This week Realogy (Coldwell Banker Residential Brokerage’s parent company) President Richard Smith met with legislators regarding the need for policy initiatives concerning the real estate industry and the economy as a whole. Specifically, the Business Roundtable (an association of chief executive officers of leading U.S. corporations)— of which Richard is the chair—issued a set of recommendations for the White House and Congress that are aimed at jump starting the housing market in order to stimulate a broader economic recovery.
The Business Roundtable’s recommendations are as follows:
· Keep mortgage interest rates at historically low levels (below 5 percent) for at least one year;
· Expand the current First-Time Homebuyer Tax Credit incentive from the lesser of 10 percent of the purchase price of the home or $8,000 to a higher limit of either 10 percent or $15,000 for all homebuyers, remove the income restrictions and include all primary residence purchases for one full year;
· Conduct a thorough review of current foreclosure mitigation and loan-modification programs in light of rising loan-modification re-default rates;
· Make permanent the current temporary conforming loan limits; and
· Continue to review and strengthen government efforts already underway to review and refine mortgage lending practices.
We believe targeted, demand-side solutions—such as the ones Business Roundtable is recommending—will provide a critical next step for a housing recovery that will help create jobs and boost the economy as a whole. To obtain a copy of the Business Roundtable press release and its Housing Working Group’s detailed recommendations, click here. To read an article that appeared in today’s online edition of The Wall Street Journal containing an interview about the Business Roundtable’s recommendations and why they are crucial to jumpstarting the housing market, click here. We will communicate with you as any legislative opportunities occur for you to contact members of Congress and voice your support—but for now, just know that we appreciate your support and are proud to be part of this initiative.
In other news this week, RealtyTrac released its foreclosure findings with positive news that foreclosure filings dipped 6% in May compared with April. But the news wasn’t all positive as the number is still 18% above this time last year. In California, the picture continues to be a bit more bleak. We are ranked No. 2 out of 50 states in foreclosure filings with 92,249 total filings or one in every 144 households. While the last two months showed a decline with a 4.5% drop from April 2009 to May 2009, the year-over-year number is still a 22.8% increase. For a complete look at the USA Today story that ran on the figures, click here: http://www.usatoday.com/money/economy/housing/2009-06-10-may-home-foreclosures_N.htm#chart.
While none of us are happy to hear about more homes in the foreclosure process, our local markets are telling us that there is sufficient demand for bank-owned properties – most are still receiving multiple offers when they hit the market.
Now let’s take a look at this week in real estate:
East Bay—The Berkeley office reports 40% of our sales this past week had multiple offers. One REO received 22 offers, all cash. Our higher end is also busy. In the $800,000 to $1 million range, we have seven active Berkeley listings and only one month supply; the $1-1.5 million price range has 18 active listings and a 3.6 mo. supply and the $1.5-2million range has 9 properties and a 9 month supply. Castro Valley reports the market continues to deliver multiples and bid wars in the low range markets. Inventory is much needed and there is no shortage of backup offers if a deal falls out. Fremont reports resale activity is picking up. REOs and short sales are still experiencing multiple offers due to low market prices and reduced inventory. Livermore reports two of the three open houses this past weekend were very active with over 25 groups visiting each open house. Inventory of active homes and total pending sales of existing homes in the Tri-Valley area remained stable this past week. Multiple offers continue on homes listed below $500,000! Two REO listings in the office had more than 20 offers on each property. Walnut Creek reports we are experiencing an increase number of sales falling through for various reasons and also at various stages of escrow. The most common reason being "low appraisals". Seven our our REO properties were recently sold to buyers paying "All Cash.” Even though these listings located got multiple offers, often at higher than the "asking price,” the Seller’s "banks" held out for the "All Cash" offer. These properties were located in Pleasant Hill, Concord, Antioch and Vallejo.
Monterey County—No information reported.
North Bay—Our Greenbrae office reported San Rafael and Novato market are hot, hot, hot! San Anselmo, Corte Madera and Greenbrae are also doing well with 30% + in contract. Novato at 46% in contract. Just had multiples on a $1.2mil house in Greenbrae. Appraisals are slowing down a bit plus price adjusting downwards accordingly or the deals fall through. Our San Rafael office is reporting homes priced at market value in Novato and San Rafael are moving quickly. One home listed at $720k in Novato had an accepted offer in less than ten days. Many homes between $300-500k are seeing multiple offers which is driving the prices up. The Santa Rosa office reports there are more real buyers out there than new sellers right now. Inventory is getting tighter below $500,000 and in selected geographical areas above the $500,000.
Peninsula—The Burlingame office reports it seems that there are protracted negotiations on every deal and buyers asking for further seller concessions after they are in contract. We have started to see a few appraisal problems which mostly seem to be the result of out of area appraisers. That being said there is more activity and sales and listings are increasing. Half Moon Bay reports the coast slowed down considerably this past week-either buyers are attending school graduations or watching the interest rats in hopes of them coming down. The Menlo Park El Camino office reports that things are feeling busier. Higher price ranges selling and some real competitiveness among buyers. Loans are still very evasive for many buyers—well-qualified or not. The Palo Alto Downtown office reports the market has been slow again these last 10 days. Although, the Midtown office seems to be busier with the entry level market. The entry level in Mountain View, Santa Clara and Cupertino seems to be relatively strong compared to the months past. The Palo Alto market has slowed down as far as number of sales and the high-end is again quiet. The San Mateo office reports the lower end of the market is hot, with multiple offers. Middle market to $800,000 is also very active. $1mil and up beginning to show life. Loans are still a problem.
