Livermore Real Estate

Demand Returns to the Real Estate Market!

lw1956 — Thu, 15 Dec 2011 20:03:37 GMT

While the Bay Area housing market has had its ups and downs much of this year, several segments of the market remained resilient through much of 2011.

According to DataQuick, real estate investors for the most part - bought one out of every five single-family homes and condos in 2011. Buyers paying cash accounted for more than a quarter of sales. Short sales - those transactions where a home sells for less than the homeowner owes on the mortgage - added up to another 20 percent of sales. Finally, the move up buyer was back. While no statistics are available for this market segment, we witnessed this resurgence first hand.

Today's market is extremely attractive to investors. Record low mortgage interest rates, coupled with very favorable asking prices for distressed properties and other entry level homes, mean that rental income can easily cover the expenses for a new landlord owner. Given the volatility in the stock market, real estate is looking like a better and better alternative.

We think real estate investors are playing an important role in our market. When they buy, they often upgrade properties that in many cases are badly in need of maintenance. They're helping to clear out the supply of vacant, bank-owned properties that can be blight on neighborhoods. And in general, they're reducing the huge inventory of distressed properties that serve to keep all home prices down.

Unlike past investors, many new landlords are generally not expecting to quickly flip a home for a profit. Many are seeking reasonable returns by simply owning and managing rental properties which are experiencing rising rents.

It's important to remember that most housing recoveries are preceded by a rise in rental housing rates. This has two effects, both positive for our housing recovery. The rise in rents attracts more investors as purchasers which crimps supply and it causes more renters who qualify for homeownership to consider a purchase, especially with today's interest rates.

The other good news is that move up buyers are back! They want to "buy the deal" and many are willing to wait out a short sale escrow to get a good value. Short sales no longer carry the stigma they once did. While still the exception, they are an attractive option for today's buyer.

Current market inventory is about 20% less than this time last year. We hope that we're at an inflection point and prices start to turn around next year. At the very least, if inventory is kept under control this will set the stage for future price appreciation. Remember, volume precedes price in real estate cycles.

Next year should be a better year for sellers than 2011. The South Bay led the Nation in job growth over the last year. According to the Stockton based Business Forecasting Center at the University of the Pacific, South Bay job growth should produce a ripple effect for the nine-county Bay Area region. As we approach a New Year we are expecting more and more of the same types of buyers but within an improving real estate market. Demand has returned to the market place and it looks like it will continue!

Kathleen & Larry

The Oracle of Omaha is bullish on housing

lw1956 — Thu, 17 Mar 2011 20:33:00 GMT

– and he may not be alone

When Warren Buffett talks, people listen. In particular, the Oracle of Omaha gets investors’ attention when he issues his annual Berkshire Hathaway shareowner letter, a frank and enlightening assessment of the economy and investment outlook. What jumped out in this year’s letter released last week: Buffett is bullish on housing again, and he’s putting his money where his mouth is.

In his letter, Buffett notes that, “a housing recovery will probably begin in a year or so. In any event, it is certain to occur at some point.” He said that “home ownership makes sense for most Americans, particularly at today’s lower prices and bargain interest rates,” adding, as an aside, that “the third best investment I ever made was the purchase of my home.” The first two, he says, were wedding rings.

Consequently, Buffett told shareowners, he has made several strategic investments in the housing sector in recent months. Among these are five corporate acquisitions in the building components field, a $50 million acquisition of a brick manufacturer, a new $55 million roofing plant for Johns Manville, and $200 million capital expansion of his Shaw Industries carpet company.

"Buffett doesn't spend money unless he thinks he's going to make money," Jeff Matthews, hedge fund manager and author of Pilgrimage to Warren Buffett's Omaha, said in a recent interview. Matthews said Buffett’s housing bullishness is "interesting because that didn't happen last year and didn't happen the year before that."

The legendary chairman of Berkshire Hathaway isn’t the only one suggesting a turnaround in housing may be at hand. The Wall Street Journal ran an article recently headlined, “Why 2011 May be the End of the Housing Crash.” The Journal gives a number of reasons as to why we may have seen the bottom, including the fact that housing is the most affordable it has been in decades.

Nationally, the cost of a house is the equivalent of about 19 months of total pay for an average family, the lowest level in 35 years, Moody’s Analytics says. Prices usually average close to two years' pay, although that varies nationally. At the peak, midway through the last decade, a home in Los Angeles, the Journal said, cost the equivalent of 4.5 years' pay. The average price has since fallen to just over two years' income now. That's well below its pre-bubble average of 2.6 years.

