the rest of the country, which is still battling a very sluggish housing market? It starts with our strong economy.

 As a result of vibrant high-tech, biotech and social media industries from Silicon Valley up the Peninsula to San Francisco, the Bay Area is home to some of the best-paid knowledge workers in the country. These are well-educated engineers, programmers, financiers, and other highly educated professionals with money to invest and a desire to own a home. Add to that the supporting cast of back-office and headquarters jobs that have been created by thriving tech companies over the years and it’s easy to understand why demand for the Bay Area’s limited housing has never been stronger.

 Local Market Monitor, a national firm that analyzes housing markets for the banking industry, recently issued a three-year forecast of the best and worst housing markets in the country out of the 100 largest markets that it covers. Ranking second in the nation – the San Jose-Sunnyvale-Santa Clara housing market.

 Home prices in Silicon Valley “are close to a bottom…and there’s already a good recovery underway in the job market, driven by high-tech manufacturing and technology services. Income levels are high, and population growth is slightly above average.”

 During the housing boom (between 2002 and 2007), home prices rose 43% followed by a 21% drop, the report showed. “The San Jose recovery is clearly connected to the high-tech sector…and during the recession, 30,000 tech jobs were lost, but 16,000 have been regained since 2009. These are high-paying jobs that affect the housing market,” Local Market Monitor added.

 While no one is predicting an immediate return to the red-hot housing market of years ago, clearly things are looking up for much of the Bay Area.

 For sellers who have been holding off listing their properties, I would strongly urge them to reconsider. Right now the math is in a reluctant seller’s favor. Interest rates remain near historic lows, the economy is gradually improving, and the Bay Area has more than its share of anxious buyers trying to purchase a home – but not enough homes to meet that demand.

 The sum of these conditions mean that the balance between supply and demand is actually tipping in many homeowners’ favor, as hard as that is to believe after what we went through in recent years. This could very well be a surprisingly good time to sell a home, before everyone else catches on to the real story of the Bay Area housing market.

 Below is a market-by-market report from local Coldwell Banker offices:

 North Bay – There seems to be an excitement and energy in the air, with large numbers of potential buyers attending Sunday open houses, our Southern Marin office reports. Homes that have been sitting from last year are getting offers.  Sales activity and inventory are both increasing again. And there have been 10 ratified offers in local market of late. Our Greenbrae manager says sales activity and inventory have been steady recently with five ratified offers in the past couple of weeks. In Northern Marin, both sales activity and inventory levels have declined in recent weeks.  Our Northern Marin office reports two ratified offers recently. The big challenge for Santa Rosa agents is a lack of inventory in the local market. Inventory levels in the under-$500k price range at the end of December were less than 1.5 months’ worth of homes. In the $1M plus category the inventory levels are high. REO and short sales activity are still having a significant impact, putting downward pressure on prices. Many agents have a good number of qualified buyers they are working with and are just looking for good inventory to sell. In Sebastopol, inventory is also down but sales activity is increasing. Agents are seeing big crowds at open houses.

 San Francisco – Our San Francisco Lakeside office managing broker says his office is starved for inventory.  Each agent seems to have a handful of buyers who would jump on the right property if it came available but inventory is about half of what it was last year at this time.  There has been no New Year’s listing surge as yet, according to our San Francisco Lombard office manager. Agents are in need of inventory at all levels. One fixer-upper brought 10 offers, he said. The Market Street office says it is still waiting for a surge of new listing inventory after the holidays.   There continues to be a shortage of listing inventory and a pent up buyer demand for new property.   Well priced, or even slightly underpriced, listings are seeing multiple bids regularly.   Open house traffic is very busy, and there are a lot of new homebuyers out there, particularly first time buyers, who are unaccompanied by agents.    Listing agents are encouraging sellers to refrain from waiting for the usual spring season and asking owners to get their homes ready to sell now.  Our Sunset office manager reports a very slow start for the first two weeks of the year.  Open houses are still very active with many buyers looking but lack of inventory is hurting sales activity. Finally, the San Francisco Van Ness office says the market has been fairly steady at the beginning of 2012 with 14 ratified offers, two of which were multiple offers.

 SF Peninsula — There’s been a slight movement forward in the local market, according to our Burlingame North office manager. The South Bay activity should be prompting activity up the Peninsula, but many people are still on the sidelines waiting for more positive news, which is starting to emerge slowly. Across the hills, our Half Moon Bay manager said it has been a good beginning to 2012. There is more activity in all segments of the market and agents say that sellers are pricing their homes more realistically for today’s market. There has been a fair amount of ‘underground’ work going on – deals being teed up and will be completed zoom – according to our Menlo Park manager. In Palo Alto, our local office reports that the market has started the year extremely slow.  Extremely low inventory is taking its toll on sales, not only in Palo Alto but the surrounding areas as well. Portola Valley’s manager also reports low inventory and slower sales activity. In Redwood City, our local office says serious buyers are attending open houses and agents are seeing more multiple offers. Our San Mateo manager says agents have noticed very healthy turnouts for open houses in the area.  The local inventory is fresh and getting plenty of interest/offers.

 East Bay – Both sales activity and inventory levels are starting to pick up, our Castro Valley office reports. The office has had 15 open houses in the past couple of weeks. In Fremont, our local manager says there have been 16 ratified offers of late, two of which were multiple, although he reports activity easing. Overall inventory in Livermore is at 12 month low with 152 listings.  Over 81% of the pending sales to date in Livermore were listed at or below $500,000 and 43% of the new pending sales in Livermore were distressed sales. Our local manager says the market needs more good listings. The Oakland/Piedmont market is picking up in all price points. Buyers coming into open houses are fully approved and ready to buy the right home for them. Inventory is low so some of the listings that have been on the market for a while are now going into contract. Agents, buyers, and sellers are very optimistic about 2012. Our Orinda manager says the Lamorinda market is holding steady with 14 ratified offers, four of which were multiple offer situations.  Inventory still remains low in Pleasanton, but the outlook is positive.  With interest rates at an all-time low, buyers are eager to buy homes. Agents just need more homes on the market. Our Walnut Creek manager says prices are still flat. There has been lots of traffic in open homes, but some buyers are still thinking they can wait for better prices.  Nonetheless, new listings are selling quickly –most with multiple offers – as inventory remains low.

 Silicon Valley – Our Los Gatos office continues to be optimistic about the outlook for 2012.  There have been 25 ratified offers in recent weeks, six of which were multiple offer situations. Inventory continues to be very low in the local market.  The agents are searching everywhere for more inventory to sell.  The beginning of the year started with an increase in accepted offers, according to our San Jose Willow Glen manager. His office has seen 15 ratified offers in recent weeks. Similarly, the San Jose Almaden office reports an increase in both inventory and sales activity with 17 ratified offers, most of which were multiple offers. Energy is picking up significantly in the Saratoga area after a slow start to the year. Agents are active and working their new pipeline. Our local manager is anticipating strong inventory growth over the next few weeks.

