Goldman report

Ended July with a bang. It was our 2nd best open and closing month since last July. I think we will see that same trend when I do the July Bay Area summary next week. For the second week in a row the Sunday SF Chronicle went sans any financial calamity stories. The best it could muster was another story on the Housing Bill. From the real estate section the main story was on how the internet has become the prime source of marketing homes. Two other stories, one on how buyers and sellers can negotiate closing costs with title and escrow companies and the other on the on-going trend of hedge funds buying bad loan portfolios from banks and brokerage houses. If this trend continues it shows the media is moving on. It doesn’t mean we won’t see stories on a declining housing market; however the frequency is diminishing rapidly. In other words, we are unwinding the mess that Wall Street and other financial services created with the sub-prime and the coming Alt-A problems.

Fewer and fewer new listings are on coming on the market. This is not uncommon for the month of August. The most active part of the market remains in the under $ 1mil range. REOs and short sales are still a significant part of the markets in Sonoma, Napa, Solano and parts of Contra Costa and Alameda counties. Every now and then, a higher priced listing will fall in that category of sales as did a $3.25 mil dollar Lafayette home that went into escrow.

We have noticed an increasing number of sales in the higher price ranges in the No. Bay. Most recently we sold the multi-million dollar Cloudview Estate winery. It was sold to the Mondavi family. Believe it or not, there was a back-up offer. There appears to be a premium now on boutique wineries.

Open house traffic remains steady. The most popular and well priced listings are still attracting good sized crowds as one Oakland Hills listing priced at $1.025 mil. did with 100 groups passing through. Not far behind was a Berkeley listing listed at $599K that had 75 visitors. Across the Bay in SF a Jordan Park 2 bedr. 2.5 ba. home listed at $1.875 mil. entertained 70 groups. The majority of our open homes averaged between 10-20 buyer groups. This is contrary to the normally slow open house traffic during the month of August.

Multiple offers still are strong in the Berkeley, No. part of Oakland, Piedmont, San Francisco and Lamorinda marketplaces. Our Montclair office had over 40% of their sales involved in multiples. Most of the multiple offer activity was in the under million dollar price range.

August could be a telltale month as to the direction of the market as we head into the Fall. Last August was the beginning of a strong downturn in the second half of 2007 when the sub-prime fiasco first manifested itself.

Today’s rally in the stock market, the highest single day rise since April 1st, , could be a positive omen. Can’t wait to see gas prices fall under $4.00 a gallon and they will----given that we are getting close to a Presidential election.