One Good Week of News Leads to Another
Last week we had great housing news with the announcement that May home prices posted their first monthly increase since the summer of 2006 (based on the Standard & Poor’s/Case-Schiller 20-city index).
We also learned that sales of newly built and existing homes rose in June for the third consecutive month. New home construction, though still weak, is the best it has been since the fall.
This week the good news continued. As announced by the Mortgage Bankers Association, Mortgage loan application volume increased 4.4 percent compared to the previous week. On an adjusted basis, the Index increased 4.1 percent compared with the previous week and 18 percent compared with the same week one year earlier. In addition, the Refinance Index increased 7.2 percent from the previous week. The Index has climbed about 35 percent above its recent low at the end of June. The seasonally adjusted Purchase Index increased 0.9 percent from one week earlier.
Also interesting to note is this week’s release of the National Association of Realtors’ Pending Home Sales Index revealed an increase of 3.6% during the month. That was 6.7% higher than June 2008. It was the fifth straight month of increases, the first time that has happened since July 2003. The jump was much higher than expected with a consensus of industry experts put together by Briefing.com forecasting an increase of just 0.7%.
NAR’s Chief Economist Lawrence Yun had this to say, “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines.” It seems all of these incentives, much like the Cash for Clunkers program in the auto industry, is finally pushing people off of the fence.
Now, let’s take a look at this week in our local real estate:
East Bay—Castro Valley reports open houses had slightly fewer visitors last weekend. Could be the buyers are taking a breath (or out buying a new car?) or could be August vacation time. We'll know soon. Danville reports of the 19 homes pending sale in Alamo between 1million and 2million, 8 (42%) are either short sales or bank owned. There are 3 pending sales above 2 million in Alamo and 2 of these have had 1million + price reductions. So we are beginning to see movement and price adjustments at the high end. Fremont reports the market is doing well for houses priced under $600,000. If a house is priced competitively then it becomes a multiple offer situation. Oakland reports our in-house loan officer is swamped with applications for loans. The properties that are foreclosures are all hot and homes under $500K move very quickly. Short sales are not taking as long to approve and some of the properties that have been pending for a long time are starting to close
Monterey County—Activity seems to be continuing at a somewhat increased pace. Agents are holding lots of open houses, showing property, writing offers and getting a few more of those into escrow. Last week was a productive and interesting one, as we put a trophy property listed at $35 million into escrow and we closed many escrows including a wide variety of properties from $84,000 in Salinas to over $9 million in Pebble Beach.
North Bay—San Rafael/Novato reports low end inventory continues to be the most attractive to buyers with multiple offers driving prices up. Southern Marin reports more pending sales than we have seen in any one week in a long time priced from $789 to $1,520,000. Closings are robust. Seems buyers are getting off the fence in all price ranges, including Previews, our luxury home market. Sebastopol notes all multiples in the under $350,000 range. Just not enough inventory in this range to satisfy the demand. New listings are exceedingly slow. Santa Rosa reports the market is currently defined by the shortage of inventory. One Agent had a new short sale generate 24 offers with the bulk of offers less than $10,000 apart.
Peninsula—The Half Moon Bay office reported a busier than usual week. Seeing more sellers taking all contingencies to move upper end properties. Pending sales this month more than doubled from April. Menlo Park El Camino reports that we’re struggling still at the $1,500,000 range and up. Scarcity of comps is making it hard to define prices and buyers are still holding back. Palo Alto Downtown reports we’re still building inventory in the Palo Alto, Menlo Park and Los Altos areas. If well priced, we will have multiple offers. Redwood City reports an active market in the $600-$900,000 range. Short sales and REOs are garnering multiple offers; we had 19 offers on an REO in Hayward, eight were all cash. Good open house activity both Saturday and Sunday - buyers are out there many without Agents. Woodside and Portola Valley have been seriously impacted by the financial downturn. Portola Valley has faired better due to some prices being in the low range for county property. Woodside is pretty much frozen. The San Mateo office says the lack of saleable listings is slowing down sales activity.
San Francisco The Market Street office reports there were 150+ buyers through a two bedroom unit on Bryant St over the weekend looking for a deal. The rest of our open houses were well attended. One of the properties that received multiple offers was ratified after the first open house. Conference rooms have been full this week with Agents writing offers. The Van Ness office reported the market remains strong with agents ratifying and closing transactions. SF Noriega says that some anticipated REO listings they’ve been looking for are beginning to flow back in –and hoping it’s a steady flow, not a flood.
Santa Cruz County—The local market continues to be about the same with limited inventory, multiple offers on properties under $500K. The REO inventory has dried up . Very few sales in the upper end however there are a lot more showings. The slow but steady gains in the stock market along with the more positive media housing information lately seems to have contributed to a more optimistic attitude by buyers. With three months of housing price increases, buyers are realizing that we may be at the bottom.
Silicon Valley— The Cupertino office reported the office is buzzing with activity and the vibes are positive. The Los Gatos office reported good movement if priced right. The over $2.5 is still very weak. The San Jose Almaden office reports REOs continue to be hot and receive multiple offers. Short sales in some cases are moving a little faster and in other cases, not. It depends on the bank and Agent. Outlook among Agents is positive as there are numerous signs that the market is improving and properties are selling. The San Jose Willow Glen office reports the lower to middle end is extremely active. We’re still seeing multiple offers in many cases.
South County—Hollister reports active inventory for San Benito County is down. June new listings for SFRs were 94. We had 78 new listings for the month of July. Average list price for June was $288K. REO and short sale offers competing with cash buyers. There are appraisal issues for properties way over list price offers. The good news is we have lots of buyers that are pre-approved and ready to buy! Morgan Hill reported, although short sales and REO's remain the order of the day, the office has experienced several "Civilian Sales" (not short or REO). In fact, a Gilroy home listed with a Morgan Hill Agent at over a million had two offers in the first week that it was on the market. In addition, this week the office put two homes into contract listed for over $750,000 that were also "Civilian" listings.
Overall the market this week is much like it has been over the last several. Low-end sales have been the strongest segment of the market, an indication that the first-time homebuyers tax credit is contributing to the rise. The clock, however, is ticking on this credit and it may have buyers stepping up their shopping to get their purchases in under the wire. Because it may take as long as two months to close on a home after signing a contract, first time home buyers must act fairly soon to take advantage of the credit. To qualify, they must close on the sale by November 30.
I’m also pleased to report more Previews high-end sales this week from our Luxury Leader Coldwell Banker offices. Among last week’s closings are: San Francisco -$11.5M Ross -$11M Pebble Beach- $9.2M Hillsborough- $8M Atherton- a $5.3M and a $3.9M closing Monte Sereno (Los Gatos/Saratoga) -$4.2M Orinda $3.5M Los Altos $3.6M and 5 more in the City between $2M and $3M. I’m very proud of the fact that we are not only the Bay Area Market Leader – but also, thanks to our Previews program, and our incredible Previews agents –we dominate the Luxury market as well. As confidence begins to return to several economic sectors (some of us are finally starting to open up the mail when the 401K statements come), we will see continued activity in our Previews markets around the Bay Area. Price/Value/Condition will remain to be key and critical for these sales to continue.
All the Best until Next Week-
Rick
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
Monday, August 10, 2009
Weekly Market Update
YOU’VE GOT TO GO THROUGH “LESS BAD” TO GET TO GOOD
July 31, 2009
It seemed everywhere you looked this week, the media was reporting on some sort of positive indicator relating to the real estate market. For starters, Good Morning America ran a story on Tuesday about the state of the housing market. You can see the interview here: http://abcnews.go.com/video/playerIndex?id=8190034 Liz Ann Sanders, the Chief Investment Strategist for Charles Schwab, and Mike Santoli, Assoc Editor of Barron’s were interviewed. Essentially they both indicated there are enough cumulative signs from indicators to say that things are not only “less bad”, but we are starting to see some pockets of improvement in the housing market. Among the vital signs they said to watch for in calling a recovery are; Index of Leading Economic Indicators, currently up three months in a row; drop in new unemployment claims (the four week average is down 93,000 from the peak, and never before has there been this large of a drop while still being in a recession); and the spread between short term (set by Fed) and long term (driven by the market) interest rates, which is widening. Additionally an opinion was shared that if the Dow stays above 8,000 – this would be a good indicator that we’re on the road to recovery. This week we danced over the 9,000 mark, closing today at 9,171; making it the best July for the Dow in over 20 years.
Our industry was the first to be hit by the economic downturn and if all continues on this path, we will be the first out. We probably won’t see housing numbers start to appreciate across the board anytime soon. What we are seeing right now are signs we typically see at the bottoming-out of a down market. Speculators and investors are competing with first time home buyers. Those individuals are going to continue to gobble up the inventory—both REOs and non-bank sellers at the entry price level. In many metros across the country, there are very low levels of inventory at the low end. I was on the phone this afternoon with the Coldwell Banker president for Arizona. They were hit hard, and early, with foreclosures. He told me that today the Phoenix Metro area has under 2 months supply at their entry level, <$250k – yet a 7 years supply of inventory at their estate home level of $2M+.
