Hello Everyone,
Events in the Middle East had just about everyone guessing and the financial markets rocking and rolling this week. Gasoline again up around $4 a gallon. Dow Jones managed to eke out a small gain for the week after a dramatic drop on Tuesday, a big recovery on Thursday, and an unstable market on Friday with a triple-digit drop that was erased by the end of the day, leaving a .3% gain for the week. See Wall St Journal online:
http://online.wsj.com/article/SB10001424052748703300904576178612184267474.html
Freddie Mac, in a March 3 report, showed a current aveage rate for a 30 year fixed-rate mortgage (in the western region) of 4.83%, noting that this was the third week of improving mortgage rates. http://www.freddiemac.com/pmms/release.html
HSH.com, a financial publishing service, notes, in a February 25 article "That improvement is largely related to a flight-to-safety buy of Treasury bonds. Yields on ten-year US Treasuries (which influence fixed mortgage rates) have dropped by perhaps 20 basis points or so over that time, dragging mortgage rates in the same direction, if to a lesser degree." The article, referring to investors' reaction to the continued instability in the Middle East, goes on to say: "As long as the US remains the place to stash cash when these global events occur, at least some benefit will accrue to American mortgage seekers. However, these events and any benefits are of unpredictable duration, so folks actively engaged in the mortgage process would do well to move quickly to lock in rates and secure transactions." http://www.hsh.com/trends.html
Here in Marin County, there is quite a bit of encouraging real estate activity. One bit of news that looks disappointing at first but, upon further examination appears much more hopeful, is the spike in Days on Market (DOM) for sold properties. According to CB MarketQuest, average DOM for YTD sales of Single Family Residences (SFR) spiked from 117 in January to 160 in February. The numbers for Condo's were similar, 108 average DOM in January, jumping to 140 in February. In both cases, these numbers appear to represent the sale of properties that had been on the market for extended periods of time, significantly raising the average sales time when included with other recently sold properties. To understand this, we need to look at inventory levels, which remain persistently low due to many sellers' reluctance to place their properties on the market to compete with distressed sales that hold average prices down. In addition, the traditional spring sales period is still a few weeks in the future. According to MarketQuest, active inventory at the end of February was 552 units for SFR's and 212 for Condo's (differs from MLS figures due to how properties in contract are counted). For SFR's, this figure compares to 877 units in February of '10 and 935 in '09. For Condo's, the February '10 figure was 310 units and in '09, it was 329.
There has been a surge in buyer activity, with 244 accepted offers on SFR's and 87 on Condo's in February, both figures representing the largest numbers in over 2 years. This, according to MarketQuest's statistics, has resulted in a very low months supply of inventory (MSI) --- 5.5 for SFR's and 5.3 for Condo's. This attrition of inventory helps to explain the dramatically increased figures for DOM, as buyers with limited choices dig deep into the pool of older, unslold properties, and sellers with enhanced market awareness born of long experience make deals to put their properties in escrow. Please see attached SFR and Condo Market Action Reports for more numbers and details on the local market.
The popular City-by-City Analysis out this week shows 6 of 13 towns and cities covered as strong or very strong sellers' markets, with in excess of 35% of listed properties in contract.
Kentfield leading the pack, with an astonishing 47% in contract. Novato next in line with 41.73%, or 111 of 266 properties, and Corte Madera close behind, with 41.18%. Belvedere still at the bottom of the heap, but with a big improvement at 14.29% in contract compared to last month's 3.33%. Overall, 33.49% of SFR's and 32.6% of Condo's listed for sale on March 1 were in contract. (These figures from Marin County MLS). Sellers should be encouraged by these results but need to remain aware that this market is price sensitive and finely-balanced. Competition from distressed sales keeps a lid on prices, with, of course, exceptions for certain very special or unique properties. Lenders' appraisals continue to be very rigorous too. Not that unusual to see purchase prices adjusted downward following lender appraisal.
Locally, lots of agents looking forward to the spring market with anticipation. Professional REALTORS who know your market still the best source of information on your specific neighborhood.
More next time.
Until then, best wishes to all,
Fred
p.s. for access to spreadsheets see http://www.fredanlyan.com
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