Bay Area Real Estate Market Update

by cindy ~ September 21st, 2009 ~ Los Altos, Menlo Park, The Peninsula in the bay area, Uncategorized, Woodside Comments (98)
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Rick Turley, President of  Bay Area Coldwell Banker, shares with us his report of what he is seeing in the entire Bay Area for activity and changes in our Real Estate Market (see below).  Of specific interest are the area reports from mid-peninsula brokers and agents with street level reports about Menlo Park, Woodside, Hillsborough, Belmont, Redwood City and San Carlos.  Further down in the report higher end sales are noted in Woodside and Los Altos.  I know that many higher end sales are now in pending status and will show up in next months sales reports…good activity that lends a feeling of optimism in our area here on the mid-peninsula of the beautiful Bay Area.

 

September 14, 2009

That was the headline in a September 2 Wall Street Journal article.  Click here to access it:  http://online.wsj.com/article/SB10001424052970204047504574386802310702622.html. 

 

This was a really interesting piece which looked at numbers from Standard & Poor’s and NAR.  Following is an excerpt from the article:

“Last week, Standard & Poor’s reported that its S&P/Case-Shiller U.S. National Home Price index of real-estate values increased this past quarter over the first quarter of 2009, the first quarter-on-quarter increase in three years. Its index of 20 major cities also rose for the three months ended June 30 over the three months ended May 31, with only hard-hit Detroit and Las Vegas experiencing declines. The week before that, the National Association of Realtors reported that sales volume of existing homes was up 7.2% in July from June.

In short, the data suggest that real-estate prices hit a bottom some time during the second quarter, and have now begun to rise. There’s no way to be certain that this marks the end of the long, painful correction that followed the real-estate bubble, but clearly prices are no longer in free-fall. That means if you’ve been sitting on the fence, it’s time to act.

Ordinarily I’d never try to time the real-estate market, but I can understand why buyers have been cautious. Few want to buy in down markets, just as stock buyers avoid bear markets. And for most people, of course, buying a house is a much bigger decision than buying a stock. But with real-estate prices nationally now down about 30% from their 2006 peak and showing signs of turning up, the prices aren’t likely to go much lower. Every real-estate market is local, and so there may be a few exceptions. Overall, though, I can’t imagine a better time to buy than now.”

Although I’ve been sharing this view for quite some time, it is nice to see the preceding quote from the Wall Street Journal, and to hear someone from the media say that it’s a great time to buy.

Now here’s a local look at our past two weeks in real estate:

•          East Bay—. Berkeley reports we are expecting a big push this week as Agents and clients return from vacations, children are back at school and the clock is ticking for loan amounts and credits to buyers.  We still need MORE LISTINGS!  Castro Valley reports the local market is on fire, hungry for more inventory.  Every listing seems to have multiples within days of hitting the market.  Several Agents report that listings are met with up to 40 offers.    Livermore reported the office was very active over the Labor Day weekend.  The majority of Agents were working with buyers and multiple offers are still dominating the market.  Oakland-Piedmont reported we have 10 new first time open houses this weekend coming up.  Lots of open houses are scheduled and Agents are feeling that a lot of nice properties are going to come on the market.   Walnut Creek reported almost every sale was over asking.  Half of the sales were all cash and most of the others had substantial down payments 30-50%.  The most common challenges are frustrated buyers waiting for short sale bank approvals, low appraisals and LOW INVENTORY in ALL price ranges.  Orinda says entry level very hot with many multiples, while upper-end may be taking a break due to last of vacations and school starting soon.  Danville observes inventory continues to decline and they are now seeing multiple offers on good homes in the median price range.

•          Monterey County—We moved along at a steady pace for the last two weeks, have had lots of activities in town and, therefore, lots of people too.  We had many offers being written and about the current usual number of new escrows; most are in the $400,000 to $600,000 range, but some higher and several over a million.

•          North Bay—Greenbrae reported buyer interest is resurfacing and more properties coming on now that summer is over. Should be a good pool of homes to choose from.  Expect strong activity through mid October.  San Rafael is still very active and condos seem to be the target for entry level buyers.  Novato is a strong Sellers market!  We are still experiencing multiple offers on homes priced 5-10% below market in the under $500,000.00 price point.

