SFResidence is part of the TRI Coldwell Banker office at 1699 Van Ness in San Francisco which is one of the premier offices in the City and has the market share numbers to prove it. We have some of the top agents selling real estate in the San Francisco Bay Area. As a result, our office posts some impressive numbers.

Here are the numbers posted this week: 7/23/08:

• 5 new listings (average price $1,249,800 - low $875,000, high $1,500,000 - 1 TBD)
• 8 ratified sales (pending) (average price $2,807,750 - low $473,000, high $8,750,000 - 1 confidential)
• 10 closed sales (sold) (average price $1,296,100 - low $378,000, high $3,495,000, 1 confidential)
• 1 reduced ($1,540,000)

- Mick Orton

Note: While Avram Goldman is no longer with Coldwell Banker, he is still a friend and associate at Pacific Union with an excellent handle on San Francisco Real Estate:

Just those lazy hazy days of summer. While the stock market is gyrating up and down. The housing market is doing the lazy river cruise—-summer vacations, weddings and bar-b-ques.  It has slowed some since June, but not appreciably. At our current pace, July could be the fourth best month since last July. 

We have seen the volume of multiple offers slow. Only 14% of our total transactions had more than one offer.  The most number of offers peaked at four and in some cases the winning offer was under full listing price.  

Open homes, particularly in San Francisco and parts of the East Bay (Berkeley, Piedmont and parts of Oakland) are still attracting good-sized crowds. A Berkeley listing priced at $800K had a 140 buyers through its open house. A few other notable open homes were a Piedmont Ave. (Oakland) listing priced at $635K had 110 visitors; two Crocker Highlands (Oakland) homes one listed at $975K and the other at $1.195mil attracted 80 and 55 groups respectively; a Noe Valley (SF) home listed at $1.298mil. had 120 buyers and a Bernal Hts. (SF) home priced at $749K had 55 visitors. Buyers are very active in these markets. Homes that have been on the market for sometime are seeing limited traffic, except when there is a significant price reduction. The majority of open homes are attracting between 10-20 buyers. Overall positive for a summer market.

Well priced and eye-catching listings are attracting the most attention. A home in Yountville priced just under $ 1 mil. sold in 3 days. These well priced and presented listings sell quickly in spite of all the headlines.  Sellers who garner offers soon after listing should heed the old saying “a bird in the hand is worth two in the bush”. One seller in the Montclair area of Oakland received an offer during the first week on the market at 1% below asking price. They declined it thinking other offers would follow. Not so in this case. The buyer has gone away and the home has now been on the market for six weeks.

When will the market rebound? That is the million dollar question.  A recent article in CNNMoney.com by Amanda Gengler explored this topic. Amanda asked a number of experts as to what are the signs of a rebounding market.

To quote a recent article from CNN Money, the indicators were:  1) positive job growth 2) a shrinking housing stock  3) shrinking number of days on the market 4) prices falling at a slower pace 4) a shrinking ratio of housing prices to rents 5) a rising housing affordability index (an increasing number of buyers that can afford to buy a home).  At this point our market has 3 of the 5 mentioned—our housing stock has declined significantly since the beginning of the year—the affordability index has been increasing since the end of last year—and finally the pace of falling home prices has been diminishing.  When the other two factors kick in we will be headed for the rebound that Amanda discusses. One final note, it was pointed out that real estate is a local game. According to the National Assn. of Realtors median prices for existing single family homes was actually higher than a year ago in a third of the country’s metro areas. The same variations exist here in our own market. One size does not fit all.

- Avram

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Mr. Weeks says about last week’s activity:

“IT’S A BEAUTIFUL THING, DIVING INTO THE COOL CRISP WATER.” Olympic Gold Medalist Dawn Fraser. Diving may be a beautiful sport at the Olympics, but it’s not a beautiful thing to watch in the Bond market. And that’s exactly what happened last week, as Bonds dove to their worst levels so far this year.

So what caused this belly flop to occur? Once again, inflation was the big culprit. While Bonds and home loan rates did begin the week in rally mode after the Federal Reserve announced that it authorized Fannie Mae and Freddie Mac to borrow directly from the Central Bank if they need additional capital, this confidence boost in the markets was short lived on the heels of important inflation reports.