San Francisco—The Lombard office reports a slow week, but this week's ratified deals were almost a reflection of the YTD. Three REO sales with multiple offers (up to 10), all over asking. A $1.5m home with multiple counters but with immediate loan problems. And a $2.6m investment deal whose terms were all dictated. The Market Street office reported Agents are writing offers but find they are running in to more competition than in the past few weeks. We are all at the edge of our seats with respect to financing until the deal is closed. Many last minute conditions coming up, not unmanageable but frustrating for our clients. Open house activity is still steady across the city and many unattached clients are looking to make the right connection with an Agent. Our Noriega office reported demand of affordable SFH is high, inventory is low. Buyer’s Agents are writing offers left and right, but most are competing in multiple offer situations. Activity is high; a lot of deals are falling apart over financing. The Van Ness office reports activity is excellent with 18 deals closed this week alone.
Santa Cruz County—Inventory levels continue to lag - south county Watsonville REO inventory is nearly gone, very few homes left and those new properties are receiving multiple offers. Short sales continue to be a big part of our market and our Agents are doing their best keeping these moving forward - and we have been relatively successful thanks to the short sale packages which they are using. Open house activity for the most part has been active.
Silicon Valley—Our Cupertino De Anza office reports we had 11 offers on a small SFR in Blossom Valley. It got bid nicely up. A Sunnyvale home with three offers went pending $20,000 under the list price. Agents are starting to see more attractive terms on some of their offers, even if the prices are not going sky high. Our Cupertino De Anza office reports multiple offers continue to dominate the lower to mid ranged priced homes in our area. We continue to see more buyers come off the fences for the $1.2m to $1.5m range and actively pursuing the homes with quality offers at or just above the asking price. The Los Altos office reports the market is active in most price ranges except for the higher end. We did have one $5M sale that was not on the MLS and is scheduled to close by the end of the month. The San Jose Willow Glen office reports buyers are out there but they may be waiting for prices to drop because it is a buyer’s market. Things have slowed up a bit and probably due to graduations. The Saratoga office reports the office has been buzzing with sales especially over the last two weeks. We finished the month with a fantastic 107 buyer sides. Our over $2 mil market is still very slow.
South County—Gilroy reports the lack of inventory continues to hinder our market. Agents and buyers are frustrated in submitting offers on properties where there are multiple offers in the double digits. Banks need to release more properties in order to keep up with the current demand. The Morgan Hill office reports the dynamics of the market are interesting, but frustrating for buyers and for Agents alike. It seems that only a short time ago, buyers were not buying and yet it was a true buyer’s market. During these past several months, however, buyers are making offers on anything that is priced right and shows well. Multiple offers are the norm. One Agent in the Morgan Hill office made 23 offers for one young couple but were beat out 22 times by higher bids. They have just gone into contract this week on their starter home. Inventory is way down, demand is way up; there just aren't enough moderately priced homes to bring the market into balance.
For a quick look at the Bay Area market for properties over $1,000,000 –here’s what I am seeing:
Monterey and Santa Cruz counties took a month over month decrease in number of sales and a slight decrease in median price. East Bay counties remain fairly flat in number of sales, and in price. San Mateo and Santa Clara counties took a big jump in May; number of sales up 32% over April, and median price highest since April of 2008. Similarly, in San Francisco, median price jumped 27% over prior month to $1,750,000 and highest number of sales since last September. Marin and Sonoma counties had their third monthly increase in number of million+ dollar sales, and a slight increase in median price. The prevailing commentary you’ll hear in any areas that are experiencing increased high-end activity is very careful selection of listing price and great attention to detail for showing condition of the property.
We’ll take a break next week for the Weekly Market Watch, and I’ll be bringing you two weeks of news for the following week.
Until then,
Rick
Rick Turley
Coldwell Banker Residential Brokerage San Francisco Bay Area
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
Monday, June 15, 2009
Thursday, June 11, 2009
Weekly Market Watch
Showing Activity In the Entry Level and Mid-Level Markets Continues to Rise
Now that school is almost out, we’re finding many families are starting to look at homes in anticipation of getting settled prior to next school year. Showing activity in many markets has increased considerably.
Sellers are getting their homes on the market and, in general, seem to be quite receptive to staging and pricing strategies. The homes in the entry-level market are moving well if they are in good condition, and if fairly and competitively priced. We are seeing multiple offer situations in most of our first time home buyer markets. The price point for this activity is of course different by county, and by specific MLS zones, but this week as I visited several Santa Clara County and Marin County offices – I was told about numerous multiple offer situations garnering 10 to 20 offers in the $400,000 to $500,000 range. One property listed at $399,000 (in a mid-$400’s neighborhood, I believe) received over 50 offers.
Though we have seen sporadic new activity in the upper end market, it is still relatively slow for properties over $2M. The month’s supply of inventory for high end properties is more than triple that of homes listed under $800,000. Having said that, we also need to make note of the current momentum we’re starting to see in our offices in the high end. Just looking at one particular day this week, among many other sales, we closed escrow on homes ranging from $1.7M to $2.7M in Palo Alto, Carmel, and Mill Valley, and a home in Los Altos Hills just shy of $3M.
This week LORE Magazine and the Wall Street Journal released their 2008 Top 400 Realtor list. You may view it online at http://online.wsj.com/ad/top400-articlecontinued.html. I'm very proud that we have an impressive number of SF Bay Area Coldwell Banker sales associates who were recognized within this coveted ranking, and for that—along with all of their hard work and dedication, we salute them.