 South County – South County is experiencing a huge drop off in inventory. Gilroy inventory is hovering below 90 homes. As a result, we are seeing a surge of buyer interest with almost every transaction having multiple offers. Our Gilroy office held its first Open House Extravaganza recently, with great success. Most open houses were attended double the average number of attendees at a normal open house. Sales are off to a fast-paced start for January – not the norm. There is an old saying in real estate—“the market doesn’t really pick up until after the Super Bowl.”  Morgan Hill and Gilroy agents alike are reporting, however, that despite “49er Fever”—attendance at open houses was somewhat remarkable the past couple of weeks.   Buyer interest is certainly high and with the dwindling inventory, buyers are finding fewer homes from which to choose.  The average sales price in 2011 for homes sold by the Morgan Hill office was $458,000, down from $475,000 the previous year.   The softening of prices coupled with great interest rates certainly reiterate why this is an excellent time to buy.  Because of the low inventory, however, buyers are finding that they need to make a quick decision when a well-priced home that shows well comes on the market.

Posted by: Donald Diltz | December 26, 2011

Market Watch – December 26, 2011

 

  

Improving Economy Should Help Bay Area

Housing Market Gain Momentum in 2012

The Bay Area housing market is seeing the usual year-end slowdown as buyers, sellers and yes – even agents – turn their attention to the holidays, family and friends, and last minute shopping. There are pockets of activity here and there as focused buyers compete for limited inventory, determined to wrap up transactions before 2011 closes for tax purposes. But for the most part, the year is ending fairly quietly as always.

2011 has been a wild rollercoaster ride for the nation’s housing market, the economy, the financial markets and geopolitical events. Volatility is the new normal, as some Wall Street pundits have observed. Still, through all this, there is reason for hope that the real estate sector could see better days very soon.

Economic indicators here in the U.S., as well as corporate financial reports, continue to point higher. The job market, consumer confidence, and consumer spending all continue to show decent improvement as the year draws to a close. All of these indicators are critical for a healthy housing market.

The labor department reported this week that new jobless claims hit a 3-1/2 year low last week, adding further evidence that the economy may be gaining momentum. Initial claims for state unemployment benefits dropped to a seasonally adjusted 364,000, down 4,000 from the previous report. That was the lowest amount since April 2008. In November, the unemployment rate also dropped to 8.6 percent, a two and a half year low.

Also reported this week, a widely followed measure of consumer confidence showed solid improvement. The Thomson Reuters University of Michigan’s final reading on the overall index on consumer sentiment rose to 69.9 points in December from 64.1 the previous month, a sign that Americans are feeling better about the economy’s prospects for 2012.

Finally, the Commerce Department said that the nation’s GDP grew at a 1.8 percent annual rate in the July-September quarter, down from the previously estimated 2 percent. Spending on health care dropped by $2.2 billion to drive the revision slightly lower. But encouraging news in the report showed that spending on durable goods was stronger than previously estimated, an indication that consumers still have a strong appetite to spend their money despite the economic challenges.

While the recent reports all indicate the economy could be gaining momentum, we know that there are still economic headwinds that could slow the economy and the housing recovery – the European debt situation, the squabbling in Washington and the still high unemployment rate. Nonetheless, we’re moving in the right direction. And if we see this trend continue, it bodes very well for our housing market here in the Bay Area in 2012.

Thank you for taking the time to read Weekly Market Watch throughout this year. I really appreciate your interest and your feedback. I hope you have a wonderful holiday season and best wishes for a happy and healthy New Year!

Below is a market-by-market report from our local offices:

North Bay – In Northern Marin County, it is very slow right now. Inventory has been falling in recent weeks.  The Market Action Index, which measures Buyers/Sellers’ “Advantage Zone,” shows we are in a strong buyer’s market, which is no surprise to anyone selling real estate in this area.  Our Southern Marin office says there are currently 117 properties on the MLS, which have been on the market for an average of 158 days. Total unit sales are up in Southern Marin versus a year ago (YTD) but the last two weeks have slowed down in all price ranges. The number of sales in the $2 million plus range in Mill Valley and Tiburon year to date is down 42% and 35% respectively.  Belvedere is equal to a year ago and Sausalito is up 50%.     In Santa Rosa, our local office has seen strong activity with 54 ratified offers in recent weeks, including four multiple offers. Sebastopol agents report exceptional activity at open houses for this time of year. Agents are still struggling with appraisals and lender requirements but on the flip side they are also seeing lots of cash sales.

San Francisco – San Francisco Lakeside’s office manager says inventory just keeps dropping.  Buyers who are serious are feeling frustrated with few new listings to see and pouncing on properties that meet their need  – but only if they are well priced, and then they are not backing off from offering more than the asking price. Our Market Street office is still seeing a flurry of activity as we approach the year-end.   One third of contracts saw multiple offers, as demand is still strong and property priced well commands significant interest.   One interesting observation is that property that has been on the market for some time that had not previously seen interest is now selling.  Three properties in SF all actively being marketed for over 120 days finally saw ratified contracts in December, which speaks to the diminishing inventory versus the pent up demand to buy property here in the city. The Sunset office reports decreasing inventory but steady sales activity.

SF Peninsula — Our Burlingame manager says there is a large group of very “pent up” buyers who are looking for that perfect family home. They are ready to buy, financially qualified and will make an offer as soon as the right home comes on the market. This would seem to be a good indication of an early spring market. It’s a great time to be a seller. The Burlingame North office says they’re seeing the normal holiday slow activity with a slight increase in sales. In the Previews high-end segment, many listings are coming off the market for the holidays although there are still very motivated buyers looking at this time. It appears that there is a lot of inventory waiting to come on in Jan/Feb. Across the hills in Half Moon Bay, some properties coming off the market to refresh the DOM and putting the homes back on in mid-January. Agents are still working at putting last minute offers together. It’s a good time to put an offer in front of sellers. Things have slowed down in Redwood City with both inventory and sales activity easing.