Also this week the Standard & Poor’s/Case-Schiller 20-city index was released and in it, home prices in May posted their first monthly increase since the summer of 2006. Prices rose from April in 13 of the metro areas tracked, notably Cleveland, Dallas, Boston and the Bay Area. The news followed reports showing sales of newly built and existing homes rising in June for the third consecutive month. New home construction, though still weak, is the best it’s been since the fall.
Now here’s a local look at our past week in real estate:
East Bay—Berkeley reports REOs continue to amaze. One Richmond property received 36 offers and the bank countered six of them, which were all cash. Appraisals are still a challenge, with appraisers appearing from San Jose, Sacramento and other areas out of the market area. One appraiser admitted he'd gone to Zillow for numbers. Castro Valley reported that inventory is flying off the shelves. Several listings have gone into contract within just a few days of listing. We've had a few houses on the books for months that have finally ratified offers and gone into contract. Fremont reports listing and sales have decreased due to lack of inventory. REO and short sales still moving quickly. Fair market/seller owned listings are even moving faster due to lack of inventory. Buyer competition is fierce on all properties under $500,000. Livermore reports the total number of active listings in Livermore continues to decline each week and total pendings keep increasing on a weekly basis. The majority of sales are below $500,000, but we are starting to see some activity in the $500,000 - $900,000 the past couple of weeks. Appraisals are still an issue, and the market values determined by individual appraisers are unpredictable and arbitrary at best! Walnut Creek reports very low inventory in every corner of our market. Consequently, multiple offers on most listings, especially ones priced below $500,000. Orinda reports steady sales activity, with the high end homes beginning to move, but at reduced prices.
Monterey County—The newspapers and TV are now reporting increased sales and even sales prices in some areas and it seems to be spurring on some buyers to finally make a move. Our Agents are writing more offers these days. Still buyers are cautious and want to make sure they get a good value. We had a couple of higher-priced properties close last week, one around $1.5 million and the other around $3 million.
North Bay—Southern Marin reports heated-up activity at all price points. From the Greenbrae office: “you’d think summer would be much slower but there is still quite a buzz of activity.” San Rafael reports listing inventory is still low. The buyers are still flocking to Novato for well priced homes. Petaluma reports frenzied activity in the $350,000 under range. One property had 48 offers and rumored to go well over asking. Inventory in that price range is snatched up or in multiple offer negotiations directly after listing is posted on MLS. We are starting to see more movement in the $500,000-750,000 range. Sebastopol reports low end inventory continues to fly off the shelves with multiple offers. Agents are busy writing offers and managing client expectations. Santa Rosa reports almost all lower priced homes generate multiple offers. Mid priced homes, if overpriced, will sit without lower offers and many buyers are stuck in shopping mode finding reasons not to pull the trigger.
Peninsula—Half Moon Bay reports they need more inventory in the $500k to the $800k range as that is what seems to move. High end over the $1m mark is still very slow. Menlo Park El Camino reports four offers on a million dollar house. Buyers continue to migrate to VALUE. Otherwise they stay in the background. Open houses continue to be pretty strong even for mid July and buyers openly talk of waiting for further reductions. Menlo Park Santa Cruz Avenue reports we had a $5M & $4M sale this week. All other price ranges are busy for open houses. Redwood City reports good open house activity, especially on new listings. Well priced homes in most areas move within one to two weeks (well priced is the key word). We’re seeing multiple offers on REO/short sales. Woodside reports very slow here in the country. The high end is very slow and sellers are slow to realize that reduced prices are the only way to move their properties. This high end will be the last to actually see the lower prices and accept them as they are able to hang on longer.
San Francisco—The Lombard office reports good news that our $1.4 - $2.2 market in the City has some deals. Four REO listings this week all lasted less than four days with 8, 15, 25, and 30 offers. On the contrary, the Market Street office reported an unusual week where there were no multiple offers. Good traffic at open houses and offers coming in after price reductions. The Noriega office reported a slow week for new contracts last week, BUT activity is definitely up. A lot of offers and counter offers out. It takes a lot of negotiation to ratify a contract. The Van Ness office had a phenomenal week reporting it closed $30,000,000+ this week (15 sides) and ratified 16 deals.
Santa Cruz County—Market activity seems to be steady. The agents are definitely feeling more optimistic about the market. Showing activity and open house attendance has been very good; we have a lot of "out of towners" from Palo Alto - Los Altos area as well as the East Bay looking for beach homes. Prices have gone up the last three months here and the lower end properties are selling quickly.
Silicon Valley—The Cupertino office reports the market is active and Agents are working hard, especially for August. San Jose Willow Glen office reports things have slowed up a bit. Agents are writing a lot of offers that are getting rejected. Also, some of our existing sales are sold at one price and are not getting appraised. Therefore, prices are lower than what they originally sold for. The San Jose Main office reports a very busy week with sales, mostly $250-500K. Open houses were extremely busy in all price ranges. Inventory seems to have flattened out.
South County—Gilroy reports traditionally, this week is slow due to the Garlic Festival. The past several weeks have been slow due to lack of inventory and vacations for both Agents and clients. Hollister reports short sale pendings are falling apart and becoming active in a continuous cycle. Active inventory on $300K and under are decreasing. Great floor activity and open house activity. Most REO listings have a pre-qualification process in place before submitting offers. Typical 3 days on the market before submitting offers to the bank giving the property time for multiple offers creating more frustrations for the buyers. Morgan Hill reports once again, they managed to put 53 properties into contract for the month of July. Agents are mostly representing buyers—listings are few and far between. It is refreshing to see that there is increased interest in real estate from the buying public—as open house attendance and floor calls are at a very high level.
I’ll leave you with two interesting articles from the week. In the first, our Orinda Manager Val Cook-Watkins is quoted on the local market:
http://www.insidebayarea.com/business/ci_12932118
http://www.usatoday.com/money/economy/housing/2009-07-28-home-prices_N.htm
Have a great week!
Rick
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
July 31, 2009
It seemed everywhere you looked this week, the media was reporting on some sort of positive indicator relating to the real estate market. For starters, Good Morning America ran a story on Tuesday about the state of the housing market. You can see the interview here: http://abcnews.go.com/video/playerIndex?id=8190034 Liz Ann Sanders, the Chief Investment Strategist for Charles Schwab, and Mike Santoli, Assoc Editor of Barron’s were interviewed. Essentially they both indicated there are enough cumulative signs from indicators to say that things are not only “less bad”, but we are starting to see some pockets of improvement in the housing market. Among the vital signs they said to watch for in calling a recovery are; Index of Leading Economic Indicators, currently up three months in a row; drop in new unemployment claims (the four week average is down 93,000 from the peak, and never before has there been this large of a drop while still being in a recession); and the spread between short term (set by Fed) and long term (driven by the market) interest rates, which is widening. Additionally an opinion was shared that if the Dow stays above 8,000 – this would be a good indicator that we’re on the road to recovery. This week we danced over the 9,000 mark, closing today at 9,171; making it the best July for the Dow in over 20 years.
Our industry was the first to be hit by the economic downturn and if all continues on this path, we will be the first out. We probably won’t see housing numbers start to appreciate across the board anytime soon. What we are seeing right now are signs we typically see at the bottoming-out of a down market. Speculators and investors are competing with first time home buyers. Those individuals are going to continue to gobble up the inventory—both REOs and non-bank sellers at the entry price level. In many metros across the country, there are very low levels of inventory at the low end. I was on the phone this afternoon with the Coldwell Banker president for Arizona. They were hit hard, and early, with foreclosures. He told me that today the Phoenix Metro area has under 2 months supply at their entry level, <$250k – yet a 7 years supply of inventory at their estate home level of $2M+.
Also this week the Standard & Poor’s/Case-Schiller 20-city index was released and in it, home prices in May posted their first monthly increase since the summer of 2006. Prices rose from April in 13 of the metro areas tracked, notably Cleveland, Dallas, Boston and the Bay Area. The news followed reports showing sales of newly built and existing homes rising in June for the third consecutive month. New home construction, though still weak, is the best it’s been since the fall.
Now here’s a local look at our past week in real estate:
East Bay—Berkeley reports REOs continue to amaze. One Richmond property received 36 offers and the bank countered six of them, which were all cash. Appraisals are still a challenge, with appraisers appearing from San Jose, Sacramento and other areas out of the market area. One appraiser admitted he'd gone to Zillow for numbers. Castro Valley reported that inventory is flying off the shelves. Several listings have gone into contract within just a few days of listing. We've had a few houses on the books for months that have finally ratified offers and gone into contract. Fremont reports listing and sales have decreased due to lack of inventory. REO and short sales still moving quickly. Fair market/seller owned listings are even moving faster due to lack of inventory. Buyer competition is fierce on all properties under $500,000. Livermore reports the total number of active listings in Livermore continues to decline each week and total pendings keep increasing on a weekly basis. The majority of sales are below $500,000, but we are starting to see some activity in the $500,000 - $900,000 the past couple of weeks. Appraisals are still an issue, and the market values determined by individual appraisers are unpredictable and arbitrary at best! Walnut Creek reports very low inventory in every corner of our market. Consequently, multiple offers on most listings, especially ones priced below $500,000. Orinda reports steady sales activity, with the high end homes beginning to move, but at reduced prices.