"Pricing is down so much in some markets that when you analyze renting versus owning it makes much more sense to own," says Michael Larson, a real-estate analyst at Weiss Research in Jupiter, Fla. Such analyses are “definitely bullish,” the Journal said. "Housing prices will probably bottom in 2011," agreed Scott Simon, a managing director at money-management firm Pimco in Newport Beach. His views are important because Simon foresaw the housing crash, helping his firm dodge losses that plagued Wall Street.

The Journal also points out that investors are stepping up to buy real estate, which is usually another sign that the market has bottomed out or is near a bottom. In some instances, they’re paying entirely in cash. “That's a far cry from the heady bubble days when borrowed money seemed the key to riches,” the paper reported. “It's a sign that these investors are betting on a rebound.”

Finally, one other story caught my attention this week. The Sacramento Bee, interestingly enough, ran a piece on the growing Bay Area economy, noting that, “Silicon Valley is starting to pop again.

Green tech is alive, as is anything in social networking. Venture capitalists are investing. Google is hiring 2,000 workers this year; Facebook is moving into new quarters with room for hundreds of additional employees” and Skype’s Palo Alto office is doubling its local employment.

What's happening in Silicon Valley, and throughout the Bay Area, is a striking example of California's "bifurcated recovery," said Stephen Levy, the noted economist and director of the Continuing Study of the California Economy in Palo Alto. Simply put, the Bee reported, “Inland California remains depressed while coastal California is showing life.”

Why the split? Experts told the Bee that the California economy doesn't recover all at once. Coastal industries like technology and international trade are doing better and wealthier Californians, who tend to live on the coast, are enjoying greater gains in the stock market over the past couple of years.

What to make of all this? It gives me reason for optimism that the real estate market in general – and the Bay Area market in particular – may see much brighter days in 2011. As the economy continues to mend, it’s reasonable to expect some of the greatest economic gains to be in the tech sector in Silicon Valley and the financial and biotech sectors in San Francisco and the Peninsula. That bodes well for our local housing market.

As for our East Bay Market, we're off to a quick start this quarter. Sales are up over last year this time and inventory is not growing appreciably yet. Buyers sitting on the fence may miss the last great opportunity to buy before home appreciation returns. Larry

Below is a market-by-market report from our local offices:

We're Encouraged!

lw1956 — Fri, 14 Jan 2011 22:39:00 GMT

We're Encouraged!

With the holidays behind us and a brand new year underway, Realtors, home sellers and buyers are all wondering what 2011 will bring to the Bay Area housing market. After a choppy 2010 that saw strong activity early in the year and a softening in the second half, Realtors are encouraged that recent improvement in the economy could bode well for the housing market.

The real estate market is so closely aligned with the fate of the overall economy, the stock market and consumer confidence. In general, all three of those economic indicators have been recovering in recent weeks. And this week in particular gave housing market professionals reason for encouragement.

In his first appearance before the new Congress, Fed Chairman Ben Bernanke gave a more upbeat assessment of the economy than he has in the past.

At the same time, the financial markets have rallied in recent months. The S&P 500 and the NASDAQ have risen 10% and 12%, respectively, over the past three months. Many Silicon Valley companies continue to report strong sales and profits over the past year. All of this undoubtedly is having a positive impact on consumer confidence.

Finally, this past year's holiday season provided some welcome news for retailers. U.S. retailers posted the strongest revenue growth since 2006. A Thomson-Reuters index of 28 leading retailers showed sales rose 3.1% at stores open less than a year.

Nonetheless, despite two steps forward and one back, the overall economy appears to be trending upward. We're cautiously optimistic the same will be true for our housing market in 2011.

Hard To Believe!

lw1956 — Thu, 04 Mar 2010 23:25:00 GMT

Hard to believe, but many homes drawing multiple offers again as listing shortages continue

My how things have changed in just one year! A year ago at this time, many homes were languishing on the market as buyers stayed on the sidelines, worrying about their jobs, the sharp decline in their 401k accounts, and whether housing prices would ever rise again. Today, many of those buyers have swallowed their fears and are out in force once again, spurred by an improving economy, a solid recovery in the financial markets, and federal home buyer tax credits that will expire this spring.

While no one claims the housing market is out of the woods yet, an unusual dynamic is occurring in many communities around the Bay Area: Despite the choppy housing market, there is an army of confident, well-qualified buyers out searching for homes, but many sellers are now sitting on the sidelines! One listing in San Francisco’s Outer Mission neighborhood priced in the mid-$500,000 drew more than 100 groups during a two hour open house during the past holiday weekend.