East Bay – Berkeley agents are still busy showing property, writing offers, saving deals and closing.  They’re looking at December as the first month of 2012, time to renew ones energies, create leads, and plan for a great 2012.  There is optimism among agents – No exponential leaps, just steady determination and appreciation for the several signs of recovery. The overall active inventory in Livermore hit another low for the year with 208 listings on the market. Total pending sales in Livermore continue to decline with 234 properties in escrow.  Only serious buyers and serious sellers are in the real estate market today.  In the last couple of weeks the Previews inventory in Livermore has declined from 21 listings to 16 listings on the market.  The inventory level of Preview homes in Livermore is very close to low inventory level for 2011. Our Oakland/Piedmont office reports a property offered at $1.95 million that was not on the MLS went into contract within 3 days. The rest of the market activity is slowing down due to the holiday season. Very few new listings are coming on the market now; most are waiting until after the first of the year. Buyers who are attending our open houses are looking but letting the agents know that they are just starting their search, waiting for the new year to buy. The Lamorinda market remains steady, our local manager says. Buyer’s still out there in Pleasanton making offers on the right-priced homes.  Inventory is still low. In Walnut Creek, our local manager says there continues to be very low inventory, multiple offers on most properties, and appraisals coming in a little higher on some sales.

Silicon Valley – Our Cupertino manager says both listings and sales activity are down with most buyers and sellers in a holiday and vacation state of mind. Similarly, listings and sales are down in Los Altos but new single-family home listings in good school district continue to draw buyer interest. The high end between $1-$2M is active due to low inventory, but when you move up to $2-5M it slows down to about the same as the previous quarter at 3 months of available inventory.  Above $5M is slower but still has activity. Our Los Gatos office says the last two weeks have been very exciting to say the least.  Our office recorded the highest residential sale in the history of Santa Cruz County at $7 million, the third highest sale in the history of Los Gatos listed at $15 million and closed an Atherton sale for $6.5 million. The holiday slowdown has hit, according to our Menlo Park manager, with both listings and sales tapering off. In San Jose, the Almaden office manager says there are very few new listings.  Those that hit the market are selling within days provided they are priced at or near the most recent sales.  People are willing to pay quite a bit more for fully remodeled homes.  Recently in a local neighborhood, a turnkey seller got $649K for the same size house that sold weeks later that only had new carpet and paint at $545K. Open houses continue to show lots of activity, according to our San Jose Main office. Many open homes had more than 15 groups over the weekend. Low rates and low inventory are creating excitement in the market. Many of the sales the past two weeks have been “multiple offer” sales in all price ranges. And our San Jose Willow Glen manager reports that even after the Thanksgiving holiday, agents turned in six ratified contracts and there were seven closings delivered on Monday. Our Saratoga manager says the holiday mode is in full swing. Agents are working hard to develop business for next year though.

South County – We are seeing a huge decline in the inventories of Gilroy and Morgan Hill, our Gilroy manager reports. Gilroy only has two months worth of supply. Hollister has seen an increase in inventory, although that community only has about 2.5 months worth of supply. Well-priced homes are getting multiple offers. Prices have stabilized, and South Santa Clara County and San Benito County continue to be a great buy. According to our Morgan Hill manager, 2011 started out very slowly, then, during the mid part of the year, really took off.  The last three months, however, showed a sharp decline—revealing a graph that is an almost perfect “bell-shaped” curve.   During the last months of this year, homes stayed on the market an average of 150 days before garnering an offer compared to 99 days for May thru August.  Inventory remains very low, with only 125 Morgan Hill homes currently listed on the MLS.  On the positive side, demand remains high, interest rates are good and agents are reporting fairly good attendance at open houses.

Santa Cruz – Sales for Santa Cruz County continue tracking about the same they have all year.  The local market is relatively flat; closed home sales will be up slightly from last year – about 5%.  The inventory is down year over year and currently there are about 800+ single-family residences for sale in Santa Cruz County. Agents are struggling to find good inventory for their buyers. And once again, good properties, priced competitively, are selling, some with multiple offers.  The overall market has been and continues to be heavily impacted by the number of “distressed properties” which is hovering just under the 50% of the total market.  This inventory is impacting pricing on “equity sales” and driving prices downward.  The median price for the County is under $500,000 and our median for our three offices last month was in the mid-$400,000’s, down from the mid to high $500,000 last year.   We are also seeing more Short Sales in the over-$800,000 price point.  On a brighter note, an Aptos Agent sold a property this week for over $2 million – exciting as those sales are few and far between these days.

 

Monterey Peninsula – Our local Peninsula offices continue to be amazed at the steady pace of activity going on in the marketplace even as we head into the holidays when minds are usually more into holiday activities.  Between these appealing prices and the low, low mortgage rates right now, it appears that we still have many folks who feel they should act now in buying homes. They’ve had 28 ratified offers in recent weeks, including two multiple offers.

 

That’s it for now. Have a great 2012 everyone!

Rick

Rick Turley

President, San Francisco Bay Area

Coldwell Banker Residential Brokerage

tel 415.437.4505

rturley@cbnorcal.com

Posted by: Donald Diltz | October 21, 2011

Failed Transaction Rate Up to 18% – Take Heed!

Wells Fargo reported yesterday that existing home sales declined slightly in September to a rate of 4.9 million from a little over 5 million.  More remarkable is that NAR said DFTs continued at a rate of 16-18% since June of this year up from rates under 10% since all of 2010 and earlier 2011.  Home price changes depend entirely on specifics of locale, type of home and price range; the high end has plenty of buyer lately indicating the smart money says this is a good time to buy.

The high rate of failed transactions is indicative of the high level of buyer anxiety and is a huge threat to home sellers.  It may also portend of softer demand over the winter months. 

TAKE HOME MESSAGE – As usual it is important to price well.  Even more than usual, it is important that the disclosure process be complete prior to entering a contract.  Discovery of new information by a buyer during the escrow period can be the death knell of the deal and remarketing will be tagged by the failed sale.

Posted by: Donald Diltz | August 28, 2011

Rick DeLuca – Finish 2011 Strong – 90 Day Plan

Rick DeLuca is a renowned real estate trainer with a perfect message for our market – very much back to basics.  He is coming to SF for a special Workshop in business planning focussed on a strong finish to 2011 as a ramp to a terrific 2012.

Friday, September 9 – rsvp to don@SFLakeside.com

It was a busy week for economic news, much of it encouraging. Perhaps the most positive data came out on Friday, showing that U.S. consumers grew more confident in May than a month earlier as declining gasoline prices helped lift Americans’ spirits.

The Thomson Reuters/University of Michigan final index of consumer sentiment increased faster than expected to a three-month high of 74.3 from 69.8 in April. Economists had forecast a reading of 72.4, the same as the preliminary figure issued earlier this month, according to the median estimate in a Bloomberg News survey.

The upward trend is encouraging for those of us in the housing market. As real estate people know all too well, consumer confidence plays a critical role in the housing market. If buyers are positive about their job prospects and the overall economy, they’re more likely to take the leap into buying a home or trading up to a larger one.

Also encouraging: U.S. corporate earnings continue to improve. In a new report, Deutsche Bank said that earnings for the first quarter beat analyst median forecast by a full 50%. Earnings for the three-month period surged 18 percent year-over-year, far exceeding the 12 percent expectation at the beginning of the quarter.