Monterey County—The newspapers and TV are now reporting increased sales and even sales prices in some areas and it seems to be spurring on some buyers to finally make a move. Our Agents are writing more offers these days. Still buyers are cautious and want to make sure they get a good value. We had a couple of higher-priced properties close last week, one around $1.5 million and the other around $3 million.
North Bay—Southern Marin reports heated-up activity at all price points. From the Greenbrae office: “you’d think summer would be much slower but there is still quite a buzz of activity.” San Rafael reports listing inventory is still low. The buyers are still flocking to Novato for well priced homes. Petaluma reports frenzied activity in the $350,000 under range. One property had 48 offers and rumored to go well over asking. Inventory in that price range is snatched up or in multiple offer negotiations directly after listing is posted on MLS. We are starting to see more movement in the $500,000-750,000 range. Sebastopol reports low end inventory continues to fly off the shelves with multiple offers. Agents are busy writing offers and managing client expectations. Santa Rosa reports almost all lower priced homes generate multiple offers. Mid priced homes, if overpriced, will sit without lower offers and many buyers are stuck in shopping mode finding reasons not to pull the trigger.
Peninsula—Half Moon Bay reports they need more inventory in the $500k to the $800k range as that is what seems to move. High end over the $1m mark is still very slow. Menlo Park El Camino reports four offers on a million dollar house. Buyers continue to migrate to VALUE. Otherwise they stay in the background. Open houses continue to be pretty strong even for mid July and buyers openly talk of waiting for further reductions. Menlo Park Santa Cruz Avenue reports we had a $5M & $4M sale this week. All other price ranges are busy for open houses. Redwood City reports good open house activity, especially on new listings. Well priced homes in most areas move within one to two weeks (well priced is the key word). We’re seeing multiple offers on REO/short sales. Woodside reports very slow here in the country. The high end is very slow and sellers are slow to realize that reduced prices are the only way to move their properties. This high end will be the last to actually see the lower prices and accept them as they are able to hang on longer.
San Francisco—The Lombard office reports good news that our $1.4 - $2.2 market in the City has some deals. Four REO listings this week all lasted less than four days with 8, 15, 25, and 30 offers. On the contrary, the Market Street office reported an unusual week where there were no multiple offers. Good traffic at open houses and offers coming in after price reductions. The Noriega office reported a slow week for new contracts last week, BUT activity is definitely up. A lot of offers and counter offers out. It takes a lot of negotiation to ratify a contract. The Van Ness office had a phenomenal week reporting it closed $30,000,000+ this week (15 sides) and ratified 16 deals.
Santa Cruz County—Market activity seems to be steady. The agents are definitely feeling more optimistic about the market. Showing activity and open house attendance has been very good; we have a lot of "out of towners" from Palo Alto - Los Altos area as well as the East Bay looking for beach homes. Prices have gone up the last three months here and the lower end properties are selling quickly.
Silicon Valley—The Cupertino office reports the market is active and Agents are working hard, especially for August. San Jose Willow Glen office reports things have slowed up a bit. Agents are writing a lot of offers that are getting rejected. Also, some of our existing sales are sold at one price and are not getting appraised. Therefore, prices are lower than what they originally sold for. The San Jose Main office reports a very busy week with sales, mostly $250-500K. Open houses were extremely busy in all price ranges. Inventory seems to have flattened out.
South County—Gilroy reports traditionally, this week is slow due to the Garlic Festival. The past several weeks have been slow due to lack of inventory and vacations for both Agents and clients. Hollister reports short sale pendings are falling apart and becoming active in a continuous cycle. Active inventory on $300K and under are decreasing. Great floor activity and open house activity. Most REO listings have a pre-qualification process in place before submitting offers. Typical 3 days on the market before submitting offers to the bank giving the property time for multiple offers creating more frustrations for the buyers. Morgan Hill reports once again, they managed to put 53 properties into contract for the month of July. Agents are mostly representing buyers—listings are few and far between. It is refreshing to see that there is increased interest in real estate from the buying public—as open house attendance and floor calls are at a very high level.
I’ll leave you with two interesting articles from the week. In the first, our Orinda Manager Val Cook-Watkins is quoted on the local market:
http://www.insidebayarea.com/business/ci_12932118
http://www.usatoday.com/money/economy/housing/2009-07-28-home-prices_N.htm
Have a great week!
Rick
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
Weekly Market Update
Realtor.com Survey Tells A Lot About Today’s Housing Market
Earlier this week Realtor.com released a survey discussing some of the key factors which are motivating buyers in today’s market. It was an interesting read and I thought I’d share the highlights:
“Price declines and low interest rates are motivating millions of home buyers to shop for bargains in the most affordable housing market in 28 years, yet at the same time only one in ten of today’s home owners say they have delayed selling their home due to those same market conditions.”
“Affordability is clearly driving more than two thirds (65.2%) of potential buyers back into today’s housing market. Nearly one of five prospective buyers (19.6%) say foreclosure bargains in their communities would motivate them to purchase a home, the most important reason they’re interested in buying in the near future.”
“An additional 15.5 percent said they’re motivated to buy soon because they think prices are as low as they will go and another 15.5 percent said they were motivated to buy before interest rates rise. For 14.6 percent of first time home buyers, the Federal $8,000 tax credit is the impetus to purchase a new home in the future.”
“In the past year, the Housing Affordability Index maintained by the National Association of Realtors has increased 29 percent overall and 19 percent for first-time homebuyers, and is higher now than at any time in the 28 year history of the index.”
"Value is clearly motivating potential home buyers, and today's new level of affordability is still an under-appreciated reality that needs to be explored," said REALTOR.com President, Errol Samuelson. "The variety and quality of homes currently within reach of the average American family is much greater than most people realize. Making credit available to responsible borrowers and building consumer confidence in the economy are now key factors in restoring vitality to the nation's housing market."
Now, let’s take a look at this week in real estate: The key takeaways—inventory is low with multiple offers in the lower price ranges, and improved activity in the higher priced markets.
· East Bay—Berkeley reports the Agents are busy working with buyers. They are writing offers, sometimes five or six after the original "bonding" offer. Castro Valley reports that there are plenty of backup offers for each deal that falls through, which is helping us to get our inventory sold. We are seeing a few more listings trickle in, but we are still hungry for fresh inventory. We do notice that there is a little more featured on brokers tour than in weeks prior, and that is a good sign. We are actively selling houses but the short sale lender approval process is still frightfully slow. We are still seeing increased activity in the midrange markets. Livermore reports the inventory of active listings (all types) continues in its downward slide in all three cities, Livermore, Pleasanton and Dublin, in the Tri-Valley area this past week. Total pending sales also declined this past week in all three cities, which may have attributed to the extended 4th of July holiday weekend. Still plenty of buyers are in the market, and listings that are properly priced are selling with multiple offers. Walnut Creek reports buyers are out in droves looking and making offers. Almost every listing under $350K (except condos) is getting multiple offers (as many as 10, 20, 30 and even 40+). One listing in Concord priced under $225,000 had 15 offers and offers were as high as $100,000 over asking. Agents with FHA buyers are writing multiple offers (one case - 28!) before getting one accepted. Definitely a shortage of inventory. Financing seems to be the challenge in almost every transaction. Either appraisals are too low, guidelines too strict or properties are too distressed for FHA financing. Also, 27% of buyer controlled closed sales in June were ALL CASH. Cash is still king.
· Monterey County—Overall the market seems to be continuing at a steady pace, with REOs in Seaside and Marina going relatively quickly and often with multiple offers. We had one listed at $180,000 that had 15 offers and sold for about $240,000. Sellers are becoming more realistic in pricing or, if they don't need to sell, are pulling their homes off the market and renting them. And buyers are still looking for value and are making offers when they see a property priced right or even a little below current comps.
· North Bay—Greenbrae reports there are great new listings coming on the market so hopefully buyers are seeing properties that appeal to them and are taking advantage of less competition over the summer as well as relatively low interest rates to make them happen. San Rafael reports activity slowed down dramatically in the past week at open houses due to the holiday. Many buyers are writing more aggressive offers after losing out in the entry level price point in San Rafael. Petaluma reports buyers are out in force. The properties priced below $500,000 are still receiving multiple offers in the double digits. We are starting to see movement in the next level $500-$800,000. Inventory still is the challenge. Sebastopol reports every offer on properties under $300,000 is multiple (as many as 16 offers). The open house activity below $600,000 is very active; above that it slows down.