Inventory shortages continue to be the challenge in many areas. In Santa Clara County and the East Bay, for example, the number of homes for sale is standing at half of what it was a year ago! This has resulted in as many as half of the listings on the market attracting multiple offers as buyers fight it out for the best properties.

This conundrum has resulted in prices rising even as sales are falling. DataQuick, the La Jolla-based research firm, reported that the median sale price of homes and condos in the Bay Area shot up almost 17 percent year over year in January while sales dipped 4 percent. The biggest jump in the median price was 18.3 percent in San Mateo, but all counties (except Napa) saw strong increases. (see chart below) The upper end of the market is particularly sensitive to this trend, as illustrated by Santa Clara County, which saw sales of million-dollar homes half of what they were a year ago even as prices rose 4 percent, according to Coldwell Banker Residential Brokerage’s luxury market report.

Sales Volume			Median Price
All homes	Jan-09	Jan-10	%Chng	Jan-09	Jan-10	%Chng
Alameda	994	936	-5.8%	$300,000	$341,000	13.7%
Contra Costa	1,333	1,078	-19.1%	$220,000	$257,250	16.9%
Marin	122	153	25.4%	$525,000	$535,000	1.9%
Napa	78	87	11.5%	$370,000	$350,000	-5.4%
Santa Clara	1,037	1,137	9.6%	$400,000	$451,000	12.8%
San Francisco	229	311	35.8%	$562,000	$629,000	11.9%
San Mateo	273	355	30.0%	$489,500	$579,000	18.3%
Solano	560	462	-17.5%	$192,500	$201,000	4.4%
Sonoma	424	334	-21.2%	$299,750	$325,000	8.4%
Bay Area	5,050	4,853	-3.9%	$300,000	$350,000	16.7%

Source: MDA DataQuick Information Systems, www.DQNews.com

Inventory levels are slowly rising in some communities, and the balance between buyers and sellers could shift in the weeks and months ahead. But right now it’s a good time to be a seller if you price your home for today’s market.

Are We There Yet!

lw1956 — Thu, 09 Apr 2009 21:09:00 GMT

Signs of a Bottom?

4/9/2009

The time to buy a home may be now! With the Obama administration's economic stimulus plan now in place, we believe that consumer confidence is finally on the rise. We're already seeing the initial signs of that with increased open house traffic, buyer inquiries and calls to our office. Some experts are predicting that with the help of the $8,000 first time home buyer tax credit, the increase in conforming loan limits and the new preventative measures against foreclosures, we may reach the bottom by the middle of 2009.
Knowing this, now is the time to share this promising news with you if you're a potential home buyer or looking for investment property.

We're also seeing another sign of a bottom for housing, consolidation. Pulte Homes is buying another home builder, Centex. When homebuilders start to buy each other out, it's a sign that they think valuations are attractive and the down-side is limited. It's also a sign that at least some of the home builders are healthy enough to make moves. This particular acquisition by Pulte is even more interesting because Centex owns a lot of land in Florida and California - two markets that have struggled the most and have had very high rates of home foreclosure.
We strive to keep you informed so you will know when we may be nearing the end of this challenging cycle in California real estate and if you are considering buying a home or other real estate, now may be the time.

More of the Same or is 09 the Come Back Year?

lw1956 — Tue, 24 Feb 2009 23:24:00 GMT

02/16/2009

As we approach the 2nd half of February we see fewer listings and increased sales over this time last year! Yahoo! The move-up buyer is still largely absent from the market but the investor and 1st time buyer are pushing the pedal to the medal! They're buying. Unfortunately, they are also dictating market pricing & market expectation. Short sales are growing as banks become more reluctant to take on more foreclosed inventory. We seem to be working with only two types of clients......the distressed seller and the buyer who's in the market to take advantage of that seller. It's not all that black and white but this market is certainly unlike any we have ever seen. We are certain of only one thing - this is the buying opportunity of the decade or even decades. Here's what's going on locally as reported by some of our local Coldwell Banker Offices:

Tri-Valley Update.
Since the first week in Jan.2009-
Livermore active listings have decreased about 6% and
total pending sales are up over 8%; Pleasanton active
listings have increased 23% and total pending sales are
up 20%; the active listings in Dublin have remained
steady and the total pending sales are up almost 10%.
A good trend, except for the dramatic increase in
inventory in Pleasanton. Lots of buyers in the market,
first time buyers and investors, with multiple offers is
very common.

