Market Update

Please note -this is for the week prior to the Memorial Day holiday – I missed the week before that, and we’ll be back on track first of next week. Notice how the outlying areas which have been hit the hardest – have the most activity lately – a good sign for the overall “healing” which needs to take place in the industry.

Weekly Market Watch

Week of May 12-18

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

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

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

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

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

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

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

Next week I will release my June Reality Check challenge. In it, I focus heavily on some of the trends we are seeing in today’s market and I will provide you with a tool that you may use to communicate these trends to your clients.

Until then, I wish you a productive and successful week. Keep your energy up and continue to educate your clients on the trends in today’s market. The momentum we are seeing today may be the beginning of a market turnaround and your fence- sitting buyers need to be informed so they may act now, before it is too late.

Rick

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

Bay Area Update

Week of
April 21-27

Earlier this week, Richard Smith, Chief Executive Officer for Realogy, released a video statement regarding the state of the national housing market. In it, he noted, “Like all downturns, this too shall pass. It’s not a matter of if, but when.”

Shortly thereafter I read several market updates including two notable reports from Freddie Mac and NAR. Both are predicting that the market will stabilize in latter months of 2008, with housing recovery and sustained growth expected in 2009.

So what does that mean for our clients now? Opportunity is knocking. Though none of us holds a crystal ball, if both of these respected sources are correct in their predictions, now may be what we look back upon a year from now and say was the official bottom of our market. Buyers need to be aware of this fact and need to take advantage of today’s attractive interest rates, and increased jumbo loan limits. In a broader regional sense, specifically in the average-and-under price points, Buyers have more choices, lower prices, and motivated Sellers to negotiate with. Conversely, most local Buyers in our over $1M high demand areas of the Peninsula and San Francisco are having trouble finding enough new listings to meet demand. This notable dichotomy suggests that if the statewide and national indicators point to “hitting bottom” soon, then certainly it won’t mean an increase of inventory coming to market at lower prices in these desirable $1M+ communities.

Some East Bay offices report a flurry of activity and note that though some deals are falling out, they are replaced by fresh offers that same day. Our Oakland office recently listed an expired from another broker which received three offers following our first open house. The listing went for well over the asking price. Santa Rosa is noting that floor calls are way up and that the low to middle market continues to be where the action is.

On the Peninsula we are finding that, though inventory of quality listings remains a challenge, we are seeing a surge of buyers coming into the marketplace. To further illustrate the dichotomy mentioned earlier, Burlingame notes an example where Buyers have taken a wait-and-see approach to a new listing, then all of a sudden -six offers. Our Menlo Park office notes that buyers are moving forward cautiously in buying and may not be willing to get into multiple offer situations. That said, however, one Palo Alto listing offered at $1,985,000 recently received eight offers and went well over asking. Our Palo Alto office is also noting an all time low in inventory with about 80% of offers going into multiples. It all comes down to neighborhood, pricing, and the important economic formula of supply and demand.

San Francisco remains a bit of an anomaly with pockets that are strong and those that remain challenged due to lack of quality inventory. Our Van Ness and Lombard offices report that the luxury market remains strong. The entry level and mid-level markets seem to be getting the hardest hit by the lack of quality inventory, though open house activity seems to remain steady which shows there is buyer interest.

In closing, I’d like to remind you that in this market, real estate consumers need your professional counsel. The long term prospects for real estate are very bright and we need to remind our clients of this fact.

Have a great week!
Rick

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

Market Update

Weekly Market Watch
Week of April 14

Here’s the headline: The number of sales reported in San Francisco and Peninsula MLS’s continues to drop. Here’s the rest of the story: The new pending sales each month are dropping in an almost parallel fashion relating to the number of new listings coming to market. Please be sure your Buyers and Sellers understand this. For the most part in nearly every SF and Peninsula community, Median Sales Price is continuing to grow, albeit a slower rate. With new sales tracking new inventory rates, prices remaining stable to increasing, and interest rates extremely attractive – Buyers who hesitate will likely find fewer choices at higher prices.

Based on what we’re seeing in our local offices, April is shaping up to be one of our busiest months in at least a year. After a relatively slow first quarter, here is what we’re seeing in the market today:

- Busy Open Houses: In fact our Berkeley office reported 80 visitors to one Berkeley listing and 70 visitors to one Kensington listing. Berkeley manager noted, “All hosting Agents reported that the buyers were focused, enthused and most of them were just starting out in the home buying process.” San Francisco Market Street reports that several open houses had more than 100 people through over the weekend. Throughout the Peninsula open houses were reported as being robust and well-attended.