· Peninsula—Burlingame reports the holiday weekend saw fewer opens but the ones that were open reported fabulous attendance. One San Mateo listing held open on Saturday the 4th had over 35 groups through and even more on Sunday. Agents were showing property as well. Agents felt that although the opens were generally well attended there wasn't a lot of motivation present. Buyers are watching jobs, the stock market and economic reports which are not instilling confidence this week. At the same time however we are having our best month of sales for this year. Many of our current buyers have been working with their Agents for some a year or more. It has taken many of them a long time to decide on the timing of when to buy. Half Moon Bay reports a slow couple of weeks due to the 4th of July holiday and graduations. Activity under the $800,000 range is active with showings, anything over $1.1m is just sitting. Redwood City reports low inventory continues. Not much activity due to the beginning of the summer and the fourth. Still a lot of first time buyers in the market. San Mateo reports many multiples on the lower end especially in Daly City, So. San Francisco and San Bruno. Strong market if price is reasonable.
· San Francisco—Lakeside reports the market under $800,000 is very dynamic. The Lombard office reported a divided market, with about $800,000 the dividing line. $1.6-$2.2 especially slow, a prime buyer’s market. REOs very active with multiple offers, often all cash. Market Street reported Agents worked really hard just before the holiday putting deals together for excited buyers and anxious sellers. The holiday weekend did not see a lot of open houses but the ones that were held open had good traffic with qualified buyers coming through. One Agent commented that a sentiment with buyers is that they have to move now because they believe it will heat up in September and they want to get into a home before then. One property in district 5 received an over asking all cash offer after the open house and the sellers ratified it quickly.
· Santa Cruz County—June turned out better than many previous months with nearly 60 sales overall. The Santa Cruz office had 17 sales and the Agents are very busy on that side of town, where well priced properties near UCSC continue to be in high demand. There is a strong rental market there and the ocean properties are receiving a lot of activity in this area also. Capitola office closed an ocean front property last week at $5,125,000. While it was significantly less than the asking price, with a longer market time, it was the 2nd highest sale in the county for the year.
· Silicon Valley—Cupertino DeAnza reports we are seeing 15 to 20 offers on the low-end homes. One listing in Santa Clara (listed @ $550,000) got 17 offers and was bid up to over $600,000. Conversely we are seeing many sellers having to sell NOT "as is" in the less popular (i.e. higher) price ranges. San Jose Willow Glen reports we have slowed up a bit as far as the sales go but our listings have picked up. Our Agents are busy with buyers that are looking for the perfect house to meet their needs.
· South County—Gilroy reports the 4th of July week was very quiet. Agents representing banks are starting to see new listing assignments and an increase in BPO’s. Hopefully, this is a sign of more REO properties coming on the market. The shortage of entry level homes has caused multiple offer situations on all properties within FHA loan limits. Hollister reports we have several Agents that have buyers unable to get contracts accepted due to multiple offers or all cash offers on most REO listings. Communication is lacking on some of these transactions in this market. Floor calls have decreased due to the holiday weekend. Morgan Hill reports last month, the Morgan Hill Agents managed to post 52 sales on their office sales board. There isn't enough inventory to satisfy buyer demand in the $300,000 to $500,000 price range. These types of properties are selling quickly with multiple offers. Appraisals are becoming an issue—and some listing Agents are countering out the appraisal contingency all together.
Although it remains to be the lower-priced entry level that is driving the bus in all our geographic markets, I think it’s important to note that the current uncertainty in the financial markets is kicking up some activity in our high end properties. Our Greenbrae office reported a closed sale in Tiburon at $7.5M. Our Aptos office closed an oceanfront property in Santa Cruz over $5M. Both Santa Rosa and Sebastopol offices had several Previews properties going into contract the past two weeks. The areas noted have had longer standing inventory in the high end – Santa Cruz Co with a 26 MSI over $2M, Sonoma and Marin Counties with a 17 MSI over $2M. San Francisco is seeing some $3M to $5M activity nearly every week, although sales over $3M are about 30% fewer than this time last year. The contrast here is a 5 months supply of inventory over $2M. East Bay offices have seen a recent pick up in higher end sales; Livermore noted there are more high-end pending sales currently than the total number of closed sales at that price point in the last 6 months of 2008. Sporadic high end activity occurs in San Mateo and Santa Clara counties, where there is an average of 10 MSI for homes listed over $2M. We are seeing more contingent move-up sales now; where homeowners are taking advantage of softened prices on the move-up property, combined with today’s great interest rates. It won’t last forever!
Until next week,
Make it a great one,
Rick
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
Earlier this week Realtor.com released a survey discussing some of the key factors which are motivating buyers in today’s market. It was an interesting read and I thought I’d share the highlights:
“Price declines and low interest rates are motivating millions of home buyers to shop for bargains in the most affordable housing market in 28 years, yet at the same time only one in ten of today’s home owners say they have delayed selling their home due to those same market conditions.”
“Affordability is clearly driving more than two thirds (65.2%) of potential buyers back into today’s housing market. Nearly one of five prospective buyers (19.6%) say foreclosure bargains in their communities would motivate them to purchase a home, the most important reason they’re interested in buying in the near future.”
“An additional 15.5 percent said they’re motivated to buy soon because they think prices are as low as they will go and another 15.5 percent said they were motivated to buy before interest rates rise. For 14.6 percent of first time home buyers, the Federal $8,000 tax credit is the impetus to purchase a new home in the future.”
“In the past year, the Housing Affordability Index maintained by the National Association of Realtors has increased 29 percent overall and 19 percent for first-time homebuyers, and is higher now than at any time in the 28 year history of the index.”
"Value is clearly motivating potential home buyers, and today's new level of affordability is still an under-appreciated reality that needs to be explored," said REALTOR.com President, Errol Samuelson. "The variety and quality of homes currently within reach of the average American family is much greater than most people realize. Making credit available to responsible borrowers and building consumer confidence in the economy are now key factors in restoring vitality to the nation's housing market."
Now, let’s take a look at this week in real estate: The key takeaways—inventory is low with multiple offers in the lower price ranges, and improved activity in the higher priced markets.
· East Bay—Berkeley reports the Agents are busy working with buyers. They are writing offers, sometimes five or six after the original "bonding" offer. Castro Valley reports that there are plenty of backup offers for each deal that falls through, which is helping us to get our inventory sold. We are seeing a few more listings trickle in, but we are still hungry for fresh inventory. We do notice that there is a little more featured on brokers tour than in weeks prior, and that is a good sign. We are actively selling houses but the short sale lender approval process is still frightfully slow. We are still seeing increased activity in the midrange markets. Livermore reports the inventory of active listings (all types) continues in its downward slide in all three cities, Livermore, Pleasanton and Dublin, in the Tri-Valley area this past week. Total pending sales also declined this past week in all three cities, which may have attributed to the extended 4th of July holiday weekend. Still plenty of buyers are in the market, and listings that are properly priced are selling with multiple offers. Walnut Creek reports buyers are out in droves looking and making offers. Almost every listing under $350K (except condos) is getting multiple offers (as many as 10, 20, 30 and even 40+). One listing in Concord priced under $225,000 had 15 offers and offers were as high as $100,000 over asking. Agents with FHA buyers are writing multiple offers (one case - 28!) before getting one accepted. Definitely a shortage of inventory. Financing seems to be the challenge in almost every transaction. Either appraisals are too low, guidelines too strict or properties are too distressed for FHA financing. Also, 27% of buyer controlled closed sales in June were ALL CASH. Cash is still king.
· Monterey County—Overall the market seems to be continuing at a steady pace, with REOs in Seaside and Marina going relatively quickly and often with multiple offers. We had one listed at $180,000 that had 15 offers and sold for about $240,000. Sellers are becoming more realistic in pricing or, if they don't need to sell, are pulling their homes off the market and renting them. And buyers are still looking for value and are making offers when they see a property priced right or even a little below current comps.
· North Bay—Greenbrae reports there are great new listings coming on the market so hopefully buyers are seeing properties that appeal to them and are taking advantage of less competition over the summer as well as relatively low interest rates to make them happen. San Rafael reports activity slowed down dramatically in the past week at open houses due to the holiday. Many buyers are writing more aggressive offers after losing out in the entry level price point in San Rafael. Petaluma reports buyers are out in force. The properties priced below $500,000 are still receiving multiple offers in the double digits. We are starting to see movement in the next level $500-$800,000. Inventory still is the challenge. Sebastopol reports every offer on properties under $300,000 is multiple (as many as 16 offers). The open house activity below $600,000 is very active; above that it slows down.
· Peninsula—Burlingame reports the holiday weekend saw fewer opens but the ones that were open reported fabulous attendance. One San Mateo listing held open on Saturday the 4th had over 35 groups through and even more on Sunday. Agents were showing property as well. Agents felt that although the opens were generally well attended there wasn't a lot of motivation present. Buyers are watching jobs, the stock market and economic reports which are not instilling confidence this week. At the same time however we are having our best month of sales for this year. Many of our current buyers have been working with their Agents for some a year or more. It has taken many of them a long time to decide on the timing of when to buy. Half Moon Bay reports a slow couple of weeks due to the 4th of July holiday and graduations. Activity under the $800,000 range is active with showings, anything over $1.1m is just sitting. Redwood City reports low inventory continues. Not much activity due to the beginning of the summer and the fourth. Still a lot of first time buyers in the market. San Mateo reports many multiples on the lower end especially in Daly City, So. San Francisco and San Bruno. Strong market if price is reasonable.
