Weekly Market Watch

Coldwell Banker Weekly Market Watch
Week of March 31, 2008

A recent Forbes Magazine article ranked the Top Ten Best Cities for Home Sellers. San Jose and San Francisco were at the top of the list. The article points out that San Jose and San Francisco came out on top because they fit the profile of a sellers' market--low inventory rates that were still shrinking, good job creation, a large scale cutback in new home construction and a boost in the credit market from new Fannie and Freddie loan limits. This fits neatly with what we’ve been saying for weeks now and reinforces the fact that real estate is local, and national headlines about the real estate market simply don’t apply to every market. It also helps to explain why the majority of our open houses remain so busy.

Some areas of our market, particularly on the Peninsula, Berkeley and in San Francisco, continue to suffer from a shortage of desirable, saleable properties, so when they do come on the market, they generate a lot of interest from potential buyers. In Palo Alto, the luxury market continues to thrive and preemptive offers are not uncommon at all. In San Francisco, the markets change from neighborhood to neighborhood – Noe and Eureka Valleys are highly sought after, and the market is very active in the $1.5 million-plus range. A listing in Noe Valley had more than 100 groups attend its open. There are also more REO properties coming on the market in San Francisco which, because of their perceived value, generate much interest from potential buyers.

In other areas, greater inventory levels, REOs and short sales in the market, are bringing out potential buyers because the affordable prices are practically irresistible. Three deals from the Castro Valley office have received between three and ten multiple offers apiece. These properties, located in the San Leandro, San Lorenzo and Hayward corridor, were priced between $299,000 and $360,000 which, in that area, has become a “magic” price range for generating lots of activity and quick sales. Livermore saw its best week of new sales in two years. In Concord, one home listed at $415,000 had nine offers and other properties in the area listed between $300,000 and $600,000 had as many as 12 offers. These multiple offers happening now aren’t driving up the prices back to unsustainable levels like they did a few years ago. But they do certainly indicate that the interest is out there for those desirable, well-priced homes – and that people are getting the financing necessary to get the deals done.

Some areas still have buyers maintaining a “wait and see” attitude – they’re out looking, but still think they might be able to get an even better deal - but they’re becoming more the exception than the rule. As we start seeing more articles like the one in Forbes magazine, and we continue educating our customers about the local nature of the real estate markets we serve, we’ll see a return to normalcy in the markets hasten.

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