Weekly Market Watch

Weekly Market Watch
August 24-30, 2008

Labor Day is behind us. Kids are back in school, the last of the summer vacations concluded. Now that the traditionally slow July and August months are past, we do anticipate that sales will begin to pick up in September and October. This is typically the time of year in which serious buyers begin to take action—hoping to get into their new home before the holidays.

And now that clients, and our Agents for that matter, have returned from their vacations and are homeward bound, we should see a pretty decent pick-up in sales activity. Of course, only time will tell but if history is any indicator, we are anticipating a more robust September than we saw in July and August. From what I have heard stopping by offices this week, there is already a decent increase in quality listings coming to the market over the next several weeks.

Overall, the Bay Area housing market is running pretty steady as we head into fall. Certainly there are pockets in which sales activity is thriving thanks to REOs. And in certain markets like San Francisco, the North Bay and parts of the Peninsula, we are seeing a lot of activity in the upper end. But for the most part, generally speaking, the market is moving steady—erring on the side of status quo for a buyer’s market.

Homes are selling. But again, as I’ve said in past editions of Weekly Market Watch, only those homes that are priced right, show well, are in a good location and are seen as a “value” to buyers in this market, are moving in a timely manner. Others tend to sit.

Buyers are perusing. Yes, perusing seems the most appropriate choice of words. In talking with many of our Agents, it is apparent that we’ve successfully driven the message home that this is one of the best buyer’s markets in more than a decade to buy and the good news is that many buyers are starting to get their feet wet through increased open house activity, increased floor calls and even an increase in pendings—with Santa Clara County last week reporting that pending sales were up 121% this week, year over year. Those wet feet, however, haven’t resulted in closed sales quite yet and only time will tell if they do.

So while we wait to see what becomes of the wet feet, let’s take a look at this week in real estate:

· East Bay—Still a lot of activity based on REOs. Short sales are finally starting to get approvals which will help to decrease some of our standing inventory. Lamorinda is reporting that it is “hot, hot, hot!” In fact, the office noted that listings aren’t lasting long and most are seeing multiple offers. Of course this is one of the few Bay Area markets that hasn’t felt the effects of REOs and short sales. Our Walnut Creek office is noting that some REOs in Antioch are receiving 10+ offers, with the accepted offer 10-15% over the asking price.
· Monterey County—This largely second home market enjoyed the benefits of the three day weekend as potential buyers came to Monterey in droves, particularly in Carmel. A number of offers were written over the weekend and we are holding twice as many deposit checks than usual so things definitely seem to be picking up. We put a $3.5 million and a $4.5 million listing into escrow this week.
· North Bay—Our Southern Marin office is noting that activity is picking up with more listings coming on the market. This week, in fact, our Southern Marin office introduced five new Previews listings to the market and put one Previews listing ($2.7 million) in escrow that had been on the market for 400 days. Things are looking up! Sonoma County is still seeing a lot of lower-end, REO activity. One REO out of our Sebastopol office this week received 27 offers.
· Peninsula—Our Half Moon Bay office is reporting that even with the Labor Day weekend, things are still moving briskly. We had 18 homes open over the three day weekend on the coast and Agents reported a lot of serious and motivated buyers. Palo Alto is still feeling the effects of low—painfully low—inventory. But the good news is that they expect that even in the next few days to get some good, quality inventory brought it to spur some more buyer interest.
· San Francisco—Our Lakeside Manager said it best, “We are waiting for the market to heat up. Multiple offers are a result of proper pricing, not market conditions.” This is a good lesson for sellers that if you price your home properly and competitively, you may be able to generate some good, solid interest from buyers. Overall, coming off the Labor Day weekend, things have been pretty quiet in the City. We’re awaiting some exciting new inventory to come on the market in the next two weeks which will move us back into a more normal market for the City.
· Santa Cruz County—No information this week.
· Silicon Valley—I think we are all going to be glad when everyone is back in school and work, Silicon Valley especially. Certain areas of Silicon Valley are dealing with the challenge of a lack of quality inventory which is driving would-be buyers back on to the fence. There just aren’t enough quality listings to attract buyers to the market. The good news is that many of our Agents have spent their August preparing their clients’ listings for sale and we expect some good inventory to come on the market over the next few weeks. This should help to stimulate things for our Silicon Valley clients as right now, things are pretty quiet.
· South County—The REO market and lower priced homes continue to drive our South County market. We continue to see multiple offers on REOs and short sales.

Now that the Labor Day holiday is over, we have a lot to look forward to. The dog days of summer are behind us and now we can move forward to the more robust Fall selling season. Buyers, start your engines! Sellers, get ready to negotiate, be reasonable and prepared, and don’t forget to remain competitive.

Until next week,
Rick

Rick Turley
President, San Francisco/Peninsula/North Bay
Coldwell Banker Residential Brokerage