- Increase in Pending Sales: The Tri-Valley reports that pending sales are up 35%. SF Lombard reported increased activity in pendings. Woodside, Palo Alto and Menlo Park offices also had a bigger week of new sales.

- Inventory is Stabilizing or Decreasing: Out of 27 responding offices, 13 offices reported steady inventory while four reported decreasing inventory levels, leaving just 10 markets, largely in the North Bay, East Bay and in parts of San Francisco, with an increase in inventory. This trend, can be construed as a double edge sword. Though stabilizing or decreased inventory continues to build pent-up demand, one major issue in our market is the lack of good, solid listings that buyers will act on. Let’s hope that as the weeks play out, we see a better influx of good listings.

- Increase in Multiple Offers: The trend of multiple offers is continuing to prove demand outweighs supply for prime properties in sought-after neighborhoods. Some of the most prominent areas enjoying the benefits of multiple offers are: San Francisco, reporting 15 multiple offers last week; Menlo Park with six multiple offers, one of which received 10 offers; Palo Alto with four multiple offers; and several parts of our more affordable, outlying areas like Santa Rosa, with eight offers.

One challenge several of our markets are facing right now is an increase in cancelled contracts. This is largely due to financing challenges, buyer’s uncertainty, and in the case of REOs and Short Sales, difficulty in negotiating and length of time the process takes. While there can be value in REOs and bank-owned properties, buyers do need to be made aware of the pitfalls and challenges they will be facing when negotiating prior to making offers. Whether a property is bank-owned or not, be sure to have your Princeton loan officer update your Buyer’s loan approval, and get a realistic expectation of the proper loan contingency removal period. Our Princeton loan officers have also been great at helping Listing Agents evaluate offers coming in on our listings.

Have a great week,

Rick

Rick Turley
President, San Francisco/Peninsula

Market Update

Coldwell Banker Weekly Market Watch
April 7-13

I read with interest this week an article entitled “Real Estate Agents Say Worst Has Past.”

The article reinforced much of what I’ve been saying over the last few weeks: while the first quarter data says “no end in sight,” we are beginning to see major strides within the real estate market in harder-hit areas across the country.

In fact, in the areas that were hardest hit over the last two years (i.e. parts of the East Bay and in Sonoma County), we are seeing a lot more activity, largely in part due to the increase in REOs. In fact, Castro Valley this week is reporting that offers are becoming increasingly competitive and multiple offers are once again on the rise. Nearby Walnut Creek reports that REO listings in Pittsburg and Antioch are getting multiple offers and our North Bay neighbor Petaluma reports that multiple offers are becoming the norm with the office reporting six multiple offers this week alone. As you’ve heard me say in recent sales meetings, I am anxious to see the outlying markets have success, as they need to see increased sales activity before our local “fence-sitters” will gain more confidence.

All but two offices report increasing or steady activity, with nine offices noting a healthy increase. In fact, Silicon Valley reported this week the highest amount of sales of condos and townhouses since June 2007. And even more impressive is that they saw the most single family home sales since the first week of August 2005.

In our more affluent markets like San Mateo County, San Francisco and Marin, we are definitely seeing a strong shift in activity. Listings in prime Westside in Burlingame and San Mateo are still in demand and are selling quickly in the $1.7 million plus category. Our Van Ness office reports a fluency in the $2 million plus range. Possibly the biggest challenge for these markets continues to be a lack of inventory. San Mateo County and San Francisco are still in dire need of good, well-showing properties that will attract more buyers. The buyers are out there – they are just waiting for that perfect home.

In this market, our best negotiating power is to stay competitive. We need to be able to articulate to our buyers why, if they’ve found the house they want, they probably shouldn’t wait. Remember that script I shared with you in the April edition of Reality Check? Now would be a good time to go back and revisit it as a way of educating yourself on how to address concerns with buyers. There are many buyers out there right now who are ready to act but are weary – believing the media hype that prices will go down. We need to explain to these buyers the potential impact of waiting, including the probability of increased interest rates, increased competition and the ultimate sacrifice, losing a house that they love.

My message to sellers is the same: remain competitive. Many buyers are looking for the perfect combination of value and livability. If the home doesn’t show well from the beginning, a large portion of buyers will move on to the next one that does. I’ll close with a quote from the above-mentioned article:

“…Among those drawn by the lower prices and mortgage rates are Kristen Werner, a 30-year old attorney for an insurance company, and her 32-year-old husband James, who said they are now looking seriously for their first home after a lull of several years. A pre-approved mortgage and the fact that they don’t have a home to sell should smooth the process, and the volume of unsold homes where they are looking — on Long Island, in the New York suburbs — means they are more likely to find a house they want. But, in a caution for sellers, the Werners are coming in with expectations of a bargain.

