Congratulations to the New Orleans Saints on an exciting Super Bowl victory yesterday! Now, the question is whether the Saints first championship will translate into a heavenly year for the stock market and – by extension – the housing market.
Popular wisdom maintains that the outcome of the big game can determine the stock market’s direction in the coming year. If the winning team is from the old NFL (now NFC), the theory goes, it forecasts a good year for the market vs. an AFC victory. So here’s to the former “Aints” and to a super year in 2010.
Football lore aside, we are seeing the market starting to pick up in much of the Bay Area as we head into the post-Super Bowl season for home buying. In general, 2010 is starting off considerably better than 2009 in terms of sales and overall activity. Open houses are seeing non-stop activity in many communities, an early indicator of future sales. There continues to be a shortage of properties in prime communities, but our offices are seeing a steady increase of listings as buyers realize that there are opportunities for them in this market.
The lack of inventory continues to make well-maintained, reasonably priced homes stand out. One property in southern Marin County listed at $1.35 million, for example, received 11 offers. While that was the exception to the rule, we are seeing multiple offers in many communities. Buyers are circling attractive listings and many are willing to make all-cash offers to win out.
I think we’ll see a much earlier spring selling buying season this year due to the upcoming deadline for the home buyer tax credit. The season typically takes off in March and runs through May. But buyers who want to claim this year’s tax credit, which ranges from $6,500 to $8,000, must purchase their home by April 30 and close by June 30. So look for more activity than normal in February and March as we head toward the finish line.
Here’s a market-by-market breakdown from our local offices:
East Bay—Berkley reports price reductions in the over 1.5 million range and even at the million plus range. Castro Valley stated many new listings are coming on the market. A welcome surprise. However, cash is still king. We recently sold a 600K plus house, all cash. Danville reported that the high end is still slower than the rest of the market but activity is picking up. Inventory is still an issue in the less than million market. Many homes are being sold with multiple offers, which is helping to firm up sales prices. Fremont supports the dynamic indicating extraordinary low inventories with a steady buyer pool actively pursuing properties. Walnut Creek also reported the lower priced market is extremely active. An REO listing in Antioch had 9 offers at 9:00 one morning when one of the agents called to check for a client. When she checked back at 12:00 noon, there were 49 OFFERS.
Monterey County— The Monterey Peninsula market is quite active for January, in terms of sales, open homes and even listings, which are on the rise. The Peninsula offices report continued low inventory levels in lower-priced REO areas, but they are seeing more activity in higher priced properties. In fact, they closed on two properties over $4.5 million last week.
North Bay— Low inventory is still a common issue in many areas of the North Bay. The result has been tremendous activity in many of the open homes that are out there. Novato reported one open house had 70 people, another 50. Encouraging news in Southern Marin is that four new listings over $1 million last week received multiple offers, including one at $1.35 million that received 11 offers. Greenbrae reports steady traffic at open houses but inventory still lagging behind consumer demand. Smart sellers are starting to realize now is a good time to have their home on the market. There were 13 multiple offers in Santa Rosa as open escrows are running high.
Peninsula—Activity remains steady or even increasing on the Peninsula, but low inventory continues to be a hurdle in many areas. Inventory is close to half of what is was last year, Burlingame reports. Buyers are snapping up well-priced homes when they appear, many with all-cash offers. Half Moon Bay reports seeing a dramatic increase in open house traffic with buyer’s looking for the best deal and the lowest price. They report that sellers are starting to be more realistic on their list price – starting at market value rather than reducing each month. The Menlo Park offices also report that the local market is inventory challenged. Palo Alto and Redwood City are seeing sales activity slowly picking up as well. In San Mateo, anything under $1 million is selling very quickly, while the high-end Woodside market is very slow right now.
San Francisco— Sales activity has been steady in much of The City, with buyers ready to move when they find the right property. The Lombard office reports good listings are going fast, and multiple offers are definitely back. In some cases, offers are coming in without financing contingencies despite the challenging mortgage market. Market Street reported 11 offers were received on an extreme fixer upper and seven offers were received on an entry level home. Agents are very busy writing offers, they stated. The Noriega offices reports deals are extremely difficult to get ratified in this market, while the Van Ness are is seeing a pick up in both listings and sales.
Santa Cruz County: Market activity continues to be picking up in Santa Cruz as we move toward warmer weather. Lots and lots of buyers out there circling, ready to make offers. Open houses for the most part have been well attended, weather permitting. The inventory continues to drive the multiple offer situation especially under $700K – driving prices in some areas up. Appraisals continue to be an issue, and lending is taking longer. Some better economic news has prompted more people out along with the continued low interest rates.
Silicon Valley: Cupertino reports that 2010 is starting out much better than 2009, with non-stop activity in open houses and nearly all sales triggering multiple offers. In Los Altos, the market is waking up from the winter hibernation with new listings coming on the market and buyer traffic is increasing at open houses. But it’s still slow for sales above $2 million. Similarly, Los Gatos and the San Jose Almaden area are seeing an increase in both listings and sales. Saratoga and San Jose Main are seeing a slow but sure increase in sales activity.
South County: Morgan Hill reports the buzz among agents continues to be the lack of inventory, sending many agents “back to basics” by talking to homeowners to explain why this could be a very advantageous time to list their home for sale. The old Real Estate adage, “List to Last,” rings true.
In a quick overview of our Previews properties – I’ve noticed an uptick in our luxury sales in areas that have been somewhat slower to see activity. For example- all within the past two weeks, in Burlingame we closed a $4.2M property – Carmel offices have closed three transactions at $4.7M, $4.5M, and $3.9M. Woodside closed a $5.8M sale, and our Menlo Park Santa Cruz office closed a transaction in Atherton over $11M. This certainly reinforces what we all know to be true – luxury buyers are out there, and they are purchasing properties when they find what they like, at what they perceive to be fair market value.
Have a great week!