Hello Everyone,
The lender liquidity crisis struck home with the closing of Novato's Greenpoint Mortgage, an arm of Capital One. Over 400 people were laid off.
Although it is challenging to try to separate the normally slower August real estate market in Marin from the effects of the lender liquidity/mortgage meltdown problems, we should remember that we have a number of advantages here in Marin. Land is limited and there is not a great deal of new construction to saturate the market and compete with the sale of existing homes. There are a lot of individuals with a great deal of cash available. This is one of the most beautiful areas in the world, and is right next door to a world-class city. It will always be a desirable area. Does this make us immune to market forces? No. Is it a great buffer? Absolutely.
Buyers and sellers are trying to transcend the current uncertainty and decide on the best course of action. Some are waiting for the next meeting of the Fed to see if they lower interest rates, and how much. From the people I have talked to, it seems a good bet that the Fed will vote to lower, but it probably will not have an immediate downward effect on mortgage rates. It may help hold off further increases though. Normally, the financial markets automatically figure in the effect of future Fed actions, so the only time news has a really immediate effect is when the action is not what everyone expected. Then there is a correction.
Market conditions in Marin are a bit sluggish, with all segments of the Single Family Residence market in buyers' territory. Even the formerly red hot sellers' market in SFR's under $1million has cooled and is at 22.5% in contract--- a solid buyers' market. Condominiums, with one exception, are all deeply in buyers' market territory. The exception is the $1-2million segment which is comprised of only 16 listings, and is currently "balanced" at 25% in contract. Having said that, well-priced prime homes in prime areas are still selling quickly, sometimes with multiple offers and over asking price. Even in a buyers' market, not every property is an opportunity for negotiation. An experienced REALTOR with knowledge of the area is a prime asset in doing research and making offers in the current market.
Successful buyers and sellers are seeking the assistance of experienced real estate professionals. These savvy agents are scrutinizing loan arrangements very carefully and keeping tabs on loans constantly. Is the mortgage broker known and experienced? Is the lender solid? Has the buyer's pre-approval been updated? Within the last week?
Pricing, preparation, and presentation of homes for sale are absolutely critical in this market as is the willingness to negotiate. I heard a story today of a seller who turned away a buyer over a $5,000 impasse in negotiations. Shortly thereafter, the seller had a change of heart but the buyer had moved on. Offers from qualified buyers are worth their weight in gold!
More next week-------
Until then, best wishes,
Fred
p.s. for access to spreadsheets please visit http://www.fredanlyan.com/
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