Hello Everyone,
I love the following quote from John Walsh, president of La Jolla-based Data Quick, a real estate information service. The article in which it appeared was dated August 16. Full text available at
http://www.dqnews.com/Articles/2011/News/California/Bay-Area/RRBay110816.aspx
Speaking of the Bay Area housing market, Mr. Walsh stated:
"We’re still looking at a dysfunctional market. Distribution curves are lopsided, bottom-feeding is still prevalent and the lending market is just plain weird. We’re off bottom by all metrics, but far from anything resembling normal,"
Normally, the local real estate market takes a bit of a vacation, along with everyone else, in July and August. But this year, it took a bit more of a vacation than usual, with Bay-Area home unit sales decreasing 13.9 percent from June, compared to a historical average of 6.8 percent since 1988. (from DQ statistics)
With all the financial drama from the debt cap debacle and the constantly publicized continuing concern over the stability of the Euro and certain countries' solvency all being reflected in Wall Street swoops and dives, it is nearly impossible to tell whether we are climbing out of a familiar hole or falling into a new one! The media hype tends to engender fear and paralysis and many people find it difficult to make a large financial commitment in the face of such uncertainty.
Meanwhile, people who need homes and have faith in the economy are buying and they are getting great deals on two fronts. First, prices are more attractive than they have been in years, and second, interest rates are at historic lows. Buying property now, especially in Marin County, seems like a complete no-brainer. Many buyers who take time to do the math find that with the tax benefits and the low prices and loan rates , they can buy more cheaply than they can rent---and they won't lose their security deposit for hanging pictures on the walls! The truth is that while housing prices have been falling, rental rates have often increased.
Sellers wondering what's in it for them in this market can look to the low current levels of housing inventory for sale in Marin County. According to Coldwell Banker MarketQuest, inventory for Single Family Residences (SFR) at the end of July was down 19.3% from June, and 38.8% from July of 2010. Similarly, Condominium inventory was down 11.8% from June, and down 22.2% from July of 2010. These reduced levels of inventory create more demand and more competition for the properties that are on the market and more opportunities for sellers.
YTD unit sales of SFR's in Marin County were 1186 as of August 16, compared to the year-ago figure of 1161, up 2.2%. Average sold price was down about 4.6%, from $1,051,462 as of 8.16.10 to $1,006,672 on the same date this year, and days on the market (DOM) for YTD sold properties was 106 this year vs. 87 a year ago. The figures for condo's were: YTD unit sales as of 8.16.11--334, compared to 304 on 8.16.10, an increase of 9.2%. Average YTD condo sold price down 6.4% from $396,364 in Aug of 2010 to $370,939 on 8.16.2011, or -6.4%. As we have mentioned a number of times previously, unit price declines are not entirely attributable to declines in value but also have to do with "market mix", meaning less expensive homes are selling in greater numbers, skewing the averages. Percentage in contract for SFR's under $1million at 37.98%, down only slightly from 39.79% at last report, still considered a sellers' market. Higher-priced SFR's in the $1million to $2million and $2million to $3million ranges went up by 1 to 2 percentage points, but still in 'Strong Buyers' territory. Properties over $3million dropped from 11% to only 6% in contract over the last two weeks. Higher-end SFR's continue to represent a trememdous opportunity for buyers with money to spend. Percentage in contract for condo's under $1million (all but 15 of them) also down slightly from 37.12% at last report to 35.67% on August 16, hanging in to sellers' market territory by a gnat's breath.
Business at local brokerages brisk over the past couple of weeks. Lots of talk about listings with multiple offers. This is still not the rule, by any means, but attractive, well-priced and well-located homes often become the object of buyer competition. Investors continue to snap up properties. According to the DataQuick, article, "absentee buyers---mostly investors--purchased 21.2 percent of all Bay Area homes sold (in July), up from 20% in June, and 17.4% a year ago". The article goes on to state that all-cash buyers "accounted for 26.3% of sales in July, up from 26.0% in June, and up from 25.1% a year ago.------ the monthly average is 11.9% since 1988". All things considered, the local real estate market seems very much alive. More next time.
Until then, best wishes to all,
Fred
p.s. for access to spreadsheets, please see my website
http://www.fredanlyan.com
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