Livermore.... is slow this week! In the past 90 days we have had 4
sales, 2 have closed and 2 are pending in this segment
of the market in Livermore. On a positive note, the
active listings in the price range are down about 15% in
the past 90 days in Livermore.
San Ramon....increased activity in the entry level price point. Executive level homes are slow to move unless deep discounts are reflected in the pricing.

Fremont......as more short sales/foreclosures enter the market, buyers stand waiting to make offers. Higher end is slow as with most local markets but overall buyer interest is stronger than the Tri-Valley area.

Castro Valley......
Well priced, well maintained properties are being
snatched up in our local market due to decreases in
inventory. We had a well priced Castro Valley home
that saw multiple offers and went pending (over asking)
within five days of listing. Another clean, well priced
home in the San Lorenzo/Hayward area went back on
the market and had three offers within 2 days. The
shrinking inventory has been helpful to us.
Prices continue to dip. Castro Valley pricing remains
super competitive, with entry level properties hovering
between 350-400K. Oakland is offering some
incredible bargains. One of our Buyers just wrote an
offer on a 3/1 SFR for 65K. Another buyer has picked
up a triplex for 179K.

Hayward properties are still lingering in the 199K-300K range for entry level.
Buyers continue to flood the office. Activity is definitely
up. One Agent mentioned to us that she has been in
the office, writing offers, until 9pm every night for the
past week or two. Things seem to be looking up.

11/19/2008

The California Association of Realtor's chief economist is Leslie Appleton Young. She recently conducted her 2009 forecast presentation Specifically, Leslie shares how California compares to the rest of the country, noting that while we decreased further and faster than the country as a whole, we are also rebounding at a much faster rate than the rest of the country. It is an important fact that you should be aware of.

She also shares the importance of local forecasting noting that it really is a mistake to paint the California real estate market with a broad brush. For example, markets like Central California were hit much harder than the Bay Area yet are often lumped into California real estate stories which make our local numbers seem worse than they actually are.When in fact, our numbers are showing some compelling positive signs. Our sales in the Bay Area, according to DataQuick, have increased 45% since 2007.While we do know that much of this is related to bank owned property sales, the positive side of this is that the buyers are out there and regardless of the price point, the fact is that homes are selling. As we weed through the bank owned listings, inventory will decrease which will eventually cause the price point to increase.

September Market Update!

lw1956 — Mon, 22 Sep 2008 21:35:00 GMT

Our Bipolar Markets!

9/21/08

If you missed the recent article by Contra Costa's Assessor, Gus Kramer you missed a very clear call to action. His quote says it all, "As the assessor of Contra Costa county since 1995 and a student of the real estate market of the East Bay since 1971, I've never felt more compelled and stronger about advising anyone and everyone who ever thought about getting into the real estate market to do it now. The assessor does say that prices will still go down a little lower until the end of 2008, notwithstanding he feels purchasing now is a must. On a year to year basis our local market has been performing impressively if you just look at the numbers. Active listings are down 21% while pending sales are up a stunning 83% over this time last year. Now, of course, when we break it down we see the bulk of sales activity in the entry & mid tier price points with many of those transactions bank owned and short sales.Our high end market continues to struggle. There are 66 listings priced at $1 million or more in Livermore. There are only 5 pending sales in this price range. Clearly we have an investor and first time buyer driven market! The move up buyer is still holding back in Livermore-Pleasanton. Larry & Kathleen 800 868-2070 .

September 08 Market Update !

lw1956 — Mon, 22 Sep 2008 21:31:00 GMT

Our Bipolar Markets!

9/21/08

Livermore Real Estate has Two Faces!

lw1956 — Tue, 15 Apr 2008 22:56:00 GMT

The good news is Livermore has 14 % fewer listings and 56% more pending sales than we did Oct. 07 when our inventory peaked. The not so good news is that distressed listings (foreclosed, bank owned & short sale) are a significant influence on our entry and mid level markets. This can crimp the supply of move-up buyers fueling our South Livermore sub-market. In the Tri-Valley, 21% of pending sales are foreclosures. Sounds bad until you look at Brentwood where 72% of pending sales are foreclosures. The silver lining in all these dark clouds is the demand for bank owned properties. It’s strong with most sales receiving multiple offers. When list prices attract multiple buyers it’s a good indication that prices are bottoming.
So where are we in our South Livermore executive home market? We may be at the bottom. There exists 4.3 homes available for every 1 in escrow. …Not bad, given the overall market. And….very few short sales or bank owned exist in our submarket. In fact, of the 157 distressed listings in Livermore, only 3 exist in our executive home sub-market in South Livermore (newer construction priced $900k+) How well our market absorbs the upcoming spring inventory surge may be very revealing! Far to many current buyers are bargain driven thanks to the constant media doom & gloom, but if inventory levels out, a sense of urgency may return to the market. That changes everything, and the new conforming loan limit of $729,000 (from $417,000) can only help!
Larry & Kathleen