On Tuesday, the Producer Price Index (PPI) report, which measures prices of goods at the wholesale level, revealed that the year-over-year PPI soared in June, marking the highest year-over-year rate since 1981. Also on Tuesday, the Retail Sales report, which measures the total receipts of retail stores, showed that retail sales increased much less than forecast. This may mean that the boost in sales received from the tax rebates may already be fading as consumers are focusing on paying for essentials…something that Wednesday’s news seemed to confirm.

What was Wednesday’s news? The important Consumer Price Index (CPI) report, which measures prices paid by consumers like us. It showed that prices overall are up 5% from a year ago, the biggest year-over-year rise since 1991. This probably comes as no surprise as you look at your own monthly expenses, particularly the amount you’re likely spending these days on groceries and at the gas pump.

Bond prices and home loan rates continued to worsen through the week as no other news or reports could help them shift course. With inflation and tough overhead technical resistance proving to be strong competitors against any improvement, home loan rates generally ended the week around .375 percent worse than where they began.

Read the entire report here.

- Foster Weeks

SFResidence is part of the TRI Coldwell Banker office at 1699 Van Ness in San Francisco which is one of the premier offices in the City and has the market share numbers to prove it. We have some of the top agents selling real estate in the San Francisco Bay Area. As a result, our office posts some impressive numbers.

The summer market is here. Things are leveling off and will probably remain slow until school starts.

Here are the numbers posted this week: 7/16/08:

• 7 new listings (average price $1,784,571 - low $749,000, high $3,995,000)
• 8 ratified sales (pending) (average price $1,856,875 - low $775,000, high $3,200,000)
• 8 closed sales (sold) (average price $1,548,563 - low $608,500, high $2,950,000)
• 1 reduced ($1,195,000)

- Mick Orton

Note: While Avram Goldman is no longer with Coldwell Banker, he is still a friend and associate at Pacific Union with an excellent handle on San Francisco Real Estate:

As expected the July 4th week was a bit slower.  I am surprised it didn’t come to a screeching halt given all the cheery news from the stock market and the cloud over the financial markets. However buyers still enjoyed going to open homes. Believe it or not a 2 bedroom 1 bath home in Piedmont listed for $875,000 attracted over 200 people. In spite of the holiday weekend many open homes had good traffic. The number of buyers averaged 8-30 groups, with most in double digits.

Multiple offers slowed, but still 20% of our transactions were involved in multiples. All of these coming from the San Francisco and East Bay markets. The majority of multiple offer transactions went over full asking price. The bulk of sales fell under the million dollar price range. This follows the trend in the first half of the year.

There is a great deal of uncertainty in the secondary market which is creating a volatile environment for mortgages. Hopefully with the Treasury now standing behind Fannie Mae and Freddie Mac some stability will return to the markets. The good news for me is that there are a good number of buyers out there with steel in their veins. I am sensing that those in the housing market today, whether buying to live in a home or investors, are feeling that buying property is making better economic sense now than the stock market. I think this is the only reason that the housing market still has a pulse. 

I think investors are coming back in the market as home prices have dropped and the rental market has become tighter. Rents have been increasing as the demand for available rental housing has increased.  Also with dropping prices housing affordability has increased greatly in spite of rising interest rates.

What the market needs now is a spot of “What if”.  The media keeps focusing on the negative—high oil prices—falling stock prices—increasing interest rates—failing banks—the litany goes on.  What this does is creates a perception that we are “going to hell in a hand basket”.  Yes, the economy is not in good shape, but it is also not atrocious.  We still have 94% of the working population employed. Consumer spending is still at reasonable levels. Plus you had to wait three hours to purchase a new I-Phone. 

O.K.—let’s play the “What if “game. What if consumers thought the bottom of the real estate market was right now. What if consumers felt that the worst of the banking fiasco was behind us.  What if the public realized that things will not be robust, but will bump along through 2009 with the economy picking up steam at the end of 2009.  What kind of impact would that have on the economy?