· San Francisco—Lakeside reports the market under $800,000 is very dynamic. The Lombard office reported a divided market, with about $800,000 the dividing line. $1.6-$2.2 especially slow, a prime buyer’s market. REOs very active with multiple offers, often all cash. Market Street reported Agents worked really hard just before the holiday putting deals together for excited buyers and anxious sellers. The holiday weekend did not see a lot of open houses but the ones that were held open had good traffic with qualified buyers coming through. One Agent commented that a sentiment with buyers is that they have to move now because they believe it will heat up in September and they want to get into a home before then. One property in district 5 received an over asking all cash offer after the open house and the sellers ratified it quickly.
· Santa Cruz County—June turned out better than many previous months with nearly 60 sales overall. The Santa Cruz office had 17 sales and the Agents are very busy on that side of town, where well priced properties near UCSC continue to be in high demand. There is a strong rental market there and the ocean properties are receiving a lot of activity in this area also. Capitola office closed an ocean front property last week at $5,125,000. While it was significantly less than the asking price, with a longer market time, it was the 2nd highest sale in the county for the year.
· Silicon Valley—Cupertino DeAnza reports we are seeing 15 to 20 offers on the low-end homes. One listing in Santa Clara (listed @ $550,000) got 17 offers and was bid up to over $600,000. Conversely we are seeing many sellers having to sell NOT "as is" in the less popular (i.e. higher) price ranges. San Jose Willow Glen reports we have slowed up a bit as far as the sales go but our listings have picked up. Our Agents are busy with buyers that are looking for the perfect house to meet their needs.
· South County—Gilroy reports the 4th of July week was very quiet. Agents representing banks are starting to see new listing assignments and an increase in BPO’s. Hopefully, this is a sign of more REO properties coming on the market. The shortage of entry level homes has caused multiple offer situations on all properties within FHA loan limits. Hollister reports we have several Agents that have buyers unable to get contracts accepted due to multiple offers or all cash offers on most REO listings. Communication is lacking on some of these transactions in this market. Floor calls have decreased due to the holiday weekend. Morgan Hill reports last month, the Morgan Hill Agents managed to post 52 sales on their office sales board. There isn't enough inventory to satisfy buyer demand in the $300,000 to $500,000 price range. These types of properties are selling quickly with multiple offers. Appraisals are becoming an issue—and some listing Agents are countering out the appraisal contingency all together.
Although it remains to be the lower-priced entry level that is driving the bus in all our geographic markets, I think it’s important to note that the current uncertainty in the financial markets is kicking up some activity in our high end properties. Our Greenbrae office reported a closed sale in Tiburon at $7.5M. Our Aptos office closed an oceanfront property in Santa Cruz over $5M. Both Santa Rosa and Sebastopol offices had several Previews properties going into contract the past two weeks. The areas noted have had longer standing inventory in the high end – Santa Cruz Co with a 26 MSI over $2M, Sonoma and Marin Counties with a 17 MSI over $2M. San Francisco is seeing some $3M to $5M activity nearly every week, although sales over $3M are about 30% fewer than this time last year. The contrast here is a 5 months supply of inventory over $2M. East Bay offices have seen a recent pick up in higher end sales; Livermore noted there are more high-end pending sales currently than the total number of closed sales at that price point in the last 6 months of 2008. Sporadic high end activity occurs in San Mateo and Santa Clara counties, where there is an average of 10 MSI for homes listed over $2M. We are seeing more contingent move-up sales now; where homeowners are taking advantage of softened prices on the move-up property, combined with today’s great interest rates. It won’t last forever!
Until next week,
Make it a great one,
Rick
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
Weekly Market Update
Realtor.com Survey Tells A Lot About Today’s Housing Market
Earlier this week Realtor.com released a survey discussing some of the key factors which are motivating buyers in today’s market. It was an interesting read and I thought I’d share the highlights:
“Price declines and low interest rates are motivating millions of home buyers to shop for bargains in the most affordable housing market in 28 years, yet at the same time only one in ten of today’s home owners say they have delayed selling their home due to those same market conditions.”
“Affordability is clearly driving more than two thirds (65.2%) of potential buyers back into today’s housing market. Nearly one of five prospective buyers (19.6%) say foreclosure bargains in their communities would motivate them to purchase a home, the most important reason they’re interested in buying in the near future.”
“An additional 15.5 percent said they’re motivated to buy soon because they think prices are as low as they will go and another 15.5 percent said they were motivated to buy before interest rates rise. For 14.6 percent of first time home buyers, the Federal $8,000 tax credit is the impetus to purchase a new home in the future.”
“In the past year, the Housing Affordability Index maintained by the National Association of Realtors has increased 29 percent overall and 19 percent for first-time homebuyers, and is higher now than at any time in the 28 year history of the index.”
"Value is clearly motivating potential home buyers, and today's new level of affordability is still an under-appreciated reality that needs to be explored," said REALTOR.com President, Errol Samuelson. "The variety and quality of homes currently within reach of the average American family is much greater than most people realize. Making credit available to responsible borrowers and building consumer confidence in the economy are now key factors in restoring vitality to the nation's housing market."
Now, let’s take a look at this week in real estate: The key takeaways—inventory is low with multiple offers in the lower price ranges, and improved activity in the higher priced markets.
· East Bay—Berkeley reports the Agents are busy working with buyers. They are writing offers, sometimes five or six after the original "bonding" offer. Castro Valley reports that there are plenty of backup offers for each deal that falls through, which is helping us to get our inventory sold. We are seeing a few more listings trickle in, but we are still hungry for fresh inventory. We do notice that there is a little more featured on brokers tour than in weeks prior, and that is a good sign. We are actively selling houses but the short sale lender approval process is still frightfully slow. We are still seeing increased activity in the midrange markets. Livermore reports the inventory of active listings (all types) continues in its downward slide in all three cities, Livermore, Pleasanton and Dublin, in the Tri-Valley area this past week. Total pending sales also declined this past week in all three cities, which may have attributed to the extended 4th of July holiday weekend. Still plenty of buyers are in the market, and listings that are properly priced are selling with multiple offers. Walnut Creek reports buyers are out in droves looking and making offers. Almost every listing under $350K (except condos) is getting multiple offers (as many as 10, 20, 30 and even 40+). One listing in Concord priced under $225,000 had 15 offers and offers were as high as $100,000 over asking. Agents with FHA buyers are writing multiple offers (one case - 28!) before getting one accepted. Definitely a shortage of inventory. Financing seems to be the challenge in almost every transaction. Either appraisals are too low, guidelines too strict or properties are too distressed for FHA financing. Also, 27% of buyer controlled closed sales in June were ALL CASH. Cash is still king.
· Monterey County—Overall the market seems to be continuing at a steady pace, with REOs in Seaside and Marina going relatively quickly and often with multiple offers. We had one listed at $180,000 that had 15 offers and sold for about $240,000. Sellers are becoming more realistic in pricing or, if they don't need to sell, are pulling their homes off the market and renting them. And buyers are still looking for value and are making offers when they see a property priced right or even a little below current comps.
· North Bay—Greenbrae reports there are great new listings coming on the market so hopefully buyers are seeing properties that appeal to them and are taking advantage of less competition over the summer as well as relatively low interest rates to make them happen. San Rafael reports activity slowed down dramatically in the past week at open houses due to the holiday. Many buyers are writing more aggressive offers after losing out in the entry level price point in San Rafael. Petaluma reports buyers are out in force. The properties priced below $500,000 are still receiving multiple offers in the double digits. We are starting to see movement in the next level $500-$800,000. Inventory still is the challenge. Sebastopol reports every offer on properties under $300,000 is multiple (as many as 16 offers). The open house activity below $600,000 is very active; above that it slows down.
· Peninsula—Burlingame reports the holiday weekend saw fewer opens but the ones that were open reported fabulous attendance. One San Mateo listing held open on Saturday the 4th had over 35 groups through and even more on Sunday. Agents were showing property as well. Agents felt that although the opens were generally well attended there wasn't a lot of motivation present. Buyers are watching jobs, the stock market and economic reports which are not instilling confidence this week. At the same time however we are having our best month of sales for this year. Many of our current buyers have been working with their Agents for some a year or more. It has taken many of them a long time to decide on the timing of when to buy. Half Moon Bay reports a slow couple of weeks due to the 4th of July holiday and graduations. Activity under the $800,000 range is active with showings, anything over $1.1m is just sitting. Redwood City reports low inventory continues. Not much activity due to the beginning of the summer and the fourth. Still a lot of first time buyers in the market. San Mateo reports many multiples on the lower end especially in Daly City, So. San Francisco and San Bruno. Strong market if price is reasonable.
