Looking for trends? There aren't any. It is a serendipitous market. One week up
the next week a bit slower. Although with a few exceptions. Even for the Bay Area
there is no uniform weekly forecast. There are ongoing trends that may not yet
calculate into sales but show a building demand. Just like they talked for years
about the building bubble in the real estate market, we now have a balloon that is
filling up with buyer demand.
Open houses continue to show strong attendance in the majority of markets.
Showings average consistently between 10-40 groups. We are still seeing the
“super” open homes with 50-100 plus groups. During the reporting period a 4
bedr./3 ba. Larkspur home listed at $2.495 mil. was visited by 120 groups. In
Novato a 6 bedr./5 ba. home listed at $1.46 mil. experienced close to 200 buyers.
The Berkeley/Oakland/Piedmont open homes averaged between 30-100 groups.
There is no lack in buyer interest.
Multiple offers haven’t gone away either. Thirty percent of the accepted offers
ended up with more than one offer. Most are between 2-4 offers. There are the
exceptions like the REO (banked owned property) in Napa listed at $397,750 that
attracted 13 offers. You can’t blame many of the buyers out there who are looking
for that incredible deal only to find that others are doing the same. However most
of our multiples are in highly desirable areas with lower inventories like the San
Rafael 3 bedr/2 ba home that received 4 offers and went substantially over asking
price. Many of these homes are impeccable with listing prices that reflect current
market pricing.
The only things preventing a return to a balanced market is the pervasive negative
economic news----accelerating oil and food prices, the downward trend in
earnings reports (although a few bright spots with JP Morgan, Wells Fargo, Apple
and Ford), and continuing liquidity challenges in the mortgage markets (meaning
banks have become extremely reactive with increased underwriting requirements
and a shrinking secondary market to sell loans to).
There is no shortage of demand. Even with the negative economic news, a recent
Gallup poll, found that 53% of Americans still feel it is a good time to buy a home.
For those who make more than $75,000 that percentage increases to 69%.
Seventeen percent of buyers felt there homes were worth less than what they
bought them for. O.K., that sounds big. I like to look at the eighty-three percent
that felt their houses were worth more than what they bought them for. I have
attached the results of that poll.
Buyers continue to put off their decisions. However this can only last so long. We
are beginning to see those that have been waiting are taking the leap. The balloon
can only fill up so much and then it needs to start releasing the pressure. That will
happen when we start to see more frequent news showing that we are on the road
to recovery. We still have a few more bumps in the road to overcome, but they
will pass and those buyers that took advantage of this period of adjustment will be
rewarded.