This marked the ninth consecutive quarter of sequential earnings growth. Earnings were driven by cyclical sectors such as Materials (up 55 percent), Energy (up 40 percent) and Industrials (34 percent). Altogether, revenues rose by a healthy 9 percent for the quarter, an indication that earnings were not solely driven by cost cutting, a very good sign.

But despite the overall improvement in the economy and the financial markets, the nation’s housing market overall continues to struggle to gain momentum. Pending sales of existing U.S. homes dropped more than expected in April to touch a seven-month low, the National Association of Realtors reported on Friday.

NAR’s Pending Home Sales Index dropped 11.6 percent to 81.9 in April, the lowest since September. Pending home sales lead existing home sales by a month or two. Economists, who had expected pending home sales to fall 1.0 percent last month, said bad weather in some parts of the country might have affected home shopping.

So what to make of the mixed bag? Overall, the nation’s economic recovery is moving forward, albeit at a modest pace. Nationally, the housing market is fighting to work through the overhang of foreclosed and distressed properties. It’s not easy, and will take time. But it will happen.

However, more than ever, we’re reminded of how much real estate is about location, location, location. Things are far better here in the Bay Area. The overall market is much more stable than elsewhere in the nation, and in some pockets, it’s fairly robust.  We continue to have multiple offers in all our offices.  Not every property for sure, and not all multiple offers are well over the asking price.  But this is a strong indication of Bay Area buyer demand that most of the nation is not experiencing today.  In several office visits this week I heard different variations on a common theme:  “It seems I get one of two results; either a few multiple offers within first 7 to 10 days, or I’m getting a price reduction 30 days later.”  Thoughtful and strategic pricing, combined with staging interior and exterior of property are key elements to having the best chance at multiple offers.

Coldwell Banker Residential Brokerage’s luxury housing market reports out this week continue to show strong demand for high-end properties in particular.

Million-dollar home sales in Silicon Valley continued to improve in April with sales up from the previous month and year ago. A total of 237 homes sold for more than $1 million in Santa Clara County last month – the most sales since last July. Additionally, multi-million-dollar sales also jumped with 42 transactions over $2 million, up from just 32 a year ago.

East Bay million-dollar home sales continued their 2011 rally as well. A total of 105 homes sold for more than $1 million in Alameda and Contra Costa Counties in April, up nearly 17 percent from the 90 sales in March. The median sale price also edged up 1.2 percent last month to $1,275,000. The totals were shy of last year’s figures, however. The one downside in the luxury market this past month was Marin County. After surging in March, luxury home sales and the median sale price in Marin took a breather in April with both indicators down marginally from the previous month and a year ago.  Nonetheless, the county’s high-end market has seen good improvement overall in 2011.

Below is a market-by-market report from our local offices:

North Bay – The Greenbrae office reports that inventory is on the rise, but sales activity has been easing a bit in May. Nonetheless, one property on at $975k in Corte Madera received nine offers – a pretty good sign that there are buyers out there ready to go when they see a property they like.  This are just starting to perk up again as we approach June. There have been several $5 million properties go into escrow, a good sign for the Previews market. In Northern Marin, our local manager says they have seen an increase in both new listings, many of which are organic, and listing price points. The open houses continue to be well attended by potential buyers looking for just the right property. In Petaluma, the market has been steady and open homes in all price ranges have been well attended, most in the double digits. Buyers are competing with multiple offers in most price ranges. Inventory is coming on strong in the $900,000 to $1.8-million price range. In Santa Rosa, the local market is seeing improving sales and inventory. The pace of new sales and closings is still ahead of new listings and open houses are well attended. Similarly in Sebastopol, both sales and inventory are increasing. Inexpensive inventory continues to sell well. The majority of our sales this past week were below $400k. The number of visitors to open houses for the most part remains in the double digits. Agents report many instances where they are not getting their calls or emails returned by listing agents. We have also seen an upswing in walk-in traffic. Finally, our Southern Marin office reports a steady local market. A number of our Previews listings went into contract in the last two weeks, from $2 million to $3.5 million.   Strong negotiating seems to be the name of the game, but ultimately they seem to get into contract.

San Francisco – Sales activity is improving, our Lakeside office says. Inventory of quality well priced homes is low and sells right away when it comes on the market.  Homes in questionable condition, or short sales, sit unless they are bargain priced.  Buyers complain they would like to buy but can’t find the right place at the right priced, then go in droves for multiple offers when something good comes on the market. Our Lombard manager also says the local market is on the rise. There has been good open house traffic and an improving number of sales through May. Each sale takes a realistic seller and a buyer not always looking for a bargain – just the right price. The Sunset office says that market has been stable. Open houses are well attended.  There seems to be more negotiations from beginning to closing.  Buyers are more demanding in terms of price and condition of the property.   Deals are taking much longer to close with re-negotiation after inspections. Finally, our Van Ness office reports both sales and inventory on the rise. There were 32 ratified offers in recent weeks, five of which attracted multiple offers.

SF Peninsula — Our Burlingame office says that more expensive homes are starting to move – many off market deals being made. First multiple offer on $4 million dollar property (had six offers). Still having all cash deals on high end. Across the hills in Half Moon Bay, the market has been steady in terms of both sales and new inventory. Our Menlo Park office is starting to see investor groups (both local and off shore) buying big-ticket properties in both Menlo Park and Atherton. This is a fairly new trend.  Many investors believe that real estate is a safe haven for money as other instruments are producing such low returns. We are in a very healthy market and sellers are, for the most part, in control. Our Redwood City office says that everything is very quiet locally, with both listings and sales activity very slow. There are still many buyers on the fence, our San Mateo office says, pointing to traffic counts at open houses.  Buyers are still walking and talking but many still aren’t moving forward, possibly out of fear of the unknown future and possibly because there isn’t enough quality inventory in their view.

East Bay – Sales activity is on the rise, reports our Berkeley office. Agents are suddenly feeling quite busy, writing and presenting offers for new clients and for those who have been fence sitting. Our local brokers’ tour was five pages this past week, up from the two, three or four previously this year. Castro Valley sales are increasing while inventory activity has been steady. Both sales and inventory are on the rise in Livermore, although it varies depending on market segment and week. Total pending sales have increased by 12% in Dublin in the past six weeks and have been stable in Livermore and Pleasanton. Inventory has increased by 13% in Livermore and 23% in Pleasanton, but dropped by 16% in Dublin.  In Orinda, things are definitely picking up. Inventory is increasing and homes that have been on the market for some time are selling. Buyers are aggressively pursuing good deals with some homes selling at or above asking price. Our Pleasanton office reports that buyers are out there but if homes are not priced right at fair market value they are going to sit on the market longer. Finally, our Walnut Creek office says that sales activity in general has been decreasing lately. But when a well-priced, beautifully stage listing comes on the market, it will receive multiple offers, not necessarily much above asking price.  This occurs in most every corner of our market.  In East Contra Costa County, Antioch, Pittsburg, Brentwood, etc, there’s multiple offers on most listings causing prices to increase slightly.

