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.

What a difference a week makes. The market is doing relatively well, considering all the negative news from the economy. People still seem to have money to buy homes, and are doing so… in San Francisco. Look at the numbers and you will see a strong number of new listings, an equal number of ratified sales and almost as many closed sales. There is a feeling that the housing package will not really affect San Francisco since our prices are too high for the low loan limits of the government programs.

Here are the numbers for the week of 3/11/09:

Read what Rick Turley, President of Coldwell Banker, San Francisco/Peninsula says in his latest weekly report:

Foreclosure Prevention Plan Guidelines Revealed

Earlier this week, the Obama administration released the guidelines which enable lenders to begin modifications of eligible mortgages under the administration’s Homeowner Affordability and Stability Plan.  Here is a summary of the guidelines, direct from the Department of Treasury:  http://www.treas.gov/press/releases/reports/guidelines_summary.pdf.

This “foreclosure prevention plan” (dubbed by the media as such) is estimated to help some seven to nine million homeowners make their mortgages more affordable and help to prevent the continuation of the devastation that foreclosures have caused in this country.

According to the U.S. Department of Treasury, “The Home Affordable Refinance program will be available to 4 to 5 million homeowners who have a solid payment history on an existing mortgage owned by Fannie Mae or Freddie Mac. Normally, these borrowers would be unable to refinance because their homes have lost value, pushing their current loan-to-value ratios above 80%. Under the Home Affordable Refinance program, many of them will now be eligible to refinance their loan to take advantage of today’s lower mortgage rates or to refinance an adjustable-rate mortgage into a more stable mortgage, such as a 30-year fixed rate loan.

“GSE lenders and servicers already have much of the borrower’s information on file, so documentation requirements are not likely to be burdensome. In addition, in some cases an appraisal will not be necessary. This flexibility will make the refinance quicker and less costly for both borrowers and lenders. The Home Affordable Refinance program ends in June 2010.

”The Home Affordable Modification program will help up to 3 to 4 million at-risk homeowners avoid foreclosure by reducing monthly mortgage payments. Working with the banking and credit union regulators, the FHA, the VA, the USDA and the Federal Housing Finance Agency, the Treasury Department today announced program guidelines that are expected to become standard industry practice in pursuing affordable and sustainable mortgage modifications. This program will work in tandem with an expanded and improved Hope for Homeowners program.

With the information now available, servicers can begin immediately to modify eligible mortgages under the Modification program so that at-risk borrowers can better afford their payments.”

Industry online magazine, RISMedia, weighed in on the plan this week and offered this insight that I thought would be helpful:  http://rismedia.com/2009-03-04/how-to-help-homeowners-understand-obamas-foreclosure-plan/

I know that many clients have a lot of questions right now and we are working to gather some communication tools to help.  One good option in the meantime is a consumer-friendly Q&A recently put together by the Treasury Department, the U.S. Department of Housing and Urban Development (HUD) located at http://www.financialstability.gov/makinghomeaffordable/.

Now, let’s take a look at this week in our local real estate:

• East Bay—Our Berkeley office reported 75 visitors to a Crocker Highlands listing, though traffic was rather slow at our other open houses.  Berkeley was recently named #1 suburb in which to sell a home by Forbes.  The article reported “Prices are up 9% this year, with homes selling for a median price of $790,986…it may not be a boom, but given regional problems, it’s a good market to be in.”  Castro Valley reports that buyers are snatching up well-priced listings in light of dwindling inventory.  We are selling some of our aging listings and our new listings are going pending quickly. We sold two of our aged listings this week and two other listings were sold soon after hitting the market.  Danville reported that one of our San Ramon listings, listed in the high six hundreds (not an REO or short sale) had six offers.  The Oakland-Piedmont office reports open house activity is picking up.  February was a strong month for sales in this office in all price ranges.  The $600,000 to $700,000 is very hot.  Short sales are now in all price ranges.  Foreclosures are almost all in the lowest of the price range.  Multiple offers in the foreclosures are about 30%.  Orinda reported this week that we are having a lot of people come through our open houses, especially as we are working on reducing asking prices with sellers. 
• Monterey—The market has remained the same for the past few weeks.  Many Agents are working with potential buyers who are reluctant to get into contract on a property as they believe the prices will continue to go down—unless of course, they see a particular property that appeals to them and it appears to be a great value.
• North Bay—Greenbrae reports that even despite the rain, serious buyers were out in full force.  Southern Marin shares that activity seems to be picking up across the board.   Sales are in the low end – and the very high end, but the $2-3 million category seems to be the softest of all price categories.  The Petaluma office reports that open houses are well attended.  Activity was high even during the rainy Sunday.  One property that was on the market for one day priced at $599,000 received six offers that same day.  Multiple offers continue in the lower priced properties.  Santa Rosa reports that one Agent reported three groups at his open house and had one offer.  Three other Agents reported that they were shut out at their open.  Probably the rain.  Still seeing the under $500,000 as the white water of the market but each week we are seeing more and more properties hitting the market above $500,000 and some are now drawing offers.
• Peninsula—Burlingame shares, “It’s all about price, price, price.”  Everyone wants a deal.  Agents are trying hard to price things correctly with their clients and finding that the buying public wants even less.  Media perception and continued negative press aren’t helping matters.  Open homes were all over the map this week.  Some had only two—others had 80+ people walk through.  Half Moon Bay reports good open house activity even with all of the rain.  One Agent had a sale over the $1 million mark with seven counteroffers.  Everyone remains upbeat looking forward to the completion of the tunnel and a brighter economy.  Our Menlo Park Santa Cruz Avenue office reported properties under the $2 million mark are getting buyer’s attention.  One Menlo Park listing at $1,950,000 sold.  Another listing in the Skyline area listed at $1,350,000 sold as well.  Palo Alto reports open house activity has been dreary—consistent with the weather.  The number of sales overall on MLS is extremely slow.  For the clients, there is no reason to sell.  They’re in the neighborhood they want to be in and because it isn’t a great market, they are not selling—we have a log jam.  San Mateo shares that although we are holding our own, buyers are having difficulty making a decision.  They seem to have a “you first” attitude.  It is hard for buyers to make a decision to move forward.
• San Francisco—Our Lombard office reported a good week as well as good February sales.  We doubled ended three deals thanks to open houses.  The traffic is picking up in the $1.5 to $3 million range, but this interest pick up hasn’t translated to transactions yet.  Our Market Street office reported that a property listed in the Mission district received 20 offers.  It was listed at $549,000 in move-in condition and had one weekend of open houses. Overall, not a bad week for the City with our offices reporting a total of 34 sales for the week.
• Santa Cruz—The office had several great new listings priced from $300,000 to $7.5 million.  There is a lot of potential listing activity and appointments.  Many of the sellers are in a short sale situation.  Our March sales are starting out stronger than last month so we will see how consumers continue to move forward buying—it certainly is the best time in many years.  For sellers, the market continues to be driven by prices.  This is an important fact to consider when sellers put their home on the market.
• Silicon Valley—Our Los Gatos office reports that we have a lot of buyers but we’re having a hard time getting them to step up.  We’re also seeing challenges with interested buyers who are trying to qualify for a loan.  The San Jose Main office shares that we’re seeing good open house traffic.  We’ve seen increased interest in lower-end priced properties between $250,000 to $500,000.
• South—Our Hollister office reports that short sales are now being well attended to in a more timely manner.  Agents are back to investigating short sales with a positive attitude.  We saw an increase in new REO listings this week.  Our Morgan Hill office reports that Agents are reporting an increased number of guests at open houses.  It seems that potential buyers have graduated from the “lookie loo” mentality to that of seriously considering a future purchase.  Though, as one Agent recently said, “I have to get buyers from sitting on the fence to walking into the front door.”

The news of the week should bring comfort to millions of American homeowners, and for the real estate sector, it is just what the doctor ordered.  It is imperative that we continue to move with speed to make housing more affordable and to help stop the spiral in our housing markets.  I believe that this plan will encourage additional loan modifications and will ultimately reduce the foreclosure rate.  In the end, this is one—and possibly the most important—way to stabilize prices and once again get us moving in the right direction.  Helping families keep their homes is critical, both for the health of our economy and for neighborhoods across the country.