· San Francisco—Lakeside reports the market under $800,000 is very dynamic. The Lombard office reported a divided market, with about $800,000 the dividing line. $1.6-$2.2 especially slow, a prime buyer’s market. REOs very active with multiple offers, often all cash. Market Street reported Agents worked really hard just before the holiday putting deals together for excited buyers and anxious sellers. The holiday weekend did not see a lot of open houses but the ones that were held open had good traffic with qualified buyers coming through. One Agent commented that a sentiment with buyers is that they have to move now because they believe it will heat up in September and they want to get into a home before then. One property in district 5 received an over asking all cash offer after the open house and the sellers ratified it quickly.
· Santa Cruz County—June turned out better than many previous months with nearly 60 sales overall. The Santa Cruz office had 17 sales and the Agents are very busy on that side of town, where well priced properties near UCSC continue to be in high demand. There is a strong rental market there and the ocean properties are receiving a lot of activity in this area also. Capitola office closed an ocean front property last week at $5,125,000. While it was significantly less than the asking price, with a longer market time, it was the 2nd highest sale in the county for the year.
· Silicon Valley—Cupertino DeAnza reports we are seeing 15 to 20 offers on the low-end homes. One listing in Santa Clara (listed @ $550,000) got 17 offers and was bid up to over $600,000. Conversely we are seeing many sellers having to sell NOT "as is" in the less popular (i.e. higher) price ranges. San Jose Willow Glen reports we have slowed up a bit as far as the sales go but our listings have picked up. Our Agents are busy with buyers that are looking for the perfect house to meet their needs.
· South County—Gilroy reports the 4th of July week was very quiet. Agents representing banks are starting to see new listing assignments and an increase in BPO’s. Hopefully, this is a sign of more REO properties coming on the market. The shortage of entry level homes has caused multiple offer situations on all properties within FHA loan limits. Hollister reports we have several Agents that have buyers unable to get contracts accepted due to multiple offers or all cash offers on most REO listings. Communication is lacking on some of these transactions in this market. Floor calls have decreased due to the holiday weekend. Morgan Hill reports last month, the Morgan Hill Agents managed to post 52 sales on their office sales board. There isn't enough inventory to satisfy buyer demand in the $300,000 to $500,000 price range. These types of properties are selling quickly with multiple offers. Appraisals are becoming an issue—and some listing Agents are countering out the appraisal contingency all together.
Although it remains to be the lower-priced entry level that is driving the bus in all our geographic markets, I think it’s important to note that the current uncertainty in the financial markets is kicking up some activity in our high end properties. Our Greenbrae office reported a closed sale in Tiburon at $7.5M. Our Aptos office closed an oceanfront property in Santa Cruz over $5M. Both Santa Rosa and Sebastopol offices had several Previews properties going into contract the past two weeks. The areas noted have had longer standing inventory in the high end – Santa Cruz Co with a 26 MSI over $2M, Sonoma and Marin Counties with a 17 MSI over $2M. San Francisco is seeing some $3M to $5M activity nearly every week, although sales over $3M are about 30% fewer than this time last year. The contrast here is a 5 months supply of inventory over $2M. East Bay offices have seen a recent pick up in higher end sales; Livermore noted there are more high-end pending sales currently than the total number of closed sales at that price point in the last 6 months of 2008. Sporadic high end activity occurs in San Mateo and Santa Clara counties, where there is an average of 10 MSI for homes listed over $2M. We are seeing more contingent move-up sales now; where homeowners are taking advantage of softened prices on the move-up property, combined with today’s great interest rates. It won’t last forever!
Until next week,
Make it a great one,
Rick
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
Earlier this week Realtor.com released a survey discussing some of the key factors which are motivating buyers in today’s market. It was an interesting read and I thought I’d share the highlights:
“Price declines and low interest rates are motivating millions of home buyers to shop for bargains in the most affordable housing market in 28 years, yet at the same time only one in ten of today’s home owners say they have delayed selling their home due to those same market conditions.”
“Affordability is clearly driving more than two thirds (65.2%) of potential buyers back into today’s housing market. Nearly one of five prospective buyers (19.6%) say foreclosure bargains in their communities would motivate them to purchase a home, the most important reason they’re interested in buying in the near future.”
“An additional 15.5 percent said they’re motivated to buy soon because they think prices are as low as they will go and another 15.5 percent said they were motivated to buy before interest rates rise. For 14.6 percent of first time home buyers, the Federal $8,000 tax credit is the impetus to purchase a new home in the future.”
“In the past year, the Housing Affordability Index maintained by the National Association of Realtors has increased 29 percent overall and 19 percent for first-time homebuyers, and is higher now than at any time in the 28 year history of the index.”
"Value is clearly motivating potential home buyers, and today's new level of affordability is still an under-appreciated reality that needs to be explored," said REALTOR.com President, Errol Samuelson. "The variety and quality of homes currently within reach of the average American family is much greater than most people realize. Making credit available to responsible borrowers and building consumer confidence in the economy are now key factors in restoring vitality to the nation's housing market."
Now, let’s take a look at this week in real estate: The key takeaways—inventory is low with multiple offers in the lower price ranges, and improved activity in the higher priced markets.
· East Bay—Berkeley reports the Agents are busy working with buyers. They are writing offers, sometimes five or six after the original "bonding" offer. Castro Valley reports that there are plenty of backup offers for each deal that falls through, which is helping us to get our inventory sold. We are seeing a few more listings trickle in, but we are still hungry for fresh inventory. We do notice that there is a little more featured on brokers tour than in weeks prior, and that is a good sign. We are actively selling houses but the short sale lender approval process is still frightfully slow. We are still seeing increased activity in the midrange markets. Livermore reports the inventory of active listings (all types) continues in its downward slide in all three cities, Livermore, Pleasanton and Dublin, in the Tri-Valley area this past week. Total pending sales also declined this past week in all three cities, which may have attributed to the extended 4th of July holiday weekend. Still plenty of buyers are in the market, and listings that are properly priced are selling with multiple offers. Walnut Creek reports buyers are out in droves looking and making offers. Almost every listing under $350K (except condos) is getting multiple offers (as many as 10, 20, 30 and even 40+). One listing in Concord priced under $225,000 had 15 offers and offers were as high as $100,000 over asking. Agents with FHA buyers are writing multiple offers (one case - 28!) before getting one accepted. Definitely a shortage of inventory. Financing seems to be the challenge in almost every transaction. Either appraisals are too low, guidelines too strict or properties are too distressed for FHA financing. Also, 27% of buyer controlled closed sales in June were ALL CASH. Cash is still king.
· Monterey County—Overall the market seems to be continuing at a steady pace, with REOs in Seaside and Marina going relatively quickly and often with multiple offers. We had one listed at $180,000 that had 15 offers and sold for about $240,000. Sellers are becoming more realistic in pricing or, if they don't need to sell, are pulling their homes off the market and renting them. And buyers are still looking for value and are making offers when they see a property priced right or even a little below current comps.
· North Bay—Greenbrae reports there are great new listings coming on the market so hopefully buyers are seeing properties that appeal to them and are taking advantage of less competition over the summer as well as relatively low interest rates to make them happen. San Rafael reports activity slowed down dramatically in the past week at open houses due to the holiday. Many buyers are writing more aggressive offers after losing out in the entry level price point in San Rafael. Petaluma reports buyers are out in force. The properties priced below $500,000 are still receiving multiple offers in the double digits. We are starting to see movement in the next level $500-$800,000. Inventory still is the challenge. Sebastopol reports every offer on properties under $300,000 is multiple (as many as 16 offers). The open house activity below $600,000 is very active; above that it slows down.
· Peninsula—Burlingame reports the holiday weekend saw fewer opens but the ones that were open reported fabulous attendance. One San Mateo listing held open on Saturday the 4th had over 35 groups through and even more on Sunday. Agents were showing property as well. Agents felt that although the opens were generally well attended there wasn't a lot of motivation present. Buyers are watching jobs, the stock market and economic reports which are not instilling confidence this week. At the same time however we are having our best month of sales for this year. Many of our current buyers have been working with their Agents for some a year or more. It has taken many of them a long time to decide on the timing of when to buy. Half Moon Bay reports a slow couple of weeks due to the 4th of July holiday and graduations. Activity under the $800,000 range is active with showings, anything over $1.1m is just sitting. Redwood City reports low inventory continues. Not much activity due to the beginning of the summer and the fourth. Still a lot of first time buyers in the market. San Mateo reports many multiples on the lower end especially in Daly City, So. San Francisco and San Bruno. Strong market if price is reasonable.
· San Francisco—Lakeside reports the market under $800,000 is very dynamic. The Lombard office reported a divided market, with about $800,000 the dividing line. $1.6-$2.2 especially slow, a prime buyer’s market. REOs very active with multiple offers, often all cash. Market Street reported Agents worked really hard just before the holiday putting deals together for excited buyers and anxious sellers. The holiday weekend did not see a lot of open houses but the ones that were held open had good traffic with qualified buyers coming through. One Agent commented that a sentiment with buyers is that they have to move now because they believe it will heat up in September and they want to get into a home before then. One property in district 5 received an over asking all cash offer after the open house and the sellers ratified it quickly.