The most notable news this week was The Mortgage Bankers Association’s (MBA) release of is Weekly Mortgage Applications Survey for the week ending May 29, 2009. The Market Composite Index, a measure of mortgage loan application volume, was 658.7, a decrease of 16.2 percent on a seasonally adjusted basis from 786.0 one week earlier but was 14.4% higher than the same week a year ago. This increase is due, largely in part to the first time home buyer market which, as we know, has been vastly stimulated by low interest rates, the $8,000 first time home buyer tax credit and increased affordability. Together these incentives are finally getting buyers in the first time home buyer market off the fence and into the market which is why we are starting to see some price stabilization at this level.
While entry level prices currently seem to be on an upward trajectory, it will take some time to return to the median price levels of our pre-recession market. A recent study notes that US real estate is now as affordable as it has been in the past 38 years (this of course relates to median homes when compared to median mortgage rates and incomes). The fact is, the peak of unaffordability was in 2006, when an average family in the United States needed to spend 44% of their monthly income toward the purchase of an average single family home.
A couple of other interesting articles of note this week:
- RISMedia’s First Time Home Buyers Grabbing Houses and Tax Credit (http://rismedia.com/2009-06-03/first-time-home-buyers-grabbing-houses-and-tax-credit/)
- Realty Times Multifamily Builder Confidence Up From Record Lows; Interest From Prospective Renters and Buyers Rises (http://realtytimes.com/rtpages/20090603_confidenceup.htm)
- Realtor.org Pending Home Sales Up For Three Months in a Row (http://www.realtor.org/press_room/news_releases/2009/06/phs_up)
Now, let’s take a look at this week in real estate:
East Bay—Berkeley reports we were inundated with multiple offers this week and large turnouts at open houses. 75% of our deals this week saw multiple offers, any number from 2-8 on seller owned and 12-18 on bank owned. Cash is still king on many deals because of increasing anxiety about appraisals. Castro Valley reports we are still facing an inventory shortage here in our micromarket. We are seeing cash offers everywhere and one Agent reports that she has been outbid from the last five offers she has written by all cash deals. The number of multiples in the low range markets has been in the range of 10-60 offers, to give you an idea as to the inventory shortage we are facing here in our micromarket. Agents are waiting for banks to release more REOs. One thing is certain, we are definitely a recovering market. The Danville office reported the activity level is good but we need more inventory. Lots of buyers are jumping off the fence. The Fremont office is reporting the market is becoming competitive in the Tri-City area. The listing inventory is reducing. The Livermore office reports our pending sales are up in the office and the overall market in the Tri-Valley area remains strong. Multiple offers are still the rage below $500,000. The Pleasanton office reports homes under $450K are moving very fast with multiple offers.
Monterey County—Market continues to have lots of activity in the lower price ranges and slower as price range goes up, as only 25 properties in Carmel and Pebble Beach have sold for over $2 million in the first five months of this year, with highest at almost $8 million. As is typical for end of the month, we had a good week for closings, even though Monday was a holiday, with 14 closed sales ranging in price from an incredibly low $128,000 in Seaside to a lot in Tehama at $1,325,000.
North Bay—The Petaluma office reports that the frenzy continues as buyers compete for entry level homes that are in the $200-$400k (2 years ago were $500-$600k) across the board these homes have multiple offers and are typically going into escrow over the asking price. One home on the west side of Petaluma had 32 offers and went $80,000 plus over asking. With inventory shrinking and more buyers entering the market we are seeing an upswing in median price in this segment of the market (under $500,000). Is this the bottom in that price range? Looking for more inventory REO or otherwise. The $500-700k market is starting to pick up. Inventory in the million dollar plus market is accumulating fast. Not as many buyers in that market. But there are some circling. Our San Rafael office reports there has been an increase in multiple offers over the past week in the price point of $300-500k in San Rafael and Novato. We ratified an offer on a home listed in Novato for $2.1mil. Our Southern Marin office reports quite a week in So. Marin, from a $2,725,000 Mill Valley closing where we represented both ends, to six offers on a $679k Corte Madera listing in our office. For the first 5 months of the year, Mill Valley is 24% down in sold units vs. same period a year ago and 18% down in average sales price, Sausalito is 43% down in units vs same period a year ago, and 15% down in average sales price and Tiburon is 57% down in sold units and 2.4% down in average sales price.
Peninsula—The Agents feel that we may be seeing the bottom in the North County and in the lower price points. The inventory has been greatly reduced in these areas and multiple offers have become the norm. The $1mil to $2.5 range is still slower and many buyers are concerned with availability of mortgage money. We still are seeing cash buyers however and others with large down payments. Our Menlo Park El Camino office reports we are still getting multiples on low end and well priced properties. Some Agents feel that buyers are beginning to realize what great rates are out there and afraid they are going to go away. They want sales contingent on COE not just a sale of their properties. Sellers will take LOWER offers if they feel it has a higher chance of closing. Very cautious clients, very risk-averse. Our Menlo Park Santa Cruz Avenue office reports one sale in Menlo Park (list price $799k) which sold with four offers and went substantially over list. Good feedback from Agents who held open houses. Buyers are out in full force. Palo Alto reports the following year to year comparison: The first three months of this year were slower, as far as closed sales compared with the first three months of last year. Months four and five of last year were actually slower than months four and five this year. Yet, we are one closed escrow short of last year per the MLS here in Palo Alto. Hopefully optimistic a trend going up.
San Francisco—The Lombard office reports the lower the price the more offers. As price goes up flawed properties and not price presented well are sitting. A couple of investment property closings this week, and completing the financing was extremely difficult. The Market Street office reports multiple offers were the order of the day with mostly two offers, but one received three and one received four. Negotiations in most cases are still lengthy. Great traffic at open houses over the weekend and Agents are seeing more private showings. Buyers are coming back three and four times before writing the offer.
