By Alicia Lanier, REALTOR
As you may know, Coldwell Banker sells a lion’s share of residential real estate transactions in the Silicon Valley so daily and weekly reports provide a snapshot of activity throughout the area. This is a real benefit to agents and our clients in a market that has been moving up, down and even sideways.
An e-mail message today to Coldwell Banker agents from Joe Brown, president of the agency’s Silicon Valley-Monterey Bay Regions, is definitely worth passing along to you because of the recent spate of negative economic and housing news.
Here is a relevant portion of Joe Brown’s e-mailed report:
“S&P/Case-Schiller released its April, 2008 report this week and with it came the ever visible doom-sayers who predicted that home prices are poised to fall further in the coming months. In fact, the index reported that the price of a single-family home in April was 15.3% lower than in April 2007, the largest year-over-year drop since the index was created eight years ago. …
But as only we experienced Agents know, that was then, and this is now. The fact is that while S&P released its April statement this week, so too did other, more relevant (and more timely, might I add) indexes, including NAR which released its May report this week, noting several key glimmers of hope, including:
“Existing home sales—including single-family, townhomes, condominiums and co-ops—increased 2.0% to a seasonally adjusted annual rate of 4.99 million units in May from a level of 4.89 million in April.”
NAR President Richard F. Gayload released this statement: “Home buyers are starting to get off the fence and into the market, drawn by drops in home prices in many areas and armed with greater access to affordable mortgages,” he said.
It’s no question, in most areas, there is a large supply of homes on the market and therefore we remain in a market which favors buyers. In fact, it may take several months to draw that inventory down. But the fact that we are seeing rising home sales and a stabilization of home prices is a very good sign for our market.
Couple that with the fact that though seemingly devastating news, when indexes such as S&P release their statements, it also drives savvy investors into our market. … The REO market (bank-owned properties) is on fire, with a large number of REOs going into multiple offer situations. The impact seems to be greatest on our inland counties with Contra Costa reporting 43.3% of their sales were REOs while Sonoma reported that 26.6% of their sales were. It is much different on the coast where foreclosures were just 5.8% of the resale market in San Francisco and 4.5% in Marin County.
So, let’s take a look at our local markets:
Carmel/Monterey – Business is perking up for the Monterey Peninsula. We had 30 new listings and 30 new escrows in the last two weeks!
San Jose – Another market driven by REOs, San Jose continues to see a surge of activity with buyers continuing to get off the fence and write offers. In fact, our Willow Glen office reported that this week alone four of their listings went into multiple offer situations. Overall, San Jose seems to be having a steady balance of activity—nothing to write home to mom about but a nice, steady stream just the same. We are seeing increased activity at open houses and when buyers find a well maintained property that is priced at a “value,” they act.
Santa Cruz – Santa Cruz County, which, in some areas, has been driven largely by REOs, is experiencing a steady stream of sales. What this means for this market is that we are experience high sales volume as prices continue to dip. Buyers with large sums of money (many of them investors, which proves my point above), continue to surface and there is a lot of competition for well priced REO properties. This week alone we had five multiple offers within our Santa Cruz offices, all on REOs.
Los Altos Hills, Los Gatos and Saratoga – The market is active in most price ranges and types of homes. The multiple offers are at times up to 10% over asking on some of the most desirable homes in the better locations. And our Los Altos First Street office reported this week that 33% of their escrows went into multiple offer situations. New open houses are drawing 50+ groups a day. New buyers are coming to open houses and saying they are just starting the process which is great news for filling the pipeline of inventory. Overall, the law of supply and demand is once again in effect. Low inventory is driving this market. We are seeing quite a few multiple offer deals but, as a whole, they aren’t coming in radically over asking. And while, as you can see, the S&P reported that the market was down, this is skewed by the micro-markets in Silicon Valley that are thriving. ”
TIP: As Joe’s message illustrates, all real estate is local … and for today’s buyers, there are some outstanding opportunities. Joe sums it up clearly: “It’s a good time to buy…and maybe one of the best times since the early 90s.”
Alicia Lanier is a REALTOR, e-PRO, and member of the Coldwell Banker Sterling Society, the top 11% of agents internationally www.AliciaLanier.com 408-491-1634