Are Buyers Stirring?

lw1956 — Tue, 26 Feb 2008 23:26:00 GMT

Feb. 26, 2008

Economic news was sketchy again this week, with housing related headlines continuing to point out the scary negatives. Fortunately, we continue to see a surprising amount of interest from buyers who are finally deciding to take the plunge. Really, the deals that are out there are getting to be irresistible, and with mortgage rates starting to creep back up, buyers are recognizing that now really just may be the best time to buy.
Sales are increasing in some areas, and it is perhaps the passing of the economic stimulus package that is spurring these buyers into bringing their checkbooks with them when they’re looking at properties. If not the passing of the package itself, it is the added degree of consumer confidence that came as a result of it. Buyers are also being properly educated by the real estate industry and doing their research, not just being scared by skewed headlines. Now they’re jumping in while the deals are out there. We are also starting to see homes that have been on the market for quite awhile starting to get some interest. It is all about being the best price and condition in your class of property. First time buyers are also finding affordable, desirable homes in lower price ranges and through REO sales and they’re buying them.

In Sonoma county we continue to see improved sales activity especially in the lower price ranges and on REO properties. Marin county sales are continuing to improve from January levels as well. In San Francisco , as in other parts of the Bay Area, the high end market remains particularly strong with homes well over the $1 million mark in high demand. A Burlingame property had seven offers and sold for $125,000 over the listing price. Parts of the Peninsula keep seeing this phenomenon occurring, but other sub markets still languish. In Southern Alameda County we have a mixed bag with parts of Pleasanton and Fremont attracting motivated buyers while entry level interest in Livermore still anemic.
Like never before, markets differ from one city to another and in some markets foreclosure pricing is driving the market. It’s worth keeping in mind that many of these off-market sales aren’t included in sales figures collected and reported by the media. Everything isn’t as bleak as some would have us all believe. We are certainly seeing what I would call a split market with the high end doing well, and with the median priced homes slowing their price dive.

Buyers Have Been Sighted!!

lw1956 — Thu, 24 Jan 2008 20:42:00 GMT

The New Year seems to be starting off with a bang! Yes - the headlines continue spouting the latest "factoids" about the implosion of the housing market from whatever company is cranking out the latest set of numbers. However, buyers may have reached the tipping point and seem to realize that the only way to find out if they can get the best deal on the home of their dreams is to TRY. And they're out in full force doing just that in most of our markets. Is it a sea change? It's too early too tell, but it is motivating to know that both buyers and sellers seem more willing to listen to their real estate professionals now, and are putting less faith in Ivory Tower economists who don't live in the Bay Area or understand the nuances and intricacies of our housing markets.

Over and over, our offices are reporting listings and open houses that are buzzing with activity. Two agents in our office report that they encountered multiple offer situations when trying to present $1M + offers just this past weekend. We have witnessed similar scenarios in our South Livermore-Pleasanton Market. In most local markets agents report that they are very surprised at the excellent turn out and open enthusiasm of open house attendees. Buyers appear serious for the first time in a long time.

It's pleasant to report that not only are buyers out there looking - they're also buying. It's been said many times before, but it bears reminding everyone that proper and smart pricing of a home is truly key to entering into a speedy sale. Inventory, priced right, is getting a lot of attention. If it's not, it's not.

The strength of the high-end and luxury market is especially noteworthy. The lack of fresh inventory on the Peninsula appears to be the only significant drag on that sub-market.

We are off and running for the New Year and buyers seem to be ready willing and able to seize the moment....at least so far!

Larry & Kathleen

Will 2008 be the Turnaround Year?

lw1956 — Tue, 08 Jan 2008 00:48:00 GMT

1/8/08
The New Year is here and with it brings countless predictions by economists, industry analysts and more regarding the impending 2008 real estate market. While we don’t profess to own a crystal ball, what we can say with definite certainty is that the current market won’t last forever which is why we're here to tell you that 2008 may be your best opportunity to own a slice of the Golden State.

What You May Expect from Real Estate in 2008....
Some industry analysts predict that the market will turn around in 2008 believing that the overall economy and job growth will continue to move ahead at a decent pace, core inflation will remain under control, the credit crunch in mortgage markets is showing signs of easing, the supply-demand equation will be better balanced as builders begin to whittle down their excess inventories and that interest rates will continue to be attractive.