Santa Cruz County—Agents are busy writing offers and June is starting out to be a stronger month than we have had the past few months. Inventory levels remain low; we are seeing multiple offers on homes that are not bank owned. Short sales continue to be a big part of the market and the timeframes remain slow and cumbersome for moving through the process in most cases. We know the pent up buyer demand is there and as rates start to creep up - it may bring more of them to the table ready to write.
Silicon Valley—Our Cupertino DeAnza office reported Agents are frustrated dealing with REO/Short Sale listing Agents who don't return calls or emails. On a positive note, we had a number of sales over $1M and one over $2M. Our Los Altos office reported buyers are making offers on the lower end homes. The higher end price tiers are slower in both the condo and single family homes. The San Jose Almaden office reported inventory is still shrinking and bringing more pressure to bear on our low end market in every area. I hear of multiple offers in all parts of our county. From Los Altos to Gilroy, it is not just limited to REO bargains anymore. The only criteria are that it has to be priced for this year’s market—not previous years. One traditional sale in Sunnyvale sold for 2% above list in as many days with back up offers in place, high $800,000 price range. Of those who report to me on open homes, I hear they’re busy. Time is running out for the first time buyers who are waiting for whatever… prices to drop, interest rates to fall further or more government concessions. Bottom was two months ago and we need to get that word out! Our San Jose Main office reports activity continues to be brisk in the lower price range of $250K to $550K with multiple offers on many properties. Activity in the upper price range is slow. Open houses in all price ranges were very active this past weekend. Increase in interest rates the past week may slow our current busy market.
South County—The real estate business cycle here in the South County has remained unchanged for the last several months. Entry level (investment properties) priced between $300,000 and $400,000 are selling with multiple offers. Upper end homes are still languishing on the market. Inventory is decreasing and demand remains high. This may result in prices (and values) moving upward.
It seems we’ve enjoyed another week in SF Bay Area real estate much like the past several weeks; stabilizing if not increasing prices in the entry level, and a nice up-tick in the mid and higher price points. The delayed Spring selling season continues – at least for another week.
All the Best,
Rick
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
tel 415.437.4505
Now that school is almost out, we’re finding many families are starting to look at homes in anticipation of getting settled prior to next school year. Showing activity in many markets has increased considerably.
Sellers are getting their homes on the market and, in general, seem to be quite receptive to staging and pricing strategies. The homes in the entry-level market are moving well if they are in good condition, and if fairly and competitively priced. We are seeing multiple offer situations in most of our first time home buyer markets. The price point for this activity is of course different by county, and by specific MLS zones, but this week as I visited several Santa Clara County and Marin County offices – I was told about numerous multiple offer situations garnering 10 to 20 offers in the $400,000 to $500,000 range. One property listed at $399,000 (in a mid-$400’s neighborhood, I believe) received over 50 offers.
Though we have seen sporadic new activity in the upper end market, it is still relatively slow for properties over $2M. The month’s supply of inventory for high end properties is more than triple that of homes listed under $800,000. Having said that, we also need to make note of the current momentum we’re starting to see in our offices in the high end. Just looking at one particular day this week, among many other sales, we closed escrow on homes ranging from $1.7M to $2.7M in Palo Alto, Carmel, and Mill Valley, and a home in Los Altos Hills just shy of $3M.
This week LORE Magazine and the Wall Street Journal released their 2008 Top 400 Realtor list. You may view it online at http://online.wsj.com/ad/top400-articlecontinued.html. I'm very proud that we have an impressive number of SF Bay Area Coldwell Banker sales associates who were recognized within this coveted ranking, and for that—along with all of their hard work and dedication, we salute them.
The most notable news this week was The Mortgage Bankers Association’s (MBA) release of is Weekly Mortgage Applications Survey for the week ending May 29, 2009. The Market Composite Index, a measure of mortgage loan application volume, was 658.7, a decrease of 16.2 percent on a seasonally adjusted basis from 786.0 one week earlier but was 14.4% higher than the same week a year ago. This increase is due, largely in part to the first time home buyer market which, as we know, has been vastly stimulated by low interest rates, the $8,000 first time home buyer tax credit and increased affordability. Together these incentives are finally getting buyers in the first time home buyer market off the fence and into the market which is why we are starting to see some price stabilization at this level.
While entry level prices currently seem to be on an upward trajectory, it will take some time to return to the median price levels of our pre-recession market. A recent study notes that US real estate is now as affordable as it has been in the past 38 years (this of course relates to median homes when compared to median mortgage rates and incomes). The fact is, the peak of unaffordability was in 2006, when an average family in the United States needed to spend 44% of their monthly income toward the purchase of an average single family home.
A couple of other interesting articles of note this week:
- RISMedia’s First Time Home Buyers Grabbing Houses and Tax Credit (http://rismedia.com/2009-06-03/first-time-home-buyers-grabbing-houses-and-tax-credit/)
- Realty Times Multifamily Builder Confidence Up From Record Lows; Interest From Prospective Renters and Buyers Rises (http://realtytimes.com/rtpages/20090603_confidenceup.htm)
- Realtor.org Pending Home Sales Up For Three Months in a Row (http://www.realtor.org/press_room/news_releases/2009/06/phs_up)
Now, let’s take a look at this week in real estate:
East Bay—Berkeley reports we were inundated with multiple offers this week and large turnouts at open houses. 75% of our deals this week saw multiple offers, any number from 2-8 on seller owned and 12-18 on bank owned. Cash is still king on many deals because of increasing anxiety about appraisals. Castro Valley reports we are still facing an inventory shortage here in our micromarket. We are seeing cash offers everywhere and one Agent reports that she has been outbid from the last five offers she has written by all cash deals. The number of multiples in the low range markets has been in the range of 10-60 offers, to give you an idea as to the inventory shortage we are facing here in our micromarket. Agents are waiting for banks to release more REOs. One thing is certain, we are definitely a recovering market. The Danville office reported the activity level is good but we need more inventory. Lots of buyers are jumping off the fence. The Fremont office is reporting the market is becoming competitive in the Tri-City area. The listing inventory is reducing. The Livermore office reports our pending sales are up in the office and the overall market in the Tri-Valley area remains strong. Multiple offers are still the rage below $500,000. The Pleasanton office reports homes under $450K are moving very fast with multiple offers.
