Just those lazy hazy days of summer. While the stock market is gyrating up and down, the housing market is doing the lazy river cruise—-summer vacations, weddings, and bar-b-ques. It has slowed some since June, but not appreciably. At our current pace, July could be the fourth best month since last July.
We have seen the volume of multiple offers slow. Only 14% of our total transactions had more than one offer. The most number of offers peaked at four, and in some cases, the winning offer was under full listing price.
Open homes, particularly in San Francisco and parts of the East Bay (Berkeley, Piedmont and parts of Oakland) are still attracting good-sized crowds. A Berkeley listing priced at $800K had 140 buyers through its open house. A few other notable open homes were a Piedmont Ave. (Oakland) listing priced at $635K which had 110 visitors; two Crocker Highlands (Oakland) homes, one listed at $975K and the other at $1.195mil., attracted 80 and 55 groups respectively; a Noe Valley (SF) home listed at $1.298mil. had 120 buyers and a Bernal Hts. (SF) home priced at $749K had 55 visitors. Buyers are very active in these markets. Homes that have been on the market for sometime are seeing limited traffic, except when there is a significant price reduction. The majority of open homes are attracting between 10-20 buyers. Overall, positive for a summer market.
Well priced and eye-catching listings are attracting the most attention. A home in Yountville priced just under $ 1 mil. sold in 3 days. These well priced and well-presented listings sell quickly in spite of all the headlines. Sellers who garner offers soon after listing should heed the old saying “a bird in the hand is worth two in the bush.” One home in the Montclair area of Oakland received an offer during the first week on the market at 1% below asking price. The seller declined it thinking other offers would follow. Not so in this case. The buyer has now gone away and the home has been on the market for six weeks.
When will the market rebound? That is the million dollar question. A recent article in CNNMoney.com by Amanda Gengler explored this topic. Amanda asked a number of experts as to what are the signs of a rebounding market. http://money.cnn.com/2008/07/07/real_estate/price_to_rent.moneymag/index.htm?section=money_pf I have attached the article. The indicators were:
1) positive job growth
2) a shrinking housing stock
3) shrinking number of days on the market
4) prices falling at a slower pace
5) a shrinking ratio of housing prices to rents
6) a rising housing affordability index
At this point our market has 3 of the 5 mentioned—our housing stock has declined significantly since the beginning of the year—the affordability index has been increasing since the end of last year—and finally the pace of falling home prices has been diminishing. According to Ms. Gengler’s findings when the other three factors kick in, we will be headed for a rebound. One final note, it was pointed out that real estate is a local game. According to the National Association of Realtors, median prices for existing single family homes was actually higher than a year ago in a third of the country’s metro areas. The same variations exist here in our own market. One size does not fit all.
Summer is a great time for water sports. If you think you have challenges, check out these folks—-we all need a good laugh, enjoy! Just click on the link below.
Written by Avram Goldman, President and CEO Pacific Union GMAC Real Estate
Edited by Dan Joy
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