We tend to agree with the California Association of Realtors®’ prediction that we will see a moderate decline (between three and four percent) statewide in California home prices next year.

In areas where there is little new housing, where it is hard to build and where there is a wealthy population,we believe there may be little decline. The main reason is that there is limited opportunity for new development in these areas and therefore properties are likely to retain their values.

For Buyers
The current housing market offers a unique window of opportunity for confident buyers. The exciting news is that for the first time in quite a while, the stars are in alignment for consumers: mortgage rates remain attractive and there is a large selection of homes to choose from. Furthermore, if history is any indicator, home prices in California remain strong. Thanks to these important factors, now truly may be the best time to buy.

For Sellers
Homes are selling! They may not be selling at the red hot, multiple offer heydays of 2003 and 2004, but they definitely are selling. For those that aren’t, unfortunately those sellers may not be receiving the counsel they need to get their home sold in today’s market.

Now, possibly more so than ever, you need a qualified, experienced Realtor® who can assist you in selling your home. It is usually not enough to simply post your home on the MLS and post a “For Sale” sign in the yard. You need someone who understands the intricacies, inventory and challenges of your local market and someone who knows how to properly position your home so it stands out among the sea of listings currently available.

If you are considering buying or selling your home in 2008,we have the resources, knowledge and experience to properly represent you in today’s market. Contact us today for the expert representation you deserve.

Sincerely, Larry & Kathleen

The Holiday Market!

lw1956 — Tue, 18 Dec 2007 21:05:00 GMT

From Castro Valley to San Francisco, Menlo Park to Livermore and Walnut Creek, we’re hearing that buyer activity is surprisingly busy for this traditionally slower time of year. In some areas, this can be attributed partly to the great selection of value priced homes on the market. It can also be attributed to the fact that there are fewer buyers and fewer sellers around during the holiday season and the ones that are in the market are very serious about buying or selling a home as quickly as possible. Negotiations between buyers and sellers still remain fierce in many areas one of our office reports that up to five and six counter offers are not uncommon before a deal can be closed.

Attendance at open houses was as scattered as our micro-markets are. Sebastopol reports light attendance at opens, but lots of sales activity on properties near $1 million and over a fact illustrated by a five acre property with a small farmhouse that was listed at $850,000, received seven offers and sold for almost $1 million. Buyers haven’t slowed down in the Peninsula housing market either. Menlo Park reports that many agents are as busy now as they usually are during more traditionally busy months, and that open houses were "surprisingly well attended." One listing in Palo Alto had 10 offers and was ratified at approximately 20% over the asking price. "Above average" to brisk open house attendance is also being seen in Half Moon Bay and San Francisco .

A large majority of Coldwell Banker offices reported steady or increasing sales activity, while listing inventory in our markets saw mostly steady or declining levels. While inventory remains high and sellers are willing to negotiate some great deals, now may be the best time to buy.

Help Is On The Way!

lw1956 — Wed, 28 Nov 2007 01:17:00 GMT

Amidst the ever present negative news about foreclosures, notices of default and write downs from Merrill Lynch & Citibank....guess what? Fixed mortgage interest rates are at their lowest level in two years. Yes, you heard it here first. The Federal Reserve is loosening the money flow. Lenders are working with defaulting borrowers to modify their mortgage terms. Congress is trying to pass a legislation raising the conforming loan limit to $622,000 (from $417,000) in California. The forces are in place to stimulate the real estate market. It's just a matter of when the impacts will be felt.

A Mixed Bag!

lw1956 — Fri, 16 Nov 2007 22:26:00 GMT

The markets continue to be mixed throughout the bay area region. Well priced properties in great condition are selling and we are seeing a few multiple offer situations in areas with low inventories. The question is, what is well priced? Remember, real estate prices are heavily influenced by supply and demand. Sellers need to understand this now more than ever. It is confusing to see some areas with little to no available inventory and just a few towns away there can be an oversupply. The Data Quick numbers that come out monthly can be confusing as well. We continue to see unit sales down yet the median prices are holding fairly even. This is due to the fact that a few high priced properties are skewing the numbers. With fewer total sales each month it doesn’t take many high end deals to skew the median upward. Now more than ever. We are dealing with micro markets and the picture can change dramatically from town to town.

Here in Southern Alameda County the picture is equally mixed. Fremont has 4.2 homes available for every 1 home in escrow (1 to 4.2), Pleasanton has a ratio of 1 to 3.5, San Ramon is 1 to 5.3, Livermore is 1 to 9 and Dublin is 1 to 4.6.

