Hello Everyone,
(for access to spreadsheets, please see http://www.fredanlyan.com/ )
An interesting week. Fires elsewhere in the state sent a haze rolling into the County, obscuring views and smelling reminiscent of a smoky Scout camp-out. Temperatures spiked to 100-plus degrees and then plunged back to the 60's or lower and everyone dragged their jackets back out of the closet. Oil closed at record prices around $140 per barrel, and the Dow Jones Industrial Average plummeted again. Buyers were feeling far from relaxed and comfortable, and sellers were left wondering about the value in their homes.
Through all of this, the Marin County real estate market remained amazingly calm. Carolyn Said, in the June 27 SF Chronicle business section quoted USC's Raphael Bostic, saying that "San Jose and San Francisco were in the best shape of major California cities, with home prices flattening, instead of plunging like those in Southern California and inland." The thrust of the article was that the costs of owning a home are now nearly as low as the costs of renting in many areas, and that this should stabilize the market. Business Week obviously had a different opion, and ran an article under the headline "The Housing Abyss" "Why the worst may be yet to come---" http://www.businessweek.com/magazine/content/08_27/b4091032364818.htm?campaign_id=rss_daily
Newly appointed HUD Secretary Steve Preston has been quoted as saying he is optimistic about the passage of a bill currently in Congress to allow hundreds of thousands of qualified homeowners to refinance into affordable government insures mortgages.
And the Wall Street Journal ran a headline "Market's Fall Raises Fears on Banks"
So what is the truth, and what are we to think? Well, as a French friend of mine is fond of saying "Courage, mon ami." Times like this offer opportunity. A check with local mortgage brokers revealed that although rates last week hit their high for the year, they have receded significantly since then, due in part to the Fed leaving rates unchanged, and also to the selloff of the stock market which sent money fleeing to the relative safety of bonds, increasing the potential pool of mortgage money. The increase in FHA loan levels has had a significant positive effect on the availability of funds, and there is even a program called "203K" that allows buyers to purchase a home and then get extra funds to fix it up. Although lending guidelines have been tightened, money is available for qualified borrowers. And prices are very attractive.
Inventory for both single family residences and condo's remained relatively stable, and percentage in contract actually increased slightly in most market segments. 46 single family residences sold during the 7 days ending on June 24, not that far off the 52 that sold during the same period last year. As a result, the SFR YTD unit sales closed the gap a bit from -32% to -28%. During the same period, 16 condominium units sold, vs. 15 last year, narrowing the condo YTD unit sales gap as well, from -38% to -35.8%.
My opinion? Great opportunities in this market. If history is any indicator prices will be headed up and people will be telling stories about the one that got away.
more next week---
Until then, best wishes to all,
Fred
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