· Santa Cruz County—June turned out better than many previous months with nearly 60 sales overall. The Santa Cruz office had 17 sales and the Agents are very busy on that side of town, where well priced properties near UCSC continue to be in high demand. There is a strong rental market there and the ocean properties are receiving a lot of activity in this area also. Capitola office closed an ocean front property last week at $5,125,000. While it was significantly less than the asking price, with a longer market time, it was the 2nd highest sale in the county for the year.
· Silicon Valley—Cupertino DeAnza reports we are seeing 15 to 20 offers on the low-end homes. One listing in Santa Clara (listed @ $550,000) got 17 offers and was bid up to over $600,000. Conversely we are seeing many sellers having to sell NOT "as is" in the less popular (i.e. higher) price ranges. San Jose Willow Glen reports we have slowed up a bit as far as the sales go but our listings have picked up. Our Agents are busy with buyers that are looking for the perfect house to meet their needs.
· South County—Gilroy reports the 4th of July week was very quiet. Agents representing banks are starting to see new listing assignments and an increase in BPO’s. Hopefully, this is a sign of more REO properties coming on the market. The shortage of entry level homes has caused multiple offer situations on all properties within FHA loan limits. Hollister reports we have several Agents that have buyers unable to get contracts accepted due to multiple offers or all cash offers on most REO listings. Communication is lacking on some of these transactions in this market. Floor calls have decreased due to the holiday weekend. Morgan Hill reports last month, the Morgan Hill Agents managed to post 52 sales on their office sales board. There isn't enough inventory to satisfy buyer demand in the $300,000 to $500,000 price range. These types of properties are selling quickly with multiple offers. Appraisals are becoming an issue—and some listing Agents are countering out the appraisal contingency all together.
Although it remains to be the lower-priced entry level that is driving the bus in all our geographic markets, I think it’s important to note that the current uncertainty in the financial markets is kicking up some activity in our high end properties. Our Greenbrae office reported a closed sale in Tiburon at $7.5M. Our Aptos office closed an oceanfront property in Santa Cruz over $5M. Both Santa Rosa and Sebastopol offices had several Previews properties going into contract the past two weeks. The areas noted have had longer standing inventory in the high end – Santa Cruz Co with a 26 MSI over $2M, Sonoma and Marin Counties with a 17 MSI over $2M. San Francisco is seeing some $3M to $5M activity nearly every week, although sales over $3M are about 30% fewer than this time last year. The contrast here is a 5 months supply of inventory over $2M. East Bay offices have seen a recent pick up in higher end sales; Livermore noted there are more high-end pending sales currently than the total number of closed sales at that price point in the last 6 months of 2008. Sporadic high end activity occurs in San Mateo and Santa Clara counties, where there is an average of 10 MSI for homes listed over $2M. We are seeing more contingent move-up sales now; where homeowners are taking advantage of softened prices on the move-up property, combined with today’s great interest rates. It won’t last forever!
Until next week,
Make it a great one,
Rick
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
Existing Home Sales Rise For Second Straight Month
The National Association of Realtors released its existing home sales report which noted that existing home sales rose for the second straight month in May, signaling low prices and incentives are attracting buyers.
NAR says existing home sales, including single family homes, condos and coops rose 2.4 percent in May. It was the first back-to-back monthly gain in existing home sales since September 2005.
NAR chief economist Lawrence Yun had this to say, “Historically low mortgage rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates. First time buyers are also being drawn off the sidelines by the $8,000 tax credit which is helping to absorb inventory.” The numbers could be even better if it weren’t for appraisal issues. While pending sales of existing homes—those with signed contracts but not yet closed—indicate stronger activity, some contracts are falling through from faulty valuations that keep buyers from getting a loan, said Yun.
We’re starting to experience more challenges with low appraisals here in the Bay Area, most often from out-of-area appraisers who have no experience and limited knowledge of local markets. The pendulum could be swinging a little too aggressively in some cases as regulatory controls meet market demand. You’ll find quite a few references to appraisal issues as you look through our activity for the last two weeks from our branches:
East Bay—The Berkeley office reported same old story. REOs are flying off the shelf with 15-24 offers and most are cash. In our core area, there are still not enough listings. Sellers are either waiting for some magical return to previous years, or concerned that their appropriately priced house won't appraise. Appraisals are the big bug-a-boo now for all parties. Buyers are torn between "shoot the moon" offers and whether their offer price will appraise. Listing Agents and sellers are wary of extravagant offers for the same reason. Short sales are popping up in more affluent neighborhoods. Our Castro Valley reports the market continues to improve for our local market. We have an active base of buyers and we continue to support them in the competitive market. We are continuing to see increased activity in the mid-range markets and we have even sold some of our oldest inventory. In fact, listings that fall out are quickly back into escrow, since there is no shortage of buyers for us. Our Livermore office reports in the Tri-Valley Area, active listings in Livermore are decreasing and total pending sales are increasing: active listings in Pleasanton had a small increase while total pending sales decreased; active listings in Dublin decreased and total pending sales remained stable. The overall market in the Tri-Valley area is improving. Walnut Creek reports listing inventory is increasing with more REO, short sale and regular listings. The Walnut Creek mid-priced listings, $500-700K are starting to move. Sales activity is good. Multiple offers on most listings under $500K and even some on the higher priced listings.
North Bay—San Rafael and Novato are still moving inventory. Relatively in the $500-$750k range. More REOs expected this summer. $1-$1.3M market strong in Corte Madera, Greenbrae and Mill Valley. In the past week we have seen an increase in sales activity in Novato with 28 homes and condos going into contract versus San Rafael with only 19. We continue to see buyers driving the prices up in the entry level market with multiple offers. One home listed @ $240k sold well over $300k in Novato this month. Our Santa Rosa office reports inventory continues to tighten with multiple offers being the rule rather than the exception. Price point is key as over priced listings can still sit with little or no activity. The Sebastopol office reports almost all REO and short sales are multiple offers. Lots of lookers at open houses over 30 groups on Father’s Day at a listing in the low $300,000s.
Peninsula—Our Burlingame office reports as hard and challenging as all the transactions are these days, there are sales being made and Agents are busy. We have had sales at every price point $200k to $4.5mil. The North County is seeing large numbers of multiple offers 10 to 20 per property, most all sales are REO or short sales. We have had a few appraisal challenges mostly the result of out of area appraisers unfamiliar with the neighborhoods and agents are doing their best to be proactive in meeting the appraiser and providing comps. Our Menlo Park El Camino office reports open houses were slow but we also had quite a bit less. Agents feel most buyers still have no “fire to buy” still waiting for the perfect house and the perfect price. Palo Alto reported everyone seems to be on vacation. Open houses have been quieter in the Palo Alto area. There is still good demand for well priced homes. The Woodside office reports the market feels a little slower. Open houses were not as active. Is it the interest rate movement or the summer doldrums? Inventories are still short on the best properties that buyers are looking for.
San Francisco—The Lakeside office reported the under $800,000 market is going crazy in San Francisco. There is a lot of over bidding and then complicated escrows, but a lot of activity. The Lombard office reported all deals were sol and under asking except with REOs which were all multiple and all over asking. But some over asking REO deals of late have had appraisal challenges and required adjustments. Lots of loan problems and delays of late; requires patience and cooperation from all sides. The Market Street office reported this week was one where buyers were flocking around certain houses driving up the price and garnering multiple offers. We lost out on a couple where 10 or more offers came in and our Agent wrote $75,000 over. Fortunately we had a couple of listings that benefited and received multiple offers after the first open house. The Noriega office reported sales activity is up. A lot of negotiations going back and forth. Financing is getting tighter with a lot of loan conditions. Marketing a listing used to be location, location location. Now it’s also price, price, price and affordability!
Santa Cruz County—The market is clicking along; we are having one of our better months in quite some time and will probably end up with 60 sides for the month. In the county, inventory levels are down about 21% from May of 2008, median price is down the same amount to approximately $450,000, while overall unit sales are up 23% reflecting the strong REO market.
Silicon Valley—The Cupertino Stevens Creek office reported listings have slowed down for our office, but we are strong with sale transactions coming in. The Los Altos office reported the market is active with low end REO getting multiple offers. Mid range homes need to be exceptional to draw offers. The high end continues to be slow. The Los Gatos office reports our mid-level properties are selling in Los Gatos (finally). Great energy in the open house arena-lots of buyers feeling that the bottom is passed. The San Jose Almaden office reported 53% pending in Blossom Valley with inventory shrinking. Only 96 homes were available in Blossom Valley. That is down from 200 just one year ago. Attractively priced homes in Almaden are selling fast. REOs continue to receive multiple offers. Our San Jose Main office reported open houses were absolutely crazy the past two weeks. One property in Almaden in the $875,000 range had over 200 visitors on Sunday alone! Most lower priced homes are selling with multiple offers, sometimes as many as 5 to 10 offers on each. Upper end properties are starting to see better activity.