Monterey County—Market continues to have lots of activity in the lower price ranges and slower as price range goes up, as only 25 properties in Carmel and Pebble Beach have sold for over $2 million in the first five months of this year, with highest at almost $8 million. As is typical for end of the month, we had a good week for closings, even though Monday was a holiday, with 14 closed sales ranging in price from an incredibly low $128,000 in Seaside to a lot in Tehama at $1,325,000.
North Bay—The Petaluma office reports that the frenzy continues as buyers compete for entry level homes that are in the $200-$400k (2 years ago were $500-$600k) across the board these homes have multiple offers and are typically going into escrow over the asking price. One home on the west side of Petaluma had 32 offers and went $80,000 plus over asking. With inventory shrinking and more buyers entering the market we are seeing an upswing in median price in this segment of the market (under $500,000). Is this the bottom in that price range? Looking for more inventory REO or otherwise. The $500-700k market is starting to pick up. Inventory in the million dollar plus market is accumulating fast. Not as many buyers in that market. But there are some circling. Our San Rafael office reports there has been an increase in multiple offers over the past week in the price point of $300-500k in San Rafael and Novato. We ratified an offer on a home listed in Novato for $2.1mil. Our Southern Marin office reports quite a week in So. Marin, from a $2,725,000 Mill Valley closing where we represented both ends, to six offers on a $679k Corte Madera listing in our office. For the first 5 months of the year, Mill Valley is 24% down in sold units vs. same period a year ago and 18% down in average sales price, Sausalito is 43% down in units vs same period a year ago, and 15% down in average sales price and Tiburon is 57% down in sold units and 2.4% down in average sales price.
Peninsula—The Agents feel that we may be seeing the bottom in the North County and in the lower price points. The inventory has been greatly reduced in these areas and multiple offers have become the norm. The $1mil to $2.5 range is still slower and many buyers are concerned with availability of mortgage money. We still are seeing cash buyers however and others with large down payments. Our Menlo Park El Camino office reports we are still getting multiples on low end and well priced properties. Some Agents feel that buyers are beginning to realize what great rates are out there and afraid they are going to go away. They want sales contingent on COE not just a sale of their properties. Sellers will take LOWER offers if they feel it has a higher chance of closing. Very cautious clients, very risk-averse. Our Menlo Park Santa Cruz Avenue office reports one sale in Menlo Park (list price $799k) which sold with four offers and went substantially over list. Good feedback from Agents who held open houses. Buyers are out in full force. Palo Alto reports the following year to year comparison: The first three months of this year were slower, as far as closed sales compared with the first three months of last year. Months four and five of last year were actually slower than months four and five this year. Yet, we are one closed escrow short of last year per the MLS here in Palo Alto. Hopefully optimistic a trend going up.
San Francisco—The Lombard office reports the lower the price the more offers. As price goes up flawed properties and not price presented well are sitting. A couple of investment property closings this week, and completing the financing was extremely difficult. The Market Street office reports multiple offers were the order of the day with mostly two offers, but one received three and one received four. Negotiations in most cases are still lengthy. Great traffic at open houses over the weekend and Agents are seeing more private showings. Buyers are coming back three and four times before writing the offer.
Santa Cruz County—Agents are busy writing offers and June is starting out to be a stronger month than we have had the past few months. Inventory levels remain low; we are seeing multiple offers on homes that are not bank owned. Short sales continue to be a big part of the market and the timeframes remain slow and cumbersome for moving through the process in most cases. We know the pent up buyer demand is there and as rates start to creep up - it may bring more of them to the table ready to write.
Silicon Valley—Our Cupertino DeAnza office reported Agents are frustrated dealing with REO/Short Sale listing Agents who don't return calls or emails. On a positive note, we had a number of sales over $1M and one over $2M. Our Los Altos office reported buyers are making offers on the lower end homes. The higher end price tiers are slower in both the condo and single family homes. The San Jose Almaden office reported inventory is still shrinking and bringing more pressure to bear on our low end market in every area. I hear of multiple offers in all parts of our county. From Los Altos to Gilroy, it is not just limited to REO bargains anymore. The only criteria are that it has to be priced for this year’s market—not previous years. One traditional sale in Sunnyvale sold for 2% above list in as many days with back up offers in place, high $800,000 price range. Of those who report to me on open homes, I hear they’re busy. Time is running out for the first time buyers who are waiting for whatever… prices to drop, interest rates to fall further or more government concessions. Bottom was two months ago and we need to get that word out! Our San Jose Main office reports activity continues to be brisk in the lower price range of $250K to $550K with multiple offers on many properties. Activity in the upper price range is slow. Open houses in all price ranges were very active this past weekend. Increase in interest rates the past week may slow our current busy market.
South County—The real estate business cycle here in the South County has remained unchanged for the last several months. Entry level (investment properties) priced between $300,000 and $400,000 are selling with multiple offers. Upper end homes are still languishing on the market. Inventory is decreasing and demand remains high. This may result in prices (and values) moving upward.