A continually increasing buzz of activity is being reported from most areas, and house hunters are becoming more motivated to make informed buying decisions now while interest rates remain low and inventory levels create bargains.

Our offices held more than 540 homes open last week and attendance was reportedly busy in most areas. Sellers should continue to take note that the well-priced homes in good showing condition draw the greatest number of potential buyers and get offers. A well-priced Berkeley Street listing drew 58 visitors, and other listings in the area averaged around 20 visitors each. Burlingame notes agents writing offers in all price points. Half Moon Bay, Livermore, San Francisco and most of the Peninsula also report increased buyer activity.

Overall, listing and sales activity remains steady for most offices, but with a buzz of excitement and an increased sense of urgency. Sellers are beginning to think about the upcoming holiday season and many may be reconsidering their decision to sell. While the inventory remains on the market, there are bargains to be had.

Inside Information

lw1956 — Tue, 23 Oct 2007 00:28:00 GMT

10/22/07
Our company distributes an internal market summary each week. It's authored by Coldwell Banker's N. Ca. President and it often contains some surprising insights. I'll share it with you............

"Offices throughout the San Francisco Bay Area reported increased sales, increased activity and optimistic sales associates. Of our more than 560 homes held open, the majority of areas reported moderate to heavy attendance and many reported an influx of new buyers who aren't letting the barrage of mixed messages about the real estate market frighten them away from diving into the waters. We are also hearing of newly invigorated buyers who have finally realized that this really is the time to buy.

In remembering that real estate markets are local in nature, let's take a snapshot of some of the markets in the Bay Area this past week. From the North, reports indicate that new listings in Santa Rosa were seeing a good turnout of qualified buyers. Sales activity is increasing in Southern Marin and Greenbrae areas, and higher-end home sales continue to be strong. From the Peninsula, Burlingame reports that sales in upper-end communities continue to be very strong, and that many agents report meeting new savvy buyers at busy opens in a variety of price points. Menlo Park notes increased sales activity and very busy open homes. Palo Alto simply states, "Low, low inventory. High, high multiple offers." In the East, it is reported that the inventory of active listings in the Livermore/Tri-Valley area is declining. Homes under the $1 million price point in Lafayette and Orinda are selling with multiple offers. The hills of Oakland are swarming with buyers who are willing to go into multiple offer situations on the right properties. A home in Lafayette was listed for $910,000 last week and received 7 offers all over asking price. There is a decent market out there regardless of what the media is telling people.

We can't repeat the message often enough - now is the time to buy! Let's have a quick reality check: Inventory levels in most areas are starting to decline. The median price for homes in the San Francisco Bay Area rose almost 1% in September. Rents are soaring. There is still a wide, but declining, selection of homes for sale in many areas and there are bargains to be had. It's time to make that long term investment - now.

Understandably, there are still many buyers who are milling around trying to figure out who to trust!"

The Media's fascination with negative real estate coverage!

lw1956 — Fri, 12 Oct 2007 01:10:00 GMT

As a person who really loves to watch economic events, the stock market and real estate cycles I’ll never understand why or how the major networks and cable channels focus on negative real estate news. As a real estate broker I find myself spending more and more time correcting the misinformation quoted on the news for my clients and would-be clients. I’ll give you an example; who hasn’t heard of the recent double digit decline in home sales from the same time last year. This should be of great concern to any home owner of buyer. However, when the pundit or newscaster fails to disclose that the drop was from an all time record high in sales, they are talking out of context and misinforming the public. The media’s snapshots of market activity may grab the consumer’s attention but they also distort the big picture. Currently we are knee deep in unsold inventory. Selection is like it hasn’t been in years and interest rates are retuning to very attractive levels. Conforming interest rates are at their lowest levels since May. This is what we practitioners call A BUYING OPPORTUNITY. Instead of buying, many buyers who are in the market now will follow the media sound bites all the way to the next real estate market lift off before they get serious about buying. There won’t be the selection, but there will be a return of irrational purchasing so why not beat the crowds, buy low, buy know and watch the real estate circus from the comfort of your front porch when it comes back to town. Larry

Finally A Positive Note!