I think the headlines and the pundits have a great deal of influence on how we think—whether it is real or not.  It is rocky out there, but not fatal. I remember in past stressful economic times it was difficult to remain level headed, but that is exactly what is needed now.  We are constantly sorting for the negative. How about let’s look at a few of the positives. Interest rates are still at historic lows, the vast majority of people are employed. We will need to be more conscience of our spending habits, but it is not the end of the world. We have far too many voices saying “the sky is falling”.  The sky is not falling , we are just going through some storms. One of my manager’s said it best with a quote from Maya Angelou “I’ve learned that no matter what happens or how bad it seems today, life does go on, and it will be better tomorrow”.  Let’s focus on the “What if”.

 - Avram

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Mr. Weeks says about last week’s activity:

…while the summer’s fireworks started in full force on the July 4th holiday, they continued daily last week in the financial markets as Bonds and home loan rates ignited and began the week by improving sharply. This early-week rally was sparked by a speech made by Fed Chairman Ben Bernanke, who said that the Fed may continue to provide emergency loans to investment banks to help them overcome credit problems. This led to improvement in the Bond market because the markets saw this as a sign that the Fed is willing to take action to maintain stability and counter any turbulence or explosions that may occur.

And speaking of explosions, some explosions in the Middle East helped douse the rallying flames mid-week after Iran test fired nine medium- to long-range missiles, one of which has the range to reach Israel. The instability of that situation…and new testimony by Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke before the House Financial Services Committee regarding ways Congress can overhaul the financial regulatory system to prevent future crises (the first hearing of its kind)…caused the improvements in the market to fizzle as Traders watched and waited for the finale these events would cause.

As it turned out, last week’s finale was a bit of an implosion. Despite Paulson’s encouraging words about Fannie Mae and Freddie Mac, Bonds and home loan rates worsened after reports on Friday that the government is considering a plan to take control of both companies if financial problems threaten their collapse. Stock prices of Fannie and Freddie would essentially become worthless if this happens, and Stocks and Bonds both reacted poorly to this news as investor confidence plunged.

Also, another record high for oil (remember higher oil prices means higher inflation, which is the arch enemy of Bonds and home loan rates) added to the implosion and worsening of Bonds and home loan rates on Friday. However, when all the smoke cleared, Bonds and home loan rates still managed to end the week slightly better than where they began.

Read the entire report here.

- Foster Weeks

Recently we posted our opposition to AB 2678 (proposed by Nunez) to make energy inspections at time of sale on properties mandatory. Here was Jared Huffman’s response to our e-mail campaign:

Thank you for contacting my office to express your opposition to AB 2678 (Núñez) regarding energy audits upon time of sale in real estate transactions. I agree with you that this requirement is problematic and could have a negative impact on the real estate market. Energy audits need to occur in a comprehensive manner, not just at the time of sale, and should include incentives for energy conservation and use of renewable energy sources.

For these reasons I did not support the bill when it before me for a vote in the State Assembly.  AB 2678, however, was approved by the Assembly and is currently in the Senate Committee on Appropriations. I will keep your thoughts in mind should this bill come before me for a vote of concurrence in the Assembly.

Thank you for alerting me to your concerns and please continue to share you thoughts and ideas with me in the future through my Marin County District Office staff.

Jared Huffman
Assemblymember, District 6

SFResidence is part of the TRI Coldwell Banker office at 1699 Van Ness in San Francisco which is one of the premier offices in the City and has the market share numbers to prove it. We have some of the top agents selling real estate in the San Francisco Bay Area. As a result, our office posts some impressive numbers.

Now that summer is here, so are the new listings. For the first time in a long time, we have 15 new listings averaging over $1.5M. Although ratified deals reported are only 4 this week, we were told that actually there were over 14 deals made that didn’t make the sheet.