It seems we’ve enjoyed another week in SF Bay Area real estate much like the past several weeks; stabilizing if not increasing prices in the entry level, and a nice up-tick in the mid and higher price points. The delayed Spring selling season continues – at least for another week.
All the Best,
Rick
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
tel 415.437.4505
Weekly Market Watch
Memorial Day is Over…but will it be a typical Summer Real Estate Season?
Memorial Day is behind us and the traditionally moderate summer selling season has begun. Some of our offices are saying that it’s feeling more like a late Spring season right now. Activity is fairly brisk – it goes without saying that the entry level is hot – short on listing inventory and high on Buyer demand, but there is also good activity to report in the mid-to- high end in most communities.
This week NAR announced that existing home sales rose in April with strong buyer activity, as expected, in the lower price ranges. Nationally, existing home sales increased 2.9% to a seasonally adjusted annual rate of 4.68 million units in April from a downwardly revised pace of 4.55 million units in March, but were 3.5 percent below that 4.85 million-unit level in April 2008.
While most of the sales are taking place in lower price ranges, we are seeing increased activity in the mid-priced markets. This is a domino effect; a turnaround begins with the lower price range homes and once that sector of the market is stabilized, we begin to see changes in the mid and upper price ranges. The upper end, while most recently seeing increased activity, still is considered a Buyer’s market. This seems to be fairly consistent in major Metros on both coasts.
Across most of our local MLS’s, there is approximately an average of 14+ month’s supply of homes over $2 million. This is about twice the inventory for the same period last year. Just the opposite has occurred in the <$800k market. Estimating the average month’s supply of homes across several MLS’s in this price range, we are seeing about 3 months or less – which is half of what we had this time last year – and is considered to be a Seller’s market. If you look at the same months where inventory has shrunk in the entry level – you’ll see stabilizing prices, and in some areas, increasing home values. And of course the higher end has seen declining median price as inventory has been building. This appears to be the perfect opportunity for the move up Buyer – they have a fairly captive audience for selling, and are coming from a better position to negotiate on the buying side.
It’s also important to note that investors reacted to concerns about the mounting size of our national debt this week. The yield on the 10 year T-bill increased mid-week as stocks took a hit, and interest rates for mortgages were affected by a ½ to full one percent increase. Since purchasing power decreases with a rise in interest rates, some Buyers will have an increased sense of urgency to get a signed contract on their new home.
You’ll find links to some interesting real estate stories from this week below:
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/05/28/financial/f070602D30.DTL&hw=real+estate&sn=002&sc=842
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/05/28/financial/f110028D09.DTL&hw=real+estate&sn=003&sc=766
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/28/BUJT17S3B2.DTL&hw=real+estate&sn=008&sc=607
http://sanjose.bizjournals.com/sanjose/stories/2009/05/25/daily47.html
Now, here’s a look at our week in real estate:
East Bay—Berkeley reports five of our last seven deals had multiple offers, from two or three on each to up to 12 on a wide range of asking prices. Among the lower end and REO market, the highest cash offer gets the property. One Richmond REO listing of ours received six cash offers. Castro Valley reports many Agents are saying we are back to the 2003 market. Multiple offers, frenzy of activity, houses going pending within a few days of listing. Some agents feel as though we are on the incline at this point, that we have turned the corner and the "bottom of the market is now behind us.” Danville reports Agents are getting frustrated. They are running into lots of multiple offers and having trouble getting buyers into contract. This is going on in price ranges up to about $600,000. One property in San Ramon priced at $613,000 got 30 offers this past week. Meanwhile the high end continues to slumber. Livermore reports the Tri Valley Market continues to improve each week as active listings in all three cities, Livermore, Pleasanton and Dublin declined and total pending sales in all three cities increased this past week. Orinda reports strong sales market this week with buyers ready to make offers.
Monterey County—Activity in lower price ranges continues on at a very active pace, but not the higher luxury-home price range, where we the inventory is mounting up. The last three weeks have been slow in closings for us; however, we've opened 52 new escrows in that time, which is a very positive sign for us.
North Bay—Greenbrae reports more deals going into contract, but also a bit of an increase in deals falling through. Negotiations are critical to keeping deals together. San Rafael reports a home listed in the low $700s in San Rafael went into escrow after less than a week on the market with a back up offer in place! Open houses are busy with plenty of buyers at all price points. The Petaluma office was involved in 19 multiple offer situations. Although our inventory is shrinking and multiple offers continue. The multiple offers are two and three in numbers and only one in double digits. Agents are working with multiple buyers. Interesting enough, six of the multiple offers were on properties with days on the market of 50,75,90,130,400+. Properties in the $500,000 range and up are starting to see activity. Sebastopol reports few lookers at higher priced inventory. As the lower priced homes sell with the dearth of low priced inventory we have seen a real slowdown.
Peninsula—Half Moon Bay reports a slower week with the long weekend. Listings inventory is picking up. 168 active SFR listings on the coast with only 24 pending sales; we need some serious price adjustments. Menlo Park Santa Cruz reports many Agents took advantage of the Memorial Day holiday and took time off. We were feeling some energy in the market w/some sales activity last week. Hopefully the holiday didn’t dampen the momentum. Palo Alto reports if priced well in the Palo Alto marketplace, from downtown to S. Palo Alto, we are experiencing an unusual amount of multiple offers. Almost every property priced well will have multiple offers and prices that exceed the list price from $800k to $3M. Open houses are double and triple what they have normally been-even over the holiday weekend. A lot of optimism in the Palo Alto marketplace. The volume is still low but the activity intense. San Mateo reports inventory six months ago in Daly City was over 300, today its is about 60. San Bruno & So. SF are experiencing the same. We might be building a solid base as many properties are selling in those areas with multiple offers that are not short sales or foreclosures.