Silicon Valley – The momentum seems to be slowing a bit in Cupertino. The best properties are still getting lots of attention, but there is less of a sense of urgency for the majority of the market as inventory continues to increase. Our Los Altos manager reports that both sales and inventory are improving. The market is doing particularly well in the good school districts and in single-family homes, while condo sales remain slow. The local market is picking up steam, according to our Los Gatos manager. A listing in Saratoga priced at market value just under $2.2 million went pending in seven days with four offers over list price.  They are continuing to see a high influx of buyers coming from the Pacific Rim with large down payments looking for good schools.  There is still a lack of good inventory for buyers, especially in the entry-level markets.  Palo Alto remains an extremely strong market with multiple offers in excess of 10% to 20% over list price, in many cases.  The scarcity of inventory makes it extremely hard for buyers to get into the market right now.  The Woodside upper end is still slowing warming up. Other sales are pretty good in the area, but buyers are still cautious.  In the San Jose Almaden area, inventory is on the rise while sales activity has tapered off. Inventory has risen in the last 45 days from 79 active listings to 111, while the number of pending sales has decreased.   The same can be said for Blossom Valley and Cambrian markets as well.  Now more than ever, coming out at the right price is most important.  We are seeing price reductions on properties that in Feb or March would have sold.  Buyers appear to have taken a “wait and see” approach. The story is echoed in Willow Glen, where listings appear to be sitting a lot longer and listing prices are being reduced as well, according to our local office. Our Saratoga manager says the market has been steady, although transactions seem to be more difficult to hold together.

South County – Market activity has been slightly up from the previous two weeks, according to our Gilroy office. Open house activity is greater with buyers ready to make offers vs. “just looking.” Morgan Hill agents have managed to put 42 homes into contract so far for the month of May.  Sales vary from $1.2 million to as low as $175,000.  Demand remains high in all price ranges and well-priced, well-maintained homes get lots of attention from the buying public.  About 40% of the business in South County still involves a short sale or an REO Property.  Savvy listing agents, however, have learned to navigate through the short sale process in a more expeditious manner—streamlining response times and closing these kinds of sales faster.   Though the word “recovery” is over-used, it does seem that the local real estate market is headed in the right direction.

Santa Cruz and Monterey Peninsula – Sales activity continues to be steady throughout Santa Cruz County.  Through April, countywide, sales are currently on pace to exceed last year as evidenced by the 16% increase in closed units through April, year over year. Inventory levels are on par with inventory in 2010 with average days on market being slightly longer at 99 days vs. 74 last year.  The properties that are priced well, staged, and in desirable areas are selling, although the median price from the same time last year is down about a $100,000.  Memorial Day officially kicks off the Santa Cruz Summer Season and we do have an influx of vacationers who visit this beautiful area, fall in love, and buy.  The next 3 months should be very busy for our agents. On the Monterey Peninsula, the local housing market on the Peninsula has seen inventory increasing and sales activity steady. There have been 34 ratified offers, many of them multiple offers, in recent weeks.

That’s it for now. Have a good holiday weekend!

Rick

Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage

View from 2950 Vallejo St - 2011 Decorator Showcase

First of all, the weather was perfect – warm, sunny and crystal clear.  The food was plentiful (though a bit meaty for us vegetarians) and the libations were liberal.   What a great way to support education: Click Here for the Decorator Showcase Website.

 

2950 Vallejo - Decorator Showcase Home 2011

The home itself is spectacular, and the usual odd juxtaposition of decorator upon decorator seemed to work out perfectly.  Of particular merit were the unusual finishes that many decorators found to use – a bathtub of metal infused cement, pewter finished counter tops, etched mylar stained “glass” windows, faux marble plaster finished in place, 6 layers of laquer paint.  Really remarkable.

 

And the company was pretty great, too.  Mostly CB agents for this exclusive Coldwell Banker event, a good representation of A-List clients, and a few hand picked friends from around the City.

 

The Sacramento Bee reported further job gains in our state and, particularly, in San Francisco and Silicon Valley.  Linked-In had the most successful internet IPO since Google.  This is what we’re looking for folks – improvement in the local economy.  Remember, real estate transactions ride on the back of this economy and things are looking sweet.

The Palo Alto real estate market is still reported as “on fire”, which is not surprising considering the cash available in the valley.  Linked-In will add fuel to that fire.  And there is always a Santa Ana wind blowing north to SF.  Moreover, SF’s mini silicon valley in South Beach is alive and well and growing.

Don’t get too excited, there will be a dismal report in tomorrow or the next day’s news to dampen the flame, but it looks like we are on a somewhat consistent ride into our next market.

Check out the Sacramento Bee by clicking here.

 Numbers signal market could finally be getting its footing again

 “Home sales catch fire in March”  “Local home sales at 5-year high”.  Before the cynics accuse me of being a “homer” for the housing market, I have to tell you that these aren’t my words, but the opinion of our local news media. Specifically they are headlines from the San Jose Mercury News, Oakland Tribune, and the Santa Rosa Press Democrat. I know that’s a twist, considering some of the negative headlines we’ve seen in the press lately.

As reporter Eve Mitchell and other journalists around the region noted, Bay Area home sales had their best March in four years, with 7,051 new and existing single-family homes and condos changing hands. That was up a whopping 41.3 percent from February. It’s normal for sales to rise from February to March, but last month’s surge was far more than usual.

Certainly historically low home prices are having an impact.  So are historically low interest rates, spurring buyers to jump off the fence. It appears that we’re finally seeing some of the pent-up demand that has been building for the past few years being released into the market – at least here in the Bay Area. Most of our local offices around the Bay are reporting steady to improving sales activity and overall market conditions. Multiple offers, low inventory;  here are just a few examples:

  • There is a lot of pent-up demand up and down the mid-Peninsula. Our Palo Alto office says they’re seeing an extremely strong market with “almost everything below $3.5M getting multiple offers;
  • In the South Bay, our Cupertino office reports buyers are chasing too few good properties. When was the last time you heard that?
  • The Los Gatos market has heated up a lot lately, especially in the lower price ranges where multiple offers are the norm. But even in the upper end, sellers are “feeling more confident putting their homes on the market” and getting a good price;
  • The market in Saratoga is hot, according to our manager there. In the last few days they had one property with eight offers and another with 19 offers. Both sold significantly over the asking price;
  • In the North Bay, our Greenbrae office had a number $2-$4 million homes go into contract recently with a lot of activity in the high-end markets of Ross, Belvedere, Tiburon, Sausalito, Larkspur and Kentfield;
  • And our San Francisco Van Ness office is seeing a strong increase in sales, especially in the higher end properties.