lw1956 — Thu, 11 Oct 2007 21:16:00 GMT

An Expert Opinion! 10/10/2007 Livermore, Ca

Just heard a presentation by Gary Watts, Real Estate Economist....He's more optimistic than most! Finally. Gary is saying the media version of our current real estate downturn is overstated and out of context. Lot's of statistics were presented in contrast to the media prognostications. Here's an example. "Only 3.23% of all sub-prime loans have entered the foreclosure process while the experts forecasted 7+%." Does that mean our market is only half as bad as we thought? Maybe, maybe not but the big important trends that have fueled buyer demand through the first half of this decade appear to be still intact according to Gary. They include: Strong home buying by immigrants specifically Latinos and Asians, (the falling dollar doesn't hurt), A continued influx of baby boomers to our warmer climate, A continued expansion of our job market (buyers now sitting on the side lines continue to have their incomes grow) and a continuing supply/demand imbalance.
He closed by saying while most our lamenting the ailing real estate market, the smart cookie is buying or getting ready to buy. Why? .....Because this downturn is a short detour in a market with continued strong economic underpinnings. Exploit the current situation. Buy and don't follow the crowd and wait for the market to advance. If you do you'll have less buying power, less selection and probably caught up in a multiple offer headache!!!! Larry 925 216-5869

Are We Seeing Any Light? - Livermore, Ca - 9/21/07

OK, foreclosures continue to rise, but the Fed's finally cut rates. Some jumbo lenders ($417,000 & above) have reentered the market this week but property sales are still relatively stagnant. Are we starting to see the light at the end of the tunnel? Or ..are we just being wiped side-ways in real estate market that continues to writhe in pain? The truth is we just don't know, but let me give you some perspective.

This slow down was inevitable with or without the Sub-Prime mess. The sub prime implosion accelerated the market drop and victimized those who could least afford it. Although the percentage of non-traditional loans in California is relatively small compared to total outstanding loans, they did comprise over 60% of the new mortgage loans in 2005/06. This is a first and one might say (follow me on this) that this is a non-traditional strain on the market and once it's over the market may surface as relatively healthy. It's true the market was getting to frothy and buyers were starting to through up their hands in disgust but there were plenty of buyers out there and most of those buyers are still out there waiting for a better time to buy. Yes, I know you can't time the market but when you stand little to loose in waiting, buyers will at the very least, search at a more leisurely pace. That's where we are at. Now, most adjustable rate resets like those in the sub prime loans will take place by late April 08 and that could be the beginning of the end to the negative media bias towards the real estate market. This would be a big event because the most negative part of the current market is market psychology. Unlike past downturns, the underpinnings of our local economy are strong and buyers sitting on the side lines biding there time. Keep in mind there still exists a huge shortfall between the amount of new housing being built and the formation of new households in California. Like the South, this market will rise again. For now though, don't miss this buying opportunity if you are a buyer. The market bottom is perceptible only after the fact and buy then you could be playing the multiple offer game. We've been there, and like all market activity….It's A Cycle!
Larry Waelde, Assocaiter Broker 925 216-5869

A Market in Retreat! 9/15/07
OK, the Real Estate market presently stinks especially if you're a seller with no buyer prospects in site! So why has the San FranciscoBay Area median sales price edged up to a new peak of $660,000 recently according to DataQuick Information Systems. Therein lies the problem with a "median price" focus. It's just not an 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, most local submarkets are not selling well, in part because banks are tightening qualifying standards due to the sub-prime meltdown. 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 21% from this time last year. However, not all sub-markets are behaving the same. In Pleasanton the ratio of available listings to pending sales is 8.4 to 1. Here in Livermore the ratio is 10.6 to 1. San Ramon ratio is 5.4 to 1. Dublin ratio is 5.8 to 1 and in Fremont the ratio of listings to pendings is 4.97 to 1. "The current rout for California homes sales is worse than the downturn in the first half of the 1990s and recovery could take as long as 18 months" according to Robert Kleinhenz, an economist with the California Association of Realtors. Many buyers are waiting for the market to worsen before they strike. If you are a buyer you should be actively looking, defining your neighborhood of choice and picking a qualified buyer's agent. You'll only see the market bottom in your rear view mirror...don't miss this buying opportunity!

I continue to be 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

I remember when it first hit for me - in 1980. The prime rate hit 21.5% (currently at 8.25%) and the country was experiencing double digit inflation. Mortgages got as high as 17.5%. As you all know, Bay Area Real Estate bounced back with a vengeance. It happened again in 1989, and guess what - same outcome. Why .. Because it's absolutely the best place in the World to live and work…..That's Why!

So where are we today? Well, it's not over…. And I am still watching and waiting for final outcome, but if history serves us…. And the current data stream continues , we are in it every day, all day and we track sales in the Bay Area like there's no tomorrow.

Thinking about buying? Do it now. Ok Ok, it may not be the perfect bottom….but all indicators that we see are showing that we are there. Yes, there are still problem areas like Stockton but I can happily say if the trend continues, that we do believe that worst is behind us!! Larry