San Francisco—The Lakeside office reports there seems to be a huge backlog at the banks. Many conforming rate FHA loans are being drawn out way past the estimated close of escrow date. Every deal is complicated by the new lending practices that are being implemented. The Lombard office reported the market is picking up steam. Multiple offers are on the heels of healthy price reductions or aggressively priced fresh listings. Most activity is under $1m. Still numerous escrows problems—mostly related to financing. The Van Ness office reports some very exciting news in the upper end arena.. In fact, we closed 13 deals for over $15,000,000. There is about the same activity for +million and -million. Strong activity continues. Our Noriega office reports we had a busy week as far as pending sales is concerned. But we really need more listings in the entry level.
Santa Cruz County—Still no word on any new REO business. This is a mystery. South county inventory is depleted and buyers are now competing on most of the lower end properties. Overall the market seems to be picking up and we are seeing multiple offers on some well priced properties under $800K, especially close to the beach. There are more positive indicators in the news, consumer confidence is up and this is lending to a more favorable real estate climate overall.
Silicon Valley—San Jose Almaden reports low end continues to drive the market. Buyers are frustrated at losing out in multiple offer situations. Some homes going 25-30% over list price. San Jose Main reports inventory continues to drop as homes in the mid to low price range sell fairly quick, many with multiple offers. Low interest rates and signs that the mid range properties and below have bottomed out are fueling sales. Slower than average open house traffic this past weekend probably due to the 3 day holiday. San Jose Willow Glen reports we are busy and multiple offers are starting again. Buyers are apparently feeling more secure about the market. Good energy in the office as well. Saratoga reports we had two sales over $3 million turned in last week. Hopefully, this is a sign of an improving Previews price point.
South County—Our Gilroy office reports local inventory continues to shrink. As of today there are 146 active single family homes. 23 are bank owned, 42 are short sales and 81 have an equity position. Of the 81 there are only 9 homes listed under 500k and 40 over 1mil. Hollister reports multiple offers still a norm on most REO listings. Office activity is quiet this weekend due to the holiday. Open house activity is increasing. Short sale listings have increased. The Morgan Hill office reports the South County market remains interesting in that demand is strong for entry level homes. Great prices, coupled with tax incentives and attractive mortgage rates have stimulated this segment of the market. More importantly, Agents are reporting that optimism has replaced pessimism on the part of the buying public.
Historically speaking the week of Memorial Day quiets things down in the housing sector but this year it was a bit different. Thanks to the $8,000 first time home buyer credit, low interest rates and increased affordability, buyers in the first time home buyer market are out in droves and really are snatching up properties. It seems they have been pushing activity into the mid and higher price ranges as well. If it is truly a late Spring flurry this year, we could be in for a very busy Summer.
Until next week,
Make it a great one,
Rick
Rick Turley
Coldwell Banker Residential Brokerage San Francisco Bay Area
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
Memorial Day is behind us and the traditionally moderate summer selling season has begun. Some of our offices are saying that it’s feeling more like a late Spring season right now. Activity is fairly brisk – it goes without saying that the entry level is hot – short on listing inventory and high on Buyer demand, but there is also good activity to report in the mid-to- high end in most communities.
This week NAR announced that existing home sales rose in April with strong buyer activity, as expected, in the lower price ranges. Nationally, existing home sales increased 2.9% to a seasonally adjusted annual rate of 4.68 million units in April from a downwardly revised pace of 4.55 million units in March, but were 3.5 percent below that 4.85 million-unit level in April 2008.
While most of the sales are taking place in lower price ranges, we are seeing increased activity in the mid-priced markets. This is a domino effect; a turnaround begins with the lower price range homes and once that sector of the market is stabilized, we begin to see changes in the mid and upper price ranges. The upper end, while most recently seeing increased activity, still is considered a Buyer’s market. This seems to be fairly consistent in major Metros on both coasts.
Across most of our local MLS’s, there is approximately an average of 14+ month’s supply of homes over $2 million. This is about twice the inventory for the same period last year. Just the opposite has occurred in the <$800k market. Estimating the average month’s supply of homes across several MLS’s in this price range, we are seeing about 3 months or less – which is half of what we had this time last year – and is considered to be a Seller’s market. If you look at the same months where inventory has shrunk in the entry level – you’ll see stabilizing prices, and in some areas, increasing home values. And of course the higher end has seen declining median price as inventory has been building. This appears to be the perfect opportunity for the move up Buyer – they have a fairly captive audience for selling, and are coming from a better position to negotiate on the buying side.
It’s also important to note that investors reacted to concerns about the mounting size of our national debt this week. The yield on the 10 year T-bill increased mid-week as stocks took a hit, and interest rates for mortgages were affected by a ½ to full one percent increase. Since purchasing power decreases with a rise in interest rates, some Buyers will have an increased sense of urgency to get a signed contract on their new home.