While many parts of the Bay are seeing progress on the housing front, the picture isn’t uniform across the board. Some cities are experiencing stronger markets than others (the Peninsula, Silicon Valley, San Francisco and Southern Marin are particularly strong). In some communities, certain price ranges are hot while others are tepid. And even within a local market, while one property may get a eight or 10 offers, another sits idle waiting for a single buyer.

Nonetheless, the recent uptick in activity in general is providing encouragement to Realtors as well as home sellers. 

In its April 14 report on the Bay Area housing market, DataQuick noted that “a variety of indicators – including investor and cash purchase levels and adjustable-rate loan use – pointed toward a more normal market,” but the firm added that we’re not there yet. “The housing market has certainly moved well back from the abyss of two years ago, but there is quite a ways to go,” said John Walsh, DataQuick’s president.

Walsh noted that the Bay Area has much less of a foreclosure problem than the rest of the state, but distressed properties are still an issue in some counties and a drag on prices. He added that mortgage financing is still problematic for many potential borrowers as well.

The monthly market analysis demonstrated that real estate is really a local business. Several of the higher priced counties in the Bay Area saw strong gains in sales last month, including 10.7% for Marin, 8.6% for San Mateo, 3.9% for Santa Clara, others experience declines. Alameda was down 7%, Solano 7.9%, and Napa 5.9 percent.

So we appear to be moving in the right direction. I’m encouraged that the spring rejuvenation in many of our markets will continue in the months ahead, especially if the economy and the local job market continues to improve. Only time will tell.

Below is a market-by-market report from our local offices:

North Bay – The $500K to $1 million market seems to be the hot segment right now, according to our Greenbrae manager.  There are fewer properties available in the under $500K range. The market is sorely lacking in inventory, down to a three-month supply overall in Marin.  Overall the market is healthy with renewed activity and a buzz that can’t be calculated quite yet.  The Northern Marin market continues to be active in the “bargain” price range with a large part being in short sales and REO’s.  The middle level market is starting to strengthen and show increased activity. The Santa Rosa market has remained steady, according to the local manager. While open house attendance has been high, many buyers seem hesitant to commit. Our Southern Marin office reports that sales are up, although sellers are having a hard time adjusting to current market valuations. Many offers will get close to asking, but sellers are passing. Overall the number of high-end homes sold in Southern Marin is less than a year ago, especially in Mill Valley and Tiburon.  Belvedere and Sausalito are up ever so slightly.  

San Francisco – April off to a good start, our San Francisco Lombard office reports. Open houses are well attended, agents are busy, and some listings yielding 10-15 offers. But buyers still need to have a sense of a “deal.” The $2-3 million market in particular is very active, although it’s slow above $3 million. Our Market Street office says that properties that are priced well are moving fast. They had two deals this week where properties had over asking price offers within a day to two of being on the market.  There are also offers coming in as back up on short sale listings that are aggressively trying to knock the first position out.  The properties that seem to be moving are priced between $1 million and $1.4 million. Open houses are well attended, but inventory is still low, according to our Sunset office.  Agents are working much harder on their deals, as transactions are much harder to close. Finally, our Van Ness office reports that the local market continues to increase in volume, especially in the higher end properties.

SF Peninsula — Our Burlingame office said they are seeing many multiple offers in the $900k to $1.5 million-price range. There are 62 active and 22 pending sales. The local market “has definitely heated up,” our North Burlingame manager says. Across the hills in Half Moon Bay, both sales activity and inventory are on the rise. The high end of the Menlo Park market is still showing strength, our local office says. Some homes are coming onto the market and “going right out the door” if priced right. And buyers absolutely know what is priced right, our local manager points out. Palo Alto continues to enjoy an extremely strong market. Almost everything below $3.5M generally has multiple offers.  As usual, there is a high demand for inventory.  Price points from $5.5 to $6M moving fairly quickly as well.  Open houses have been very strong – condos as well as single family. Our Redwood City office says that the local market has been fairly steady with sales of single-family homes in San Carlos still very active.  It appears that buyers are more willing to make offers even in multiple offer situations. In San Mateo, our local manager says inventory is slim and that which is priced correctly is getting multiple offers.  But even some of the multiple offers on a property still don’t produce a “full price” offer.

East Bay – Sales activity picked up considerably in the past 10 days, according to our Berkeley office. But our Castro Valley office reports the local market has cooled a bit. The local manager said many buyers are afraid due to the uncertainty of the economy and are choosing to rent until the market/economy improves further. A similar story comes from the Fremont, where activity has eased recently. In Livermore, the Previews high-end market has remained very stable in 2011. During the first three months of the year there were six closed Previews property sales. Homes under $350k are moving fast, our Pleasanton manager reports. First time Buyers are eager to make offers. There has been a dramatic increase in inventory, our Orinda manager says, with our local tour doubling in size week over week. This has created a lot of great bargains. Our Oakland manager reports that short sales are still the order of the day, comprising a large percentage of the inventory and ratified offers. There are plenty qualified buyers out on weekends looking at the well-priced inventory in the East Bay. Open house activity was up in most areas with from 12 to 30+ groups going through our listings. Finally, our Walnut Creek office says they are seeing both multiple offers and price reductions.  There continues to be a lack of inventory in certain pockets of their marketplace, with an increased number of short sale listings.

Silicon Valley – The only problem in Cupertino is not enough listings. Lots of buyers chasing too few good properties, our local manager laments. Similarly in Los Altos, the market is improving with listings slowly coming on. Due to the increased publicity of high-end sales, high-end sellers are feeling more confident putting their homes on the market, our Los Gatos office says.  Buyers are beginning to see some opportunities in the high end that were not available in the past.  In the lower ranges, multiple offers are becoming more of the norm rather than the exception. In San Jose, our Almaden manager reports that the market is healthy in the low end to middle range.  Above that it is slow, however. In Willow Glen, meanwhile, sales are progressing. But the closing dates seem to be pushed back quite a bit in many cases due to the lenders. The market in Saratoga is hot, according to our manager there. In the last few days they had one property with eight offers and another with 19 offers. Both sold significantly over the asking price.

South County – A recent article in the San Jose Mercury indicated that the rental market is getting stronger as many younger workers, feeling more confident about job stability, are moving into their own apartments.   This can also be said for the real estate market as well.  The Morgan Hill office is seeing more first-time buyers making and consummating offers.  Interestingly enough, the “move up” market seems to have a renewed energy as well with buyers making and sellers accepting contingent offers.   Open houses are well attended and consumer confidence is better than it has been for quite some time.