Here are the numbers posted this week: 7/9/08:

• 12 new listings (average price $1,523,000 - low $499,000, high $4,900,000)
• 4 ratified sales (pending) (average price $772,000 - low $555,000, high $1,199,000)
• 7 closed sales (sold) (average price $1,850,143 - low $559,000, high $7,000,000, 1 confidential)
• 1 reduced ($600,000)

- Mick Orton

Note: While Avram Goldman is no longer with Coldwell Banker, he is still a friend and associate at Pacific Union with an excellent handle on San Francisco Real Estate:

Hope everyone had a fun, safe and restful Fourth of July weekend. In spite of all the challenges we have in the world, America is still the land of opportunity and magnificent individual freedoms. We all thank those who have given the ultimate sacrifice so that we may have this wonderful country. We have much to be thankful for.

Amazing, half the year is gone. It has been like “Mr. Toad’s Wild Ride”. We started 2008 in the tank. The sub-prime fiasco was in full swing. We were facing the possibility of substantial investment houses going under.  The housing market was coming to a screeching halt. Inventories in the Bay Area were reaching levels that not seen since the early 80’s and 90’s—San Francisco the best of markets —was just about a 5 months supply of inventory and Napa and Solano counties were in the low 20’s. Price ceilings were coming down to 2004 or 2005 levels. Loans were almost impossible to obtain as new guidelines were looking at the potential income stream of yet unborn generations.

Much has changed since January. You wouldn’t think that reading today’s headlines. However, headlines are just that—ways to get readers attention. The economy is wobbly no doubt. Unfortunately, most of it is in minds of consumers. Yes, oil is taking its toll and the dollar once the strongest currency in the world, is taking a beating. There is the upside—our products are more affordable around the globe. The debate of–is it or isn’t it a recession–drives me crazy. I said in January we were in a recession.  The public needs to know. Can’t understand why the government is skirting the issue. Oops—I forget—we have election year.

Somehow the media has not dug deep enough to understand exactly what is happening in the Bay Area real estate market.  Remember I said that at the beginning of the year we had inventories in most counties in double digit months. Now looking at the end of the first half of the year. Those once bulging inventories have come down considerably. The highest monthly inventory supply is now at 6.2 months in Napa county. The majority of the counties are now between 4-5 months. That is a far cry from January. Here are the numbers from around the Bay: San Francisco at 3 (4.8) months, San Mateo 3.2 (8.1), Sonoma 4.2 (11.2), Marin 4.3 (8.4), Santa Clara 4.3 (11.2), Solano 4.5 (22.8), Contra Costa 4.7 (17.8), Alameda 5.0 (11.8) and Napa 6.2 (21.3). The numbers in the parentheses are the peak of supply of monthly inventory in each county which occurred sometime between 9/07-1/08 depending on the county. As you can readily see, there is a substantial difference from the current supply compared to the peak month.

This does not mean we are out of the woods. What it does indicate is that homes are still selling and that the inventories that were swelled with REO (bank-owned properties) and short sales are being depleted. Banks, although still moving slowly, are of the mindset to get out of the real estate business.  We are now seeing multiple offers on some of these lower-end properties from both first time buyers and investors. Prices have come down appreciable to stimulate this section of the market.

The strongest evidence of this is how steeply prices have dropped in the lowest average sales price markets of Solano, Napa, Sonoma, Contra Costa and Alameda counties.  Median and average sales prices have declined year over year in these counties anywhere from 20-42%.  The bulk of these significant changes are due to the high volume of sales in properties under $500,000.  The numbers of units sold under $500,000 YTD this year compared to last are up significantly.  I will give you the decline of median and average prices in these counties and the unit growth of sales for those properties under the $500,000 price point. The first number given is median price %/the second is average price % decline. In parentheses will be the percentage growth of sales units under $500,000.  Here we go:     Contra Costa         - 39%/-34% (+72%), Sonoma -31%/-27% (+36%), Napa -29%/-37% (+62%), Solano -29%/-31% (+42%) and Alameda -23%/-20% (+38%).  The lower end sales have dominated those market places. All I am saying is when looking at average and median prices the declines in price levels may not be as steep as is indicated. The price drops may be skewed by the number of sales as you can see above. Dramatic numbers, but very little interpretation by the media. 