You’ll find links to some interesting real estate stories from this week below:
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/05/28/financial/f070602D30.DTL&hw=real+estate&sn=002&sc=842
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/05/28/financial/f110028D09.DTL&hw=real+estate&sn=003&sc=766
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/28/BUJT17S3B2.DTL&hw=real+estate&sn=008&sc=607
http://sanjose.bizjournals.com/sanjose/stories/2009/05/25/daily47.html
Now, here’s a look at our week in real estate:
East Bay—Berkeley reports five of our last seven deals had multiple offers, from two or three on each to up to 12 on a wide range of asking prices. Among the lower end and REO market, the highest cash offer gets the property. One Richmond REO listing of ours received six cash offers. Castro Valley reports many Agents are saying we are back to the 2003 market. Multiple offers, frenzy of activity, houses going pending within a few days of listing. Some agents feel as though we are on the incline at this point, that we have turned the corner and the "bottom of the market is now behind us.” Danville reports Agents are getting frustrated. They are running into lots of multiple offers and having trouble getting buyers into contract. This is going on in price ranges up to about $600,000. One property in San Ramon priced at $613,000 got 30 offers this past week. Meanwhile the high end continues to slumber. Livermore reports the Tri Valley Market continues to improve each week as active listings in all three cities, Livermore, Pleasanton and Dublin declined and total pending sales in all three cities increased this past week. Orinda reports strong sales market this week with buyers ready to make offers.
Monterey County—Activity in lower price ranges continues on at a very active pace, but not the higher luxury-home price range, where we the inventory is mounting up. The last three weeks have been slow in closings for us; however, we've opened 52 new escrows in that time, which is a very positive sign for us.
North Bay—Greenbrae reports more deals going into contract, but also a bit of an increase in deals falling through. Negotiations are critical to keeping deals together. San Rafael reports a home listed in the low $700s in San Rafael went into escrow after less than a week on the market with a back up offer in place! Open houses are busy with plenty of buyers at all price points. The Petaluma office was involved in 19 multiple offer situations. Although our inventory is shrinking and multiple offers continue. The multiple offers are two and three in numbers and only one in double digits. Agents are working with multiple buyers. Interesting enough, six of the multiple offers were on properties with days on the market of 50,75,90,130,400+. Properties in the $500,000 range and up are starting to see activity. Sebastopol reports few lookers at higher priced inventory. As the lower priced homes sell with the dearth of low priced inventory we have seen a real slowdown.
Peninsula—Half Moon Bay reports a slower week with the long weekend. Listings inventory is picking up. 168 active SFR listings on the coast with only 24 pending sales; we need some serious price adjustments. Menlo Park Santa Cruz reports many Agents took advantage of the Memorial Day holiday and took time off. We were feeling some energy in the market w/some sales activity last week. Hopefully the holiday didn’t dampen the momentum. Palo Alto reports if priced well in the Palo Alto marketplace, from downtown to S. Palo Alto, we are experiencing an unusual amount of multiple offers. Almost every property priced well will have multiple offers and prices that exceed the list price from $800k to $3M. Open houses are double and triple what they have normally been-even over the holiday weekend. A lot of optimism in the Palo Alto marketplace. The volume is still low but the activity intense. San Mateo reports inventory six months ago in Daly City was over 300, today its is about 60. San Bruno & So. SF are experiencing the same. We might be building a solid base as many properties are selling in those areas with multiple offers that are not short sales or foreclosures.
San Francisco—The Lakeside office reports there seems to be a huge backlog at the banks. Many conforming rate FHA loans are being drawn out way past the estimated close of escrow date. Every deal is complicated by the new lending practices that are being implemented. The Lombard office reported the market is picking up steam. Multiple offers are on the heels of healthy price reductions or aggressively priced fresh listings. Most activity is under $1m. Still numerous escrows problems—mostly related to financing. The Van Ness office reports some very exciting news in the upper end arena.. In fact, we closed 13 deals for over $15,000,000. There is about the same activity for +million and -million. Strong activity continues. Our Noriega office reports we had a busy week as far as pending sales is concerned. But we really need more listings in the entry level.
Santa Cruz County—Still no word on any new REO business. This is a mystery. South county inventory is depleted and buyers are now competing on most of the lower end properties. Overall the market seems to be picking up and we are seeing multiple offers on some well priced properties under $800K, especially close to the beach. There are more positive indicators in the news, consumer confidence is up and this is lending to a more favorable real estate climate overall.
Silicon Valley—San Jose Almaden reports low end continues to drive the market. Buyers are frustrated at losing out in multiple offer situations. Some homes going 25-30% over list price. San Jose Main reports inventory continues to drop as homes in the mid to low price range sell fairly quick, many with multiple offers. Low interest rates and signs that the mid range properties and below have bottomed out are fueling sales. Slower than average open house traffic this past weekend probably due to the 3 day holiday. San Jose Willow Glen reports we are busy and multiple offers are starting again. Buyers are apparently feeling more secure about the market. Good energy in the office as well. Saratoga reports we had two sales over $3 million turned in last week. Hopefully, this is a sign of an improving Previews price point.
South County—Our Gilroy office reports local inventory continues to shrink. As of today there are 146 active single family homes. 23 are bank owned, 42 are short sales and 81 have an equity position. Of the 81 there are only 9 homes listed under 500k and 40 over 1mil. Hollister reports multiple offers still a norm on most REO listings. Office activity is quiet this weekend due to the holiday. Open house activity is increasing. Short sale listings have increased. The Morgan Hill office reports the South County market remains interesting in that demand is strong for entry level homes. Great prices, coupled with tax incentives and attractive mortgage rates have stimulated this segment of the market. More importantly, Agents are reporting that optimism has replaced pessimism on the part of the buying public.
Historically speaking the week of Memorial Day quiets things down in the housing sector but this year it was a bit different. Thanks to the $8,000 first time home buyer credit, low interest rates and increased affordability, buyers in the first time home buyer market are out in droves and really are snatching up properties. It seems they have been pushing activity into the mid and higher price ranges as well. If it is truly a late Spring flurry this year, we could be in for a very busy Summer.
Until next week,
Make it a great one,
Rick
Rick Turley
Coldwell Banker Residential Brokerage San Francisco Bay Area
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
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