Santa Cruz – Looking at the heart of the market – the $500K to $800K range – there are fewer sales occurring, with closed transactions down 16% from the same time last year.  There has also been a drop in inventory from 115 to 80 properties in this price range. But homes are still selling in a relatively short 65-day average. This means that if the home is priced right it will sell and close in two months.    There is a four-month supply of inventory for this price range.  Agents are picking up buyers/sellers at open houses, and for the most part the agents are optimistic and working in this new normal market.

 

Monterey Peninsula – The Monterey Peninsula market continues at a good, steady pace, with more buyers than properties in the lower-priced areas. We are seeing cash buyers buying low-priced homes, which they plan to use as rentals for 5-7 years and then sell, with the idea that the prices will be up by that time and they will cash out at a good profit.  An out-of-town agent was here representing such a buyer with $5 million in cash to buy such properties in Northern California.  Our local manager says about 33% of sales as short sales, which means they will likely take many months to close or may just fall apart before approval.

 

One final note: I want to congratulate Coldwell Banker Residential Brokerage’s 2010 Top One Percent, and offer a special acknowledgement to those superb Realtors who finished among our top 10 in Northern California – Malin Giddings, Nina Hatvany, Tim Allen, Bill Gorman, Keri Nicholas, Royce Cablayan, Tom LeMieux, Bill Lister, Scott Dancer and Dave Clark.

These incredible All Stars are the best of the best in real estate. Together, they were responsible for nearly $1 billion in home sales!  And more than half of these agents ranked among the top 10 in the nation as well, outpacing more than 100,000 Coldwell Banker agents across the country. We’re very proud that the most talented agents in the business work for Coldwell Banker.

That’s it for now. Have a good week!

Rick

Rick Turley

President, San Francisco Bay Area

Coldwell Banker Residential Brokerage

President Rick Turley’s SF Bay Area Market Watch

As I opened the morning paper the other day, I saw a story splashed across the business section suggesting that we might be heading into a “double-dip” housing recession based on the latest S&P Case-Shiller index report. What was ironic was that over the past week, I had just finished meeting with my office managers throughout Northern California ­– most of whom were reporting that their local markets were revving up with great activity, and some markets with a real sense of urgency. What gives?

The paradox made me think that a lot of people – consumers and real estate reporters alike – may not realize that such monthly reports as the Case-Shiller index and even the very popular DataQuick Bay Area market report are really lagging indicators of the housing market. They are in effect old news by the time they are released. These reports are based on closed sales the previous month that actually began two or three months before in many cases.

Take the most recent Case-Shiller report: This study came from closed home sales – not in March or even February – but January. Those same transactions began when consumers agreed to buy the home perhaps as early as the fall. These kinds of reports are a very old “snapshot” of the housing market by the time they get to the news media. This would be like someone opening up their sports section last October and instead of seeing the Giants in the World Series, found our local heroes 10 games out of first because the papers was still reporting the July standings.

So what’s a better way to take the current temperature of the market? New sales or pending sales are a much more accurate assessment of what’s happening now because they are a forward-looking indicator. These are sales that have just occurred, but haven’t gone through the 30 days or 60 days necessary to complete escrow. New pending sales offer the best barometer of what’s happening at the moment regarding buyer confidence in the housing market; the transactions that will be reported by Case-Shiller and DataQuick a month or two from now.

And what’s encouraging to me is that all across the Bay Area, pending sales in March are outpacing the same total last year – in some cases by as much as 200% over March 2010. Our Greenbrae office is a good example. The housing market in March was “on fire” in Central Marin, according to our Greenbrae manager. The office was planning for 26 new sales, but exceeded that with close to 60 sales. He said the office has not had a month like this since the boom in ’07 and even then it did not have such a high number of transactions. That story is echoed by many other offices, from Marin down through the Peninsula and across the Bay.

This is not to say that every community and every neighborhood in the Bay Area is seeing a revival in new sales. There are still slow areas that are still challenged, depending on the price point. And even within some cities, certain parts of the market are doing well while others might be soft. And the overall market will continue to be challenged by shadow inventory of distressed properties coming on the market.

But my point is that if you read the lagging indicators like the Case-Shiller report you’d think the market is dropping off the cliff. Far from it. We are definitely seeing a tremendous improvement in many parts of the Bay Area, and we’re not alone.

According to the National Association of Realtors, the pending home sales index for properties nationwide, a forward-looking indicator, rose 2.1 percent to 90.8, based on contracts signed in February, from 88.9 in January. Lawrence Yun, NAR’s chief economist, said, “Pending home sales have trended up very nicely since bottoming out last June, even with periodic monthly declines. Contract activity is now 20 percent above the low point immediately following expiration of the home buyer tax credit.”

The outlook wasn’t even across all regions, however. The PHSI in the Northeast fell 10.9 percent to 65.5 in February. In the Midwest the index rose 4.0 percent in February to 81.1. Pending home sales in the South increased 2.7 percent to an index of 100.3. While in the West the index rose 7.0 percent to 105.6 and is now 0.6 percent higher than February 2010.

“We may not see notable gains in existing-home sales in the near term, but they’re expected to rise 5 to 10 percent this year with the economic recovery, job creation and excellent affordability conditions providing confidence to buyers who’ve been on the sidelines,” Yun said.

One other thought when it comes to housing numbers: It’s important to take the lower median or average sale prices in monthly reports this time of year with a grain of salt.

In many markets throughout Northern California, REOs and short sales can make up as much as 20% to 30% of the entry level sales.  While typical homeowners might take a break from the holidays and list (or re-list) their property in January or February, banks don’t take any breaks in November and December. These listings stay on right through the holidays. So a greater percentage of available listings that sell are “distressed” properties at lower price points, bringing the median and average sales prices down for several months in the New Year.

Below is a market-by-market report from our local offices:

North Bay – Our Greenbrae office, as I mentioned above, had a record month with the local market on fire. Among those transactions are two $2.5 million range properties in Larkspur, a $4 million property in Kentfield and a $5 million property in Ross. The office is buzzing and buyers are out in full force.  Unfortunately, at the same time Marin still suffers from lack of inventory.  Contrasting the high number of opens was a low number of new listings.  We are hopeful that the lack of rain and abundance of sunshine will change some seller attitudes about getting their properties on the market.  In Southern Marin, there is continual activity, and a number of multiple offers on REOs and short sales.  In the upper end of the market, if properties are priced well, they will sell, but they must perceived as a good buy and value, our local manager adds. Meanwhile, our Northern Marin office says inventory is rising, but sales have dipped. In Petaluma, multiple offers in the under $300,000 range continue to dominate the sales activity. Open houses are well attended. And the town of Sonoma is starting to heat up in the million-plus price range. Our Santa Rosa office also reports that sales are on the rise, and the local manager says they expect more new listings for April.  Finally, our Sebastopol manager says that their local market has seemed a bit slow. But there seems to be interest in the upper end, where they sold a $2.5 million home in 15 days and have two more high-end open sales that have come in.

