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Real Estate Market Update as of 8/16/07
Bay Area median sales price edged up to a new peak of
$660,000 recently according to DataQuick Information
Systems. What we weren’t told is why median price is up
in a predominantly buyer’s market? Therein lies the
problem with a "median price” focus. It’s just not a
good (accurate) measurement of short term price movement
in housing. The median price is easily skewed up or down
when a disproportionate volume of high end or low end
homes sell in a given month. Currently, entry level
housing is not moving well, largely because banks are
tightening qualifying standards due to the sub-prime
meltdown. So when the median price (middle point of
reported sales) is reported it reflects the lack of
lower end sales and skews the mid point higher. No, the
average home is not appreciating, contrary to the median
price advance. Bay area homes are selling at their
slowest pace in 12 years and sales are down by about 18%
from this time last year. However, not all sub-markets
are behaving the same. In cities like Pleasanton and
Fremont the ratio of available listings to pending
sales is a relatively healthy ratio of 3.6 available to
every 1 pending sale. A not so tight, but still healthy
market exists in San Ramon where there is 3.9 available
listings for every 1 sale. Livermore represents a market
with more generous selection with a ratio of 5.2
available listings for every 1 sale. Notwithstanding,
our most recent South Livermore sale attracted 2 offers
within a few days of going on market. Our most recent
buyer contract was the lowest of 3 submitted on the same
property. And, yes the Peninsula continues to attract
multiple offers. One home generated 26 offers in Palo
Alto!
I have always been impressed (and relieved) to see how
consistent many real estate investors deal with the
changing real estate landscape. Even though it is fairly
obvious that we are in the “bumpy bottom” in the Bay
Area market,, the “old timers” continue to prudently
acquire real estate and invest in real estate funds. Yes
the current short term market is a bit nerve racking.
HOWEVER, it is my continued belief that Bay Area real
estate is a very solid long term bet. I’ve been in real
estate my entire working like starting as an appraiser
in the 70s and my only regret is that I hesitated to buy
in uncertain markets. Please don’t hesitate to call
anytime you have questions on the market, your
property’s value or where's the best place to invest.
Larry 925 216-5869.
Real Estate Market Update as of 7/1/07
While the number of home listings in a given market is a
strong indicator or the health of the market....the
percentage of pending listings is even more significant.
In the East Bay market we have a "Tale of Many Cities".
In cities like Pleasanton and Fremont the ratio of
available listings to pending sales is a relatively
tight ratio of 3.6 available to every 1 pending sale. A
not so tight, but still healthy market exists in San
Ramon where there is 3.8 available listings for every 1
sale. Livermore represents a market with more generous
selections with a ratio of 5.4 available listings for
every 1 sale. While general real conditions in the East
Bay range from a relative sellers market to a clear
buyers market, don't loose site of the big picture....
the Bay Area market is and will continue to be a solid
investment! For over 20 years I have been impressed by
the resilience of Bay Area Real Estate. I have watched
and weathered two major real estate storms in my tenure
as a real estate professional. Media gloom and doom came
with both, and we are currently in the "third
occurrence".
It's a Cycle!
Update of 5/1/07
We are seeing a seasonal increase in listing activity -
up 29% in 30 days. Still, current listings are 26% less
than December's number. More significant though is the
48% increase in closed sales! Sales have accelerated
while the number of new listings remains a
seasonal factor. Some tighter sub-markets reflect a 1 to
1 ratio of homes available to homes sold while the wider
market is closer to a 3.5 to 1 ratio. Most local
indicators are pointing to an increasingly healthy real
estate market although the days on market for the
average listing is 39 days. The next two months will
test market demand as listing activity continues
to accelerate. East Bay sales activity is fairly
consistent throughout the price spectrum and Alameda
County home prices were up in March by 3.1% over March
06. Although inventories are increasing, demand
continues to be healthy.
Update of 4/3/07
Even with increasing inventories, multiple offers occur
on homes that are well-priced and desirably located -
especially in the East & North Bay areas. One Berkeley
property received 18 offers. One listed in the $800
thousand range, sold for $450 thousand over asking.
Other markets experiencing steady demand are Walnut
Creek , Orinda, Danville, Livermore , Pleasanton and
Fremont.
San Francisco is also strong where one home had 114
groups through its open house. Some properties on the
market for multiple months are receiving more than one
offer. San Mateo reports that most transactions are
attracting multiple offers. As buyers sweep in to buy
realistically priced housing, momentum will build
towards an improved buyer seller equilibrium. As always,
this transition will not be telegraphed and the news
media will be weeks or even months behind the curve in
reporting the market shift!
It appears that we have hit the low of the market's down
cycle and are slowly recovering. "Sales activity is
certainly better this quarter than last quarter," a
quote from new home builder Signature Homes' CEO.
Despite all the doom-and-gloom stories and dire
predictions over the last year, 2006 was the
third-strongest year on record for existing-home sales.
The housing market already appears to be moving beyond
last year's low cycle, while buyers are being encouraged
by relatively low interest rates and more competitive
pricing. Additionally, the East Bay job market has
recently advanced to its healthiest level on record. The
Center for Continuing Study of the CA Economy has
recently predicted the entire Bay Area is at the
beginning of an economic surge that could persist for 5
to 10 years. Also, available housing inventory is
substantially down from last year's high by as much as
40% in our submarkets.
The West Coast outpaced the rest of the country with a
residential construction gain of 26.4% in February. This
represents the biggest increase since January 1997.
Business 2.0 magazine publishes a list of the top five
"bubble-proof" markets -- areas where annual
appreciation outpaces the national average by at least
30 percent. The San Francisco Bay Area market is one of
only 5 markets that fit into this category!
Larry Waelde, Associate Broker
Keller Williams Realty 1 800 868-2070
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