“We need something that’s in move-in condition — I’m not Martha Stewart and my husband’s not Bob Vila,” Kristen Werner said.”

Have a great week!

Rick

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

Real Estate is Local

Coldwell Banker Weekly Market Watch

Week of March 31, 2008

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

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

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

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

Have a great week!

Rick

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

The Investors Return

Coldwell Banker Weekly Market Watch
Week of March 16, 2008

Gold prices are dropping. Oil prices are dropping. Mortgage rates are dropping! For the first time since January, the rate for a 30-year fixed mortgage hit 5.75%. Reports this week also indicated that foreclosure rates statewide dropped in February for the first time since last summer. The Feds slashed short term lending rates again, and Fannie Mae and Freddie Mac were given the green light to pour an additional $200 billion dollars into mortgage loans. That, combined with the temporary increase in conforming loan limits for Fannie, Freddie and the FHA, is all good news for fast acting buyers and smart sellers. One other bright spot – our offices are reporting that investors are starting to come back into the market and most economists agree that the return of investor purchasing is an early indicator of a market that is ready to bounce back.

The hot-and-cold-running microclimates of the past months have apparently started to temper. Of the offices reporting, an overwhelming majority of them indicate that sales activity is increasing or steady. Buyers are still cautious – ensuring that they are getting a value – but they are buying, and doing so competitively considering the number of multiple offer situations that occurred last week. A new listing in San Ramon had 16 offers and looks to close at approximately $100,000 over asking. A Rockridge home listed in the $700,000 range had 17 offers and sold for $135,000 over the asking price. The Petaluma office was involved in 12 different multiple offer situations. Pleasanton, Santa Rosa, Walnut Creek, Sebastopol, San Carlos and San Francisco all reported an increase in multiple offer situations. Much of the influx in multiple offers are on homes with entry-level price ranges and REO properties due to the bargain factor, but many others are simply well-priced and well-staged and in desirable neighborhoods – these are homes that show their value well. In fact, according to San Francisco office reports, at least half of the ratified offers are multiple in all price points.

Our more than 500 open houses continued to be incredibly well attended in virtually every market. We can assume that, as always, lookie-loo’s account for a portion of the visiting numbers, but a large majority of the open house attendees are serious, qualified buyers. Open homes in attractive Berkeley neighborhoods are receiving 50 to 80 visitors. A Rockridge listing had more than 100 groups go through. San Francisco and Peninsula open homes are very well attended. It’s becoming more common to see Open House signs out on Thursday evenings again.

As the Month’s Supply of Inventory seems to be holding steady, even dropping in some communities, it may be the perfect time for the move-up Buyer to list their home. With interest rates being very favorable, and fewer multiple offers on the move-up home than we’ve seen in years, this may be the opportunity they’ve been waiting for.

Have a great week!

Rick

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

The “Current” Market

Weekly Market Watch

Week of March 9, 2008

DataQuick, the real estate information service that the media drools over every month, issued yet another gloomy report on Thursday. Frankly, I think the reports received from our offices each week, and from talking to all of those hardworking Coldwell Banker Sales Associates in the field, should be what’s making the headlines in our newspapers instead of DataQuick’s latest monthly statistics. We are actually working with buyers and sellers and understand our local markets. We comprehend the intricacies of the various communities and neighborhoods we work with, and we actually know what’s happening out there. Quite simply, they don’t know what we know about the market TODAY. They can only report on what closed last month based on transactions that began 30 to 90 days prior. We need to continue to remind our buyers and our sellers that what they see in the newspaper today is a reflection of the recent past – not necessarily a snapshot of the current market. Yes – it’s been a challenging market overall as of late, but we see definite signs of improvement now that just aren’t reported anywhere else.

Here’s something current that I haven’t read about – we’re seeing a drop in month’s supply of inventory in virtually every county in our area. We’re seeing an increasing number of homes going into contract. We’re seeing open houses in most areas that continue to teem with buyers anxious to take advantage of the low rates and plentiful selection. We’re seeing a boost in the number of first-time buyers who don’t have to sell an existing home in order to make their purchase. We’re seeing high-end homes selling off-market – meaning that they sell without ever hitting the MLS – often with multiple offers and well over the asking price, (this also means that DataQuick won’t account for those homes in its statistics for sales and median prices next month).

In Petaluma, six different open houses received more than 30 attending groups apiece. Pleasanton and Fremont have begun offering Bank Owned Property Tours and they are being met with huge success. Open house attendance is up for the third consecutive week in Santa Rosa and Sebastopol. In Pleasant Hill a broker’s open that was supposed to close at 2:30pm stayed open until 7pm in order to accommodate the vast amount of walk-in traffic. A Noe Valley listing had over 100 groups pass through it.

