Weekly Market Watch

Weekly Market Watch
Week of May 12-18

DataQuick News, the real estate information resource that much of the industry and media look to for housing data, released its April report (http://www.dqnews.com/News/California/Bay-Area/RRBay080520.aspx) last week and in it, we saw several signs of momentum, including:

“Bay Area home sales edged up from a seven month run of record lows last month, indicating that mortgage availability is improving and that an increasing number of fence sitters have decided they like today’s lower prices.”
“A total of 6,310 new and resale houses and condos sold in the nine-county Bay Area in April. That was up 28.8% from 4,898 in March and down 15.3% from 7,447 for April 2007.”
The month-to-month jump was the strongest for any March/April in DataQuick’s statistics, which go back to 1988 and it the April figures show the first monthly sales gain in six months.

“This could be the first sign that (the market has) bottomed out,” DataQuick analyst Andrew LePage said. “One month doesn’t make a trend, but there’s some momentum.”

The biggest factor driving up sales, according to DataQuick, was a flurry of bargain hunting in parts of the Bay Area most affected by foreclosures. The only two counties that saw year-over-year increases in resale home sales were Contra Costa and Solano Counties, the two also hardest hit by REOs. Last month, foreclosure properties represented 44.7% and 54.2% of all sales in those areas, respectively.

Over the last few weeks we’ve seen a real up-tick in buyer interest and homes going under contract. It seems in most markets, housing prices in the Bay Area have adjusted to a point where they are fair and it seems buyers are responding. As a result, people who couldn’t afford a home a few years ago are coming back into the market. Here is what we saw in each of the individual, local markets:

East Bay – The East Bay is a market filled with its own mini microclimates. As we saw with DataQuick’s stats, portions of Contra Costa County have endured a large number of REOs marking more than 40% of all sales in the region. Though not considered an REO market, neighboring Lamorinda is reporting it is “HOT.” Orinda Manager Val Cook-Watkins reports. “Lots of new listings, lots of closed sales and a ton pending.” Alameda County, which hasn’t been hit quite as hard by the REO influx, continues to make good strides. The Berkeley office reports that the $550,000 to $750,000 range is getting “lots of action, visits and offers.” The Castro Valley office reports that its Agents are “urging buyers to get out there and move now because things are happening so fast.” In fact, some houses in Castro Valley are seeing multiple offers within a week of listing. In some cases, lower priced REOs are seeing multiple offers that sell over asking. The Livermore office reports that open houses and showings were active and that pending sales in Livermore, Pleasanton and Dublin are rising weekly in small increments.
North Bay – The more affordable regions of the North Bay, including much of Sonoma County, seem to be on fire. In fact, the Santa Rosa office reported 18 multiple offers last week. Manager Rick Laws notes, “We are continuing on a multiple offer mode. Great turnout for the Open House Weekend. One listing had 50+ people through.” Neighboring Sebastopol reports that it is seeing multiple offers in the low and high end but it is slower in the middle range ($500,000 to $999,000). One REO property had 27 offers.
Peninsula – The Peninsula market continues to see an influx of buyers who are in “wait and see” mode. Though sales have slowed in many areas throughout this market, we are seeing a great deal of buyer interest at open houses which leads me to believe that many savvy buyers are just looking for the perfect combination of value and move-in ready condition. The Half Moon Bay office reports “This was an incredible weekend for open houses with more properties than ever for buyers to view. There are serious buyers out there and several offers were made but negotiations continue to be challenging.” The Woodside office concurs noting, “Open houses are good. Buyers are just waiting for the right price.” The Menlo Park El Camino office reports that one listing had 10 offers.
San Francisco – The City, which was one of only two markets in the Bay Area that saw an increase in sales volume (6.5% to be exact) from April 2007 to April 2008, continues to flourish. The Lakeside office, which enjoyed six multiple offers last week, notes that multiple offers continue to occur on “nicely presented homes.” The Lombard office noted that “most deals this week had one or two offers.” We are seeing steady inventory in all prices throughout the City and strong open house traffic which continues to be a good symbol of pent-up demand for quality listings that show well and are priced competitively.

For most markets within the Bay Area, if the house is priced right, it will sell. Even with the increased momentum and interest from buyers, sellers must continue to price their homes competitively to get their homes sold in this market. Regardless of interest, buyers are looking for value in today’s market and sellers need to position themselves accordingly.