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

Broadway Towers Corner Unit

1998 Broadway #605

This contemporary remodeled two bedroom, two and a half bath residence is located in the highly coveted Broadway Towers. Featuring gleaming hardwood floors throughout and floor to ceiling windows in every room, this luxurious residence has been completely remodeled. Originally designed as a three bedroom residence, the living area has been expanded to a bright and open great room that is perfect for entertaining. With close to 1400 square feet (tax record) of living space, this home is incredibly, uniquely quiet and provides the perfect urban refuge. Located on the coveted northeast corner, this home receives pouring sunlight and offers unique views of Russian Hill and Cow Hollow and a partial view of the GG Bridge. The remodeled galley kitchen flows perfectly into the living and dining areas for enhanced views and elegant entertainment. The kitchen is complete with granite counters, stainless steel appliances and a convection oven. The wrap-around patio may be accessed from the living area and both bedrooms. Deeded premium parking and storage complete this wonderful home. The perfect Pacific Heights Location, this home is near great shopping and dining on Union, Fillmore and Polk Streets.

Broadway Towers is a full-service building with doorman service and on-site management. HOA dues of $920 per month include cable, heat, water, earthquake insurance, building insurance and fully funded reserves. The expansive common roof deck provides panoramic views and is great for viewing local events.

Offered at $1,249,000 1998Broadway.com

Spacious Noe Valley Living

279 27th Street

Welcome home to this gorgeous 2-level Marina style flat in a 2 unit building. The home has been completely renovated blending stylish finishes with original sophisticated architecture. The large living room features barrel front windows, built-in bookcases & a wood-burning brick fireplace. The spacious formal dining room leads to a fabulous remodeled eat-in kitchen with honed black granite, stainless appliances & limestone flooring. 3 spacious bedrooms & 2 remodeled baths, including a lower level master suite with doors to a large Zen garden & patio. High ceilings, hardwood floors, laundry and 2 car tandem parking finish this home perfectly.

Offered at $1,299,000 279-27thStreet.com

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

Noe Valley Victorian Condominium

2 Bedroom, 2 Bath Victorian Condominium in Noe Valley

1024 Sanchez

You will fall in love with this remodeled Victorian Condominium from the very moment you enter. Built in 1848 this home has been immaculately maintained. Beautiful hardwood floors run throughout this full-floor flat in the heart of Noe Valley. The spacious living room receives warm sunlight throughout the day and is perfect for relaxation and entertaining. The formal dining room is complemented with period details and decorative fireplace. The home features two spacious bedrooms and two full bathrooms. The gourmet, eat-in kitchen enjoys access to a private deck and office / sunroom. The rear deck leads to a landscaped shared yard. In-home laundry, abundant storage and one car parking complete this home perfectly. This is your quintessential San Francisco home.

Conveniently located on a quiet street just 1 block from Noe Valley’s 24th Street shopping, dining and entertainment. Easy access to MUNI, BART and freeways.

Mission District Victorian Condominium

2 Bedroom 1 Bath, Flexible floorplan with original details.

3265-20thStreet.com

You will fall in love with this full floor Victorian Inner Mission flat. Victorian architecture throughout includes high ceilings, bay windows, period wood trim, baseboards and mouldings. There are two fireplaces both with tile mantels. The bathroom is a modern white tile bath with large claw foot tub. The home has been freshly painted throughout. There is a fully functioning pocket door separating the two bedrooms making this a truly remarkable and flexible five room floor plan. You can use the home as two bedrooms with a large eat-in kitchen -or- a spacious one bedroom home with formal dining room. Deeded parking, utility room with laundry hook-ups, shared common patio / garden and abundant storage finish this home perfectly. This home is the lower level of a quiet 2 unit building which has recently completed the condominium conversion process.
The perfect Inner Mission location – this home is blocks away from Universal Cafe, Cafe Gratitude, Slow Club, Blowfish Sushi, Atlas Cafe, El Matate and much more. Convenient to BART, MUNI, the 80, 101 and 280. Shopping, Dining, Nightlife, Transportation – this home has it all

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