A Portola Valley home listed at $2.5 million had more than 100 groups through its open house and sold with three offers. 80% of Menlo Park sales were multiple offers. In San Francisco a fixer in Hayes Valley sold for 20% over asking and multiple offer situations are once again becoming the norm for many properties. The Market Street office notes busy opens on Sundays and on Thursday nights, and that homes that have been on the market for months are selling now.

Clearly, our government is taking the essential steps to allow the markets to recover in a way that stimulates the economy, keeps interest rates affordable, and helps buyers, sellers and investors alike. And again, we see the beginnings of the positive aspects in our San Francisco Bay Area markets on a daily basis. Our continued optimism is grounded in what we see today, and in the eager eyes of our buyers and sellers.

Have a great week!

Rick

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

Conforming Loan Limits

Coldwell Banker Weekly Market Watch

Week ending March 2, 2008

It’s official. The Department of Housing and Urban Development has released the amounts of increases in the conforming loan limit for FHA, Fannie Mae and Freddie Mac secured loans. This is great news for Bay Area homeowners, home buyers and home sellers alike. For homeowners, the increase may allow them to refinance their existing “jumbo” loans at a lower rate of interest. For buyers, it may make getting a loan much easier and cheaper. For sellers, it ought to spur fence-sitting buyers to take more immediate action and start writing offers on all those open houses they’ve been flocking to for the past weeks. Though there is a possibility that the increases will be permanent pending new legislation, for now the conforming loan limit increases are only confirmed through the end of 2008. Buyers have a distinct time-frame through which to take advantage of this opportunity. Move-up buyers and first time buyers both have a terrific break right now to find the home of their dreams.

The new increased limits (up to 125% of an area’s median home price) impact practically all of our Bay Area Counties. Alameda, Contra Costa, Marin, San Francisco and San Mateo all qualify for FHA, Fannie and Freddie increases up to the cap of $729,750. Sonoma County’s FHA conforming loan limit increases up to $662,500, and for Solano, the increase is up to $557,500.

We aren’t certain when new loan products will actually hit the market and become available, but it shouldn’t take long. Lenders have to be pre-approved to offer FHA loans, so it’s more important than ever for buyers to be working with skilled real estate professionals who have the connections and resources necessary to make recommendations and guide their clients toward reputable, pre-approved lenders. Our Princeton loan officers are doing a great job keeping us abreast of new opportunities.

Open houses continue to be massively successful in most of our Bay Area markets – another sign that we may be seeing a sea change in buyer confidence regarding Bay Area real estate. Listings in Berkeley and El Cerrito ranging in price between $659,000 and $1.4 million saw between 65 and 100 groups attending the open houses. In Fremont, where REO’s continue to be a large percentage of the market, open homes were receiving up to 120 visitors. A new Hillsborough listing saw more than 50 groups. In Redwood City, attendance was “incredible,” and in San Mateo, activity was great at the open houses and “on paper.”

Greenbrae notes more multiple offers and buyers activity, and in Santa Rosa buyers have already jumped off that fence – their office is “busy, busy, busy.” On the Peninsula, with the exception of Palo Alto with inventory at an all time low, we’re starting to see an up tick in the availability of saleable homes in a wider variety of locations and price ranges – this is bringing potential buyers out in large numbers when price, location and condition are in alignment. In San Francisco, a mixed-use listing in the Sunset district generated 21 offers. MLS Inventory stats in the City show stable inventory, however our 5 offices reported 30 new listings this week. We’ll gladly take them, as activity is brisk.

All in all, good news this week for us in San Francisco and on the Peninsula. Nationally, new reports came out including employment figures which had our financial markets in dismay. While we have to be ever cognizant of the state of our national economy, it’s important to keep your daily focus on the pulse of your local real estate market. This is the critical information our customers need to make good financial decisions regarding housing. I sent you all a special edition of Reality Check materials this week that will help you to educate your buyers and sellers about the impact that the increase in the conforming loan limits could have on them. Take advantage of these terrific tools, and have a great week.

Rick

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

Consumer Confidence Increases?