When you look at the highest average and median sales price counties we see a different picture. Prices have dropped less because they have not been dominated by the sub-prime mortgages. In fact average sale price in San Francisco has actually gone up. Here are the numbers for the rest of the counties San Francisco   -3.6%/+3%, San Mateo -7.4%/-8%, Santa Clara -10%/-7% and Marin -11%/-8%.  These declines were much less because the $500,000 properties are a smaller portion of overall sales comprising of anywhere between 12-24% of those markets. The difference between these two worlds was the easy money mortgages and the large supply of inventories that were sold due to new home building. It created a bubble in those markets and the air came out.

There are other trends that should be noted that show some light at the end of the tunnel. In the month of June every county was up over last June in homes under contract (pending sales) with one exception and that was San Francisco , but it was down only 1.32%.  Solano county was up 212%, Napa +114%, Contra Costa +94%, Sonoma +80%, Santa Clara +24%, San Mateo +24%, and Marin +11.4%.  The trend over the last 90 days for pendings has been steadily going up in every county except San Francisco which has been flat.

Solds were up in three counties over last June—Solano +38%, Contra Costa +14% and Sonoma +11%. The lower end is at work. The rest of the counties were down between 17-25% over last year. The trend over the last 90 days in solds has four counties going steadily up and five flat or slightly up and down.  That pattern of bumping along the bottom.

What all these numbers show is the market is not dead nor is it brilliantly healthy. We have a wide variety of markets. Some hot, some cool and some just right. Inventories are being held in check because the number of new listings coming on the market staying constant or declining.

We are coming into a period which I call “the summer trough”. I would expect sales to dip as they have over the last 20 plus years. I am also projecting a much better fall market than last year for several reasons: inventories will be smaller, buyer demand has been increasing and continues to build, and, lastly, we will be getting close to the election ( always good for real estate sales ).

Next year will probably not be much different from this year. That is o.k. by me, as I see this market much more active than those of the 80’s and 90’s.  I will offer this caveat to sellers—buyers are looking for value, both in price and condition. Those houses that bring both to the market sell quickly. Those that don’t, linger.  Beware of seller-assisted pricing. That is where the seller says, “I know my house is worth it—it is special”. Many of these sellers find out that the market is a better predictor of price than any individual, especially the seller, who is personally invested.

For buyers the tone is that there are good values in the market, but remember value is determined by demand, if you find yourself in a multiple offer your chances of getting the home by offering less than the asking price is slim to none. Yes, in many transactions you can negotiate—that is the beauty of this kind of market, but remember, negotiation is a give and take process. If buyers and sellers understand this, then the transaction has a great chance of consummating itself.

This is the kind of a market that if you bought your house 3-4 years ago or longer you are still fine. For those that didn’t, it is best to wait it out.  Those that are willing and able to buy this year and next will be geniuses in 5-10 years.  They will talk about how smart they were to buy now. We have seen it before and we will see it again. Now it won’t be the huge double digit appreciation of 2003-2005, but it will be very acceptable single digit appreciation that will lead to long term gains. And don’t forget, there are some nice tax benefits with home ownership and most importantly it is a home and our piece of the rock.

- Avram

SFResidence is part of the TRI Coldwell Banker office at 1699 Van Ness in San Francisco which is one of the premier offices in the City and has the market share numbers to prove it. We have some of the top agents selling real estate in the San Francisco Bay Area. As a result, our office posts some impressive numbers.

Everything is moving in slow motion. Take a look at our market numbers for closed sales in June and you will see that days on the market increased in all categories we track meaning buyers are taking longer to make offers. There is not the frenzy of several years ago where properties were being snapped up so quickly that only preemptive or significantly over asking price offers in multiple offer situations would get buyers the home they were after. Buyers were settling just to get “something”. Not so today. As we head into the 4th of July weekend, the activity reflects the official arrival of summer with a typical seasonal slowdown.

Here are the numbers posted this week: 7/2/08:

• 1 new listings ($1,295,000)
• 7 ratified sales (pending) (average price $1,041,000 - low $450,000, high $1,750,000)
• 12 closed sales (sold) (average price $1,247,900 - low $496,000, high $3,400,000, 2 confidential)
• 1 reduced ($600,000)

- Mick Orton