Weekly Market Watch

Coldwell Banker Weekly Market Watch
Week of March 16, 2008

Gold prices are dropping. Oil prices are dropping. Mortgage rates are dropping! For the first time since January, the rate for a 30-year fixed mortgage hit 5.75%. Reports this week also indicated that foreclosure rates statewide dropped in February for the first time since last summer. The Feds slashed short term lending rates again, and Fannie Mae and Freddie Mac were given the green light to pour an additional $200 billion dollars into mortgage loans. That, combined with the temporary increase in conforming loan limits for Fannie, Freddie and the FHA, is all good news for fast acting buyers and smart sellers. One other bright spot – our offices are reporting that investors are starting to come back into the market and most economists agree that the return of investor purchasing is an early indicator of a market that is ready to bounce back.

The hot-and-cold-running microclimates of the past months have apparently started to temper. Of the offices reporting, an overwhelming majority of them indicate that sales activity is increasing or steady. Buyers are still cautious – ensuring that they are getting a value – but they are buying, and doing so competitively considering the number of multiple offer situations that occurred last week. A new listing in San Ramon had 16 offers and looks to close at approximately $100,000 over asking. A Rockridge home listed in the $700,000 range had 17 offers and sold for $135,000 over the asking price. The Petaluma office was involved in 12 different multiple offer situations. Pleasanton, Santa Rosa, Walnut Creek, Sebastopol, San Carlos and San Francisco all reported an increase in multiple offer situations. Much of the influx in multiple offers are on homes with entry-level price ranges and REO properties due to the bargain factor, but many others are simply well-priced and well-staged and in desirable neighborhoods – these are homes that show their value well. In fact, according to San Francisco office reports, at least half of the ratified offers are multiple in all price points.

Our more than 500 open houses continued to be incredibly well attended in virtually every market. We can assume that, as always, lookie-loo's account for a portion of the visiting numbers, but a large majority of the open house attendees are serious, qualified buyers. Open homes in attractive Berkeley neighborhoods are receiving 50 to 80 visitors. A Rockridge listing had more than 100 groups go through. San Francisco and Peninsula open homes are very well attended. It’s becoming more common to see Open House signs out on Thursday evenings again.

As the Month’s Supply of Inventory seems to be holding steady, even dropping in some communities, it may be the perfect time for the move-up Buyer to list their home. With interest rates being very favorable, and fewer multiple offers on the move-up home than we’ve seen in years, this may be the opportunity they’ve been waiting for.

Have a great week!
Rick
Rick Turley
President, San Francisco/Peninsula
Coldwell Banker Residential Brokerage