San Francisco – It is beginning to feel like the market has sprung into action, according to our San Francisco Lakeside office manager, who adds that their sales and listings board “is lit up like a Christmas tree.”  Meanwhile, the Lombard office says sales activity and new listings have been steady with about a third of their sales resulting in multiple offers. Our Market Street office reports that the market, especially in the upper end, appears to be gaining steam. There has been a lot of activity at open houses, with as many as 100 people through some listings. A condo in the Mission district was in contract within five days of being on the market.

SF Peninsula — In Burlingame, multiple offers are coming up in every price point as the available inventory is getting smaller. The opens are busy – even condo opens. It feels like all the “fence sitters” who waited out last year have decided to jump into the market. The only trouble is finding a property. Inventory is down in Hillsborough and the other high end markets. Across the hills, it’s still a bit slow on the coast. Our local office says they seem to have extremes – such as all cash for $1+m second homes or buyers wanting the lower end REO’s.  In Menlo Park, our local offices say that sales are on the rise. The market is showing some definite strength in the $2.5 mil plus range, but good inventory is still hard to find. Sales are definitely on the rise in Palo Alto, where inventory isn’t keeping up with buyer interest.  Properties in the $2M range are selling with multiple offers, in excess of 20% over list price. Activity in the $2-5M range is also brisk.  The activity in San Carlos in the last two weeks has been robust.  In the single-family market there were four properties that had multiple offers – including one with 12 offers!  The other nearby areas (Redwood City, Redwood Shores, Belmont) are selling but not quite as quickly and not with multiple offers. In Portola Valley, the market has been steady while in San Mateo, things are showing signs of improvement.  Listing inventory is still lighter than usual, causing more multiple offers. 

East Bay – Our Berkeley office says that suddenly there are lots of deals on the board.  Even properties where a previous deal has fallen through are being quickly resold.  Short sale deals are on the rise. In Danville, the rain last week seems to have had a “dampening” effect although sales activity has picked up strength in the last 2 weeks. The Livermore market has remained steady, with total pending sales in March up about 6%.  At the current sales pace of detached homes in Livermore, we need more quality listings to meet the demand of the buyers, as we have only 2.6 months of inventory of detached homes on the market. The upper end of the market remains strong with four closings of Preview Homes in Livermore during March, which is twice the norm in a month. Things are steady, according to the Oakland-Piedmont office, with the upper end very active. Our Orinda manager says that market is definitely heating up, and buyers are serious and realize it is the time to jump in. Inventory that has been sitting idle is starting to see interest with showings, request for reports, etc. Finally, our Walnut Creek office reports both sales and inventory are climbing again. Previews listing inventory is increasing, too, and what little inventory is coming on, it’s selling.  But some buyers continue to be very selective and wait for the “perfect” home. 

 

Silicon Valley – Our Los Altos manager reports that the market has been very busy in that city, along with Palo Alto and Mountain View. Buyers are attending open houses in large numbers, and sales above $2 million are picking up. Inventory is starting to increase in Cupertino, with about a quarter of the sales multiple offers.  In San Jose, our Almaden office reports that most areas are selling quickly provided they haven’t raised the list price over the last comp.  Traditional sales (non distressed) are fetching between 5 – 10% above distressed sales. Meanwhile, our Willow Glen manager says sales are picking up and agents are getting more counter offers as well. Open houses are quite busy. In Saratoga, the market has become very active in recent weeks. The only thing holding back more activity is the lack of adequate inventory, the local manager reports. The upper end of the market is particularly strong. The office says three properties over $3 million have sold in the last few weeks.

South County – The past 3 weeks have been very mild in regard to sales and new listings, according to our Gilroy office. Some agents believe the slowdown is due to current world events and things should begin to pick up now that spring and the start of the home buying season is here. Agents in the Morgan Hill office have experienced their own version of “March Madness.”  They have managed to almost fill the sales board with more than 50 sales in one month.   One agent herself has put 9 properties into escrow during March.  In addition, there were 32 closings this month for the Morgan Hill Office.  All of us hope that the momentum continues.

Santa Cruz – Sales activity is definitely picking up, our local manager says.  There are more sales in the over $1 million price point and a lot of cash buyers roaming around. From a year ago sales over $1 million are up 50%. We are watching the law of supply and demand affect this segment of the market, as inventory levels drop, prices edge up, and we are seeing a few more sales.  In the $500K – $1,000,000 range, the inventory is down from a year ago, prices remain about the same, and homes are selling in a relatively short at 92 days on average.  These are all good signs.  If inventory levels remain challenged, we may start to see an increase in prices. Under $500K there is a fairly significant increase in homes under contract from a year ago – about a 48% increase! There is a short supply of inventory, just under 3 months with an average market time of 90 days or less.  Those lower-end properties are getting scooped up by investors and first time buyers.

 

Monterey Peninsula – There have been more short sale properties come on the market lately, our Monterey area manager reports. Additionally, there have been more REOs in the Seaside area, though not the big influx we’ve been told we’d see by now.  The prices on so many short sale properties are looking to be so low–like such good buys–that there are an increasing number of multiple offer situations.  Working with lenders on short sales continues to be difficult. We just closed escrow on a couple of properties that we’d had offers in on months ago as short sales, but the lenders turned them down, only to have them foreclosed, put back on the market as REOs, and sold to the very same buyers for 15-20% less than offered as short sales!   

One final note on the luxury market – Silicon Valley has been buzzing about the very recent sale of a lavish 25,500-square-foot mansion in Los Altos Hills, reportedly to a Russian billionaire known for his investments in Facebook and Groupon.  The amount paid was anywhere from $75 million to $100 million or more for the property, according to various AP and WSJ news reports. That would make it one of the largest sales in U.S. history along with Donald Trump’s $100 million sale of his Palm Beach mansion in 2008. The buyer in that case was Russian fertilizer billionaire Dmitry Rybolovlev.  And another important fact I’ll share from a Coldwell Banker Previews meeting in Los Angeles this week:  Greater LA had 4 sales over $20M in 2008, and just another 4 over $20M in 2009.  In 2010, they had a 200% increase with 12 estates selling over $20M.  As I’ve said before, the “smart money” calls the bottom of a housing downturn.

That’s it for now. Have a good week!

Rick

Rick Turley

President, San Francisco Bay Area

Coldwell Banker Residential Brokerage

tel 415.437.4505

rturley@cbnorcal.com

« Newer Posts - Older Posts »

Categories