March 2011 Bay Area Home Sales The Best Since 2007

by cindy ~ April 29th, 2011 ~ Best, Real Estate in General, The Peninsula in the bay area, Uncategorized Comments (71)
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Bay Area March home sales the best since 2007

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.

Rick Turley

President, San Francisco Bay Area

Coldwell Banker