South County—Gilroy reports a lack of inventory continues to cause a decrease in sales. Most properties are receiving multiple offers. Appraisals are now becoming a challenge due to lack of comparables. Hollister reports contracts are being presented with multiple offers the norm on most REO listings. Some listing Agents are not responding in a timely fashion adding to the frustration of the buyers and buyer Agents. Floor time has picked up with buyers ready to buy. Seeing other contracts besides the typical CAR or PRDS being used by some REO listing Agents. Morgan Hill reports Agents are looking for listings. The inventory is way down and our office inventory of listings (entry-level and moderately priced homes) is also down. Properties listed over one million dollars, however, continue to languish on the market—but those priced under $600,000 are selling briskly.
One potential challenge that may begin affecting our market is the rise in interest rates. I recently came across this CNNMoney.com article which offers a good look at interest rates and inflation: http://money.cnn.com/2009/06/19/news/economy/higher_inflation.fortune/index.htm. Currently, today’s historic low interest rates are the major driver of the recovery we’ve seen so far. Housing affordability, better than it’s been in California in over a dozen years, is a balancing act of lowered pricing and attractive interest rates. If higher interest rates take more buyers out of the market, we can expect longer standing inventory and further price declines.
I recently sat down with our partners at Princeton Capital to discuss what strategies the Fed and Treasury may have in store for interest rates as inflation concerns become more real. Our discussion will be found in your upcoming July edition of Reality Check, which we’ll distribute after the July 4th weekend.
In the meanwhile-.
Have a great week!
Rick
Rick Turley
President
Coldwell Banker Residential Brokerage San Francisco Bay Area
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
The National Association of Realtors released its existing home sales report which noted that existing home sales rose for the second straight month in May, signaling low prices and incentives are attracting buyers.
NAR says existing home sales, including single family homes, condos and coops rose 2.4 percent in May. It was the first back-to-back monthly gain in existing home sales since September 2005.
NAR chief economist Lawrence Yun had this to say, “Historically low mortgage rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates. First time buyers are also being drawn off the sidelines by the $8,000 tax credit which is helping to absorb inventory.” The numbers could be even better if it weren’t for appraisal issues. While pending sales of existing homes—those with signed contracts but not yet closed—indicate stronger activity, some contracts are falling through from faulty valuations that keep buyers from getting a loan, said Yun.
We’re starting to experience more challenges with low appraisals here in the Bay Area, most often from out-of-area appraisers who have no experience and limited knowledge of local markets. The pendulum could be swinging a little too aggressively in some cases as regulatory controls meet market demand. You’ll find quite a few references to appraisal issues as you look through our activity for the last two weeks from our branches:
East Bay—The Berkeley office reported same old story. REOs are flying off the shelf with 15-24 offers and most are cash. In our core area, there are still not enough listings. Sellers are either waiting for some magical return to previous years, or concerned that their appropriately priced house won't appraise. Appraisals are the big bug-a-boo now for all parties. Buyers are torn between "shoot the moon" offers and whether their offer price will appraise. Listing Agents and sellers are wary of extravagant offers for the same reason. Short sales are popping up in more affluent neighborhoods. Our Castro Valley reports the market continues to improve for our local market. We have an active base of buyers and we continue to support them in the competitive market. We are continuing to see increased activity in the mid-range markets and we have even sold some of our oldest inventory. In fact, listings that fall out are quickly back into escrow, since there is no shortage of buyers for us. Our Livermore office reports in the Tri-Valley Area, active listings in Livermore are decreasing and total pending sales are increasing: active listings in Pleasanton had a small increase while total pending sales decreased; active listings in Dublin decreased and total pending sales remained stable. The overall market in the Tri-Valley area is improving. Walnut Creek reports listing inventory is increasing with more REO, short sale and regular listings. The Walnut Creek mid-priced listings, $500-700K are starting to move. Sales activity is good. Multiple offers on most listings under $500K and even some on the higher priced listings.
North Bay—San Rafael and Novato are still moving inventory. Relatively in the $500-$750k range. More REOs expected this summer. $1-$1.3M market strong in Corte Madera, Greenbrae and Mill Valley. In the past week we have seen an increase in sales activity in Novato with 28 homes and condos going into contract versus San Rafael with only 19. We continue to see buyers driving the prices up in the entry level market with multiple offers. One home listed @ $240k sold well over $300k in Novato this month. Our Santa Rosa office reports inventory continues to tighten with multiple offers being the rule rather than the exception. Price point is key as over priced listings can still sit with little or no activity. The Sebastopol office reports almost all REO and short sales are multiple offers. Lots of lookers at open houses over 30 groups on Father’s Day at a listing in the low $300,000s.
Peninsula—Our Burlingame office reports as hard and challenging as all the transactions are these days, there are sales being made and Agents are busy. We have had sales at every price point $200k to $4.5mil. The North County is seeing large numbers of multiple offers 10 to 20 per property, most all sales are REO or short sales. We have had a few appraisal challenges mostly the result of out of area appraisers unfamiliar with the neighborhoods and agents are doing their best to be proactive in meeting the appraiser and providing comps. Our Menlo Park El Camino office reports open houses were slow but we also had quite a bit less. Agents feel most buyers still have no “fire to buy” still waiting for the perfect house and the perfect price. Palo Alto reported everyone seems to be on vacation. Open houses have been quieter in the Palo Alto area. There is still good demand for well priced homes. The Woodside office reports the market feels a little slower. Open houses were not as active. Is it the interest rate movement or the summer doldrums? Inventories are still short on the best properties that buyers are looking for.
San Francisco—The Lakeside office reported the under $800,000 market is going crazy in San Francisco. There is a lot of over bidding and then complicated escrows, but a lot of activity. The Lombard office reported all deals were sol and under asking except with REOs which were all multiple and all over asking. But some over asking REO deals of late have had appraisal challenges and required adjustments. Lots of loan problems and delays of late; requires patience and cooperation from all sides. The Market Street office reported this week was one where buyers were flocking around certain houses driving up the price and garnering multiple offers. We lost out on a couple where 10 or more offers came in and our Agent wrote $75,000 over. Fortunately we had a couple of listings that benefited and received multiple offers after the first open house. The Noriega office reported sales activity is up. A lot of negotiations going back and forth. Financing is getting tighter with a lot of loan conditions. Marketing a listing used to be location, location location. Now it’s also price, price, price and affordability!
Santa Cruz County—The market is clicking along; we are having one of our better months in quite some time and will probably end up with 60 sides for the month. In the county, inventory levels are down about 21% from May of 2008, median price is down the same amount to approximately $450,000, while overall unit sales are up 23% reflecting the strong REO market.
Silicon Valley—The Cupertino Stevens Creek office reported listings have slowed down for our office, but we are strong with sale transactions coming in. The Los Altos office reported the market is active with low end REO getting multiple offers. Mid range homes need to be exceptional to draw offers. The high end continues to be slow. The Los Gatos office reports our mid-level properties are selling in Los Gatos (finally). Great energy in the open house arena-lots of buyers feeling that the bottom is passed. The San Jose Almaden office reported 53% pending in Blossom Valley with inventory shrinking. Only 96 homes were available in Blossom Valley. That is down from 200 just one year ago. Attractively priced homes in Almaden are selling fast. REOs continue to receive multiple offers. Our San Jose Main office reported open houses were absolutely crazy the past two weeks. One property in Almaden in the $875,000 range had over 200 visitors on Sunday alone! Most lower priced homes are selling with multiple offers, sometimes as many as 5 to 10 offers on each. Upper end properties are starting to see better activity.
South County—Gilroy reports a lack of inventory continues to cause a decrease in sales. Most properties are receiving multiple offers. Appraisals are now becoming a challenge due to lack of comparables. Hollister reports contracts are being presented with multiple offers the norm on most REO listings. Some listing Agents are not responding in a timely fashion adding to the frustration of the buyers and buyer Agents. Floor time has picked up with buyers ready to buy. Seeing other contracts besides the typical CAR or PRDS being used by some REO listing Agents. Morgan Hill reports Agents are looking for listings. The inventory is way down and our office inventory of listings (entry-level and moderately priced homes) is also down. Properties listed over one million dollars, however, continue to languish on the market—but those priced under $600,000 are selling briskly.
One potential challenge that may begin affecting our market is the rise in interest rates. I recently came across this CNNMoney.com article which offers a good look at interest rates and inflation: http://money.cnn.com/2009/06/19/news/economy/higher_inflation.fortune/index.htm. Currently, today’s historic low interest rates are the major driver of the recovery we’ve seen so far. Housing affordability, better than it’s been in California in over a dozen years, is a balancing act of lowered pricing and attractive interest rates. If higher interest rates take more buyers out of the market, we can expect longer standing inventory and further price declines.
I recently sat down with our partners at Princeton Capital to discuss what strategies the Fed and Treasury may have in store for interest rates as inflation concerns become more real. Our discussion will be found in your upcoming July edition of Reality Check, which we’ll distribute after the July 4th weekend.
In the meanwhile-.
Have a great week!
Rick
Rick Turley
President
Coldwell Banker Residential Brokerage San Francisco Bay Area
Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
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