Coldwell Banker Weekly Market Watch

Week ending February 24, 2008

While listening to the radio the other day, I heard a news report stating that consumer confidence has plummeted in February to a 17-year low. The reporter went on to discuss how fears about the housing market and its impact on the economy are major factors in the increasing pessimism of the American consumer. Later, however, I found the actual consumer confidence index report online and, upon reading it, discovered this little nugget: Those with plans to buy a home rose in February from 2.5% to 2.7%. It was actually one of the few areas of the report that had improved month over month. I’m still trying to figure out how that news reporter wound up blaming the country’s real estate market for a decline in consumer confidence when the index clearly states that confidence in home buying is improving. The index also notes that consumers with plans to buy major appliances increased from 30.6% to 30.9% – maybe those new appliances will be installed in their new homes?

During a rainy holiday weekend, it became apparent that there are an increasing number of buyers who are getting serious about hopping off the fence. Though many seem to be waiting for the conforming loan limit increase in the economic stimulus package to take effect, there are also many who are taking advantage of the affordability existing in many of our markets right now. Buyers that are waiting to see a bottom would be best served by jumping in now. Typically, by the time we can see a bottom in the charts we are well past it and on the way back up. In areas with higher levels of inventory, price, condition and location continue to be crucial factors in home sales at virtually every price point. When those elements are balanced, we are seeing multiple offers. We are also starting to see inventory levels stabilizing in many areas – Danville being a case in point where inventory remain unchanged week over week, but new pending sales increased by 67%!

Open houses continued to sizzle with activity in most of our market areas. Buyers are “out everywhere” in Castro Valley. Petaluma reports its third straight week of double digit attendance at open houses, and multiple offers on well-priced homes. Santa Rosa also saw open houses with 20 groups or more. A new Burlingame Hills listing received more than 80 groups of visitors, and in Portola Valley, the listing agent stopped counting after 70 groups had already passed through the property.

San Francisco and the Peninsula markets continue to suffer from a lack of saleable inventory – and that has a greater impact on sales declines than much of what the news headlines report. There are still fewer than 40 active listings on the MLS in Palo Alto. In San Francisco, a listing in the $1.4 million range sold preemptively for 20% over asking. Redwood City – San Carlos reports incredible attendance at open houses and notes that more than 50% of homes sold had been on the market for fewer than ten days.

Keep the current market – and how it’s being reported in the news – in perspective, and be the voice of reason for your buyers and sellers.

It was wonderful seeing so many of you this morning at the kickoff have a great week!

Rick

Rick Turley

President, San Francisco/Peninsula

Coldwell Banker Residential Brokerage

Nuggets of Positivism

Coldwell Banker Weekly Market Watch

Week ending February 10, 2008

It has been a big week for real estate news. The National Association of Realtors, DataQuick Information Services, Standard & Poor Case/Schiller, the Mortgage Bankers Association, and even Zillow.com, among several others, bombarded us with indexes, surveys, lists and reports. Filtered through the media, the headlines were, of course, mostly negative – but there were nuggets of positivism in many of the articles. You just had to mine deep within the articles to find them. Lawrence Yun, Chief Economist for the N.A.R. expressed it best by saying, “Those pessimistic thoughts are being driven by media outlets that tend to cherry pick data and experts to perpetuate the story that the economy is heading into recession.” He also stressed that, despite the value of national housing data, all real estate is local and consumers should base their decisions on local trends.

The biggest positive news nugget was that President Bush signed the economic stimulus package into law. One component of the package includes a temporary (through December of this year) increase in the conforming loan limit set by Fannie Mae, Freddie Mac and the FHA. The change increases the limit from $417,000 up to as much as $729,950 based on the median price of a given metropolitan area and local market. This is a great bonus to buyers in the greater Bay Area where our median price maxes out the new limit easily in many areas.

The anticipation of this truly necessary change in the conforming loan limits is, I believe, what has spurred so many buyers to be out looking at our more than 460 open houses with such gusto. Every single office reported successful opens this week. People were “out in droves” in Castro Valley. 85 groups visited a new Berkeley Hills listing. One Petaluma home had 26 buyers through it, while another on the east side of town saw 70 groups. In Menlo Park, open houses were “almost booming”, and they were “terrific” in Woodside/Portola Valley.

The savviest buyers are already enjoying the selection and pricing in the market and are buying homes in a wide variety of price points, and making their buying decisions quickly when they find that right property. A Castro Valley home was listed at $1.15 million and received offers within days of going on the market. Pleasanton, Dublin and Livermore all saw an increase in pending sales. Three different new listings out of the Walnut Creek office sold in less than one week. Burlingame is still seeing high end properties moving quickly and with multiple offers, and many sales continue to occur in the area privately, before a property is even brought onto the market. Half Moon Bay capped off a busy weekend by seeing two homes sell within hours of being listed.

All of this activity and the positive news out of Washington D.C. indicate that our optimism is not unfounded.

Have a great week.

Rick