Southern Marin reported it is getting steady but is considerably down from a year ago.  In the Previews market, most communities in Southern Marin are only doing 50% of the units they did in 2007.  Petaluma reported one property in Rohnert Park came back on the market at 6 AM for $219000 (REO) and by 6 PM it had 15 offers and was in escrow. We are starting to see more multiple offers in the $500,000 and above. Inventory continues to be snatched up as soon as it comes on. Sebastopol notes multiple offers in all price ranges, and double-digit attendees at all open homes.   Santa Rosa reports signs of life in the high end in the last week of August. One Agent opened escrow on $2.2 million and is actively showing two more buyers in that price range.  All three buyers came off her listing at $1.6 million. 1st week of Sept cash is the king in the REO market. We have many more buyers than inventory.

•          Peninsula—Half Moon Bay reported activity slowed down with the Labor Day holiday although listing inventory is expected to increase afterwards – market still strong in the $500k to $800k range, anything over $1.2m is slow.  Menlo Park El Camino reports pretty good sales for over the Labor Day Weekend.  Agents are positive about the last quarter of the year.  The San Mateo office reported city figures as follows:  (Belmont, Burlingame, Foster City, Hillsborough, Redwood Shores & San Mateo) SFR 2008 vs 2009. Active listings up 8%, Pending sales up 39%, and solds up 9%.  Hillsborough has about 96% more active listings in 2009 which indicates that financing and the high end market are still having their difficulties.  Woodside reports still slow, both seasonally and market-wise. Open houses have been OK. Still lots of money around for vacations and many clients are out of town. Good expectations for the fall quarter by Agents.  Redwood City/San Carlos reports that this is a difficult market to read.  We’re still seeing the delayed effects of summer.  The general feeling is that the market will start to be “better”….Now is the time for sellers to get their properties on the market.

•          San Francisco—The Lakeside office stated they are waiting for the momentum to start building for a strong finish to the year.  The Lombard office reported a slow two weeks for traffic and deals. One 3-unit fixer brought multiple offers, but fewer than expected and no contractors. Fortunately, the $1.2m to $2m market seems to be showing some life.  The Market Street office reported not many open houses this weekend, but the ones that were open had good attendance.  The Van Ness office reported good activity for a holiday weekend.    

•          Santa Cruz County—The high end is slow above $2 million with very low volume.  $1 million to $1.6 market is decreasing in value at a higher rate than any other part of the market.

•          Silicon Valley—The Cupertino office reports the Agents are working hard, but things seem a bit quieter. It is really tough holding some of these short sale and REO transactions together.  San Jose Almaden reported that listing count was low last week due to the holiday however sales remain very brisk.  Multiple offers on properly priced properties all the way up to $950K.  Short sale approvals from banks are coming much faster in most cases.  The Willow Glen office reported multiple offers are happening again and we are getting quite a few rejected offers as well.  Saratoga reported the office has been very active. Short sales are still tough going, but it seems like lenders are getting a little more serious about approving them.

•          South County— The Gilroy office reports the local market has remained pretty much the same. There is a lack of inventory in the first time buyer price range. Most properties under $400k are receiving multiple offers with cash buyers having the advantage. With kids back in school and vacation season at an end we are hoping for a boost in listings and sales.

 

A quick look at our high end closings for the past week reveals two Woodside sales, closing approx. $5.5M and $2.3M, three in Los Altos between $2.2M and $2.6M and a Kentfield home closing at $2.3M.  Also noted are 5 more in San Francisco, Carmel, and Burlingame between $2.2M and $2.5M, as well as another 41 closings between $1M and $2M. Correct pricing is still critical to get the proper amount of showings to garner offers.  When priced correctly,  the higher end is moving much better now, and it’s been almost exactly one year since the financial crisis on Wall Street brought it to a screeching halt.

 

This week I’ll leave you all with the reminder that the $8,000 federal tax credit for first-time homebuyers is scheduled to expire on December 1.  However, in order to qualify, the transaction must be closed on or before November 30, essentially leaving first-time buyers with less than three months to complete the process.  While the urgency of trying to find and close on a home before the deadline may seem stressful, it doesn’t have to be.  Just contact your Coldwell Banker Realtor today and they can walk you through the process or visit us online at CaliforniaMoves.com. 

Until next week,

Rick

Rick Turley

President, San Francisco Bay Area

Coldwell Banker Residential Brokerage