It’s very clear that the American economy cannot be turned around without fixing the housing crisis.  With the recent release of the second half of the TARP funds coupled with the Emergency Economic Stabilization Act and now the Homeowner Affordability and Stability Plan, the housing sector now has a foundation on which to build.  Politicians, economist and media still debate daily as to if some of these steps are the right steps; however I do believe that we are headed in the right direction.  On a local level, we’re already starting to feel the initial flow of these benefits.  In a broad sense throughout our San Francisco Bay Area offices, we are seeing increased floor activity and increased open house activity. Many Buyers are now inquiring about the first time home buyer credit, the increase in conforming loan limits, and seeking counsel on how to best position themselves in order to buy.

Rick Turley
President

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:

“A good objective of leadership is to help those who are doing poorly to do well…And to help those who are doing well to do even better.” — Jim Rohn. Let’s hope that some of the actions that the Obama Administration took last week — intended to help millions of US homeowners — will show that kind of leadership for our country, as last week’s Jobs Report and Stock Market losses showed that help is certainly needed.

Wednesday brought more details on the new “Making Home Affordable” program, which was created to help as many as 7 to 9 million homeowners who are making every effort to remain current on their mortgage payments. There are two important parts of this plan: The first of these is a program that is available to homeowners who have a solid payment history on an existing home loan owned by Fannie Mae or Freddie Mac, but who have been unable to take advantage of today’s favorable rates because their homes have lost value. A second program, which involves loan modification, will help at-risk homeowners avoid foreclosure by reducing monthly payments. Give me a call, so we can help determine if either of these programs may be right for your situation.

Making it tougher for many to keep up with house payments, Friday’s Jobs Report showed that 651,000 US jobs were lost in February, while revisions for the past two months showed that an additional 161,000 were jobs lost between December and January. December’s decline was the largest since 1949. What’s more, the US economy has now lost almost 4.4 Million jobs since the recession began in December 2007, which is the biggest employment malaise of any economic downturn in the postwar period. In addition, the unemployment rate soared to 8.1% versus expectations of 7.9%, the highest rate in over 25 years, as you can see in the chart below.

Read the entire report here.

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.

We had another pretty good week. The real estate market in San Francisco is active despite the rainy weather and state of the economy. Apparently some people still have money. In fact, it may be that investors have more confidence in real estate than they have in the stock market. There are deals to be had and buyers have more negotiating power than they’ve had in a long time.

Here are the numbers for the week of 3/4/09:

Read what Rick Turley, President of Coldwell Banker, San Francisco/Peninsula says in his latest weekly report:

It May Be Time to Get Off the Fence!

With the Economic Stimulus Package and the Foreclosure Prevention Plan underway, many Americans are anxious to move forward, realizing that there will still be weeks and months of discussion and fine-tuning before all elements will be understood.  At the end of the day, some elements will be popular with the majority, perceived as helpful to our recovery – and some elements will remain under heavy criticism and largely unpopular. It’s the American way.  But I hope most will agree that it’s time to get back into a position where we feel secure, where we feel confident and where we can once again make strong decisions regarding our future…and that includes decisions we make about real estate.

Many buyers have been on the sidelines.  They’ve been waiting to see what will happen to interest rates and to see what the results of the Economic Stimulus Package would be.  Some have been on the fence regarding a personal real estate decision even though their down payment and their jobs have been safe and secure.  You can’t really blame them for being cautious – but things are definitely starting to change at the entry price levels. Most new offerings listed at a competitive asking price are receiving multiple offers again. Many older listings that have taken notable price reductions are experiencing the same thing.

Now I realize that every individual situation is different so please don’t take this as a broad based brush that I am painting with, but what I can say is that buyers may truly be in one of the best positions than they have been in some 50 years to purchase a home.  Consider the benefits to today’s homebuyer:

• New $8,000 first time home buyer credit (and in most cases, the buyer does not have to repay the tax credit).
• Reinstatement of FHA, Freddie Mac and Fannie Mae loan limits.  These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750.
• Historically low interest rates.  In my February Reality Check message I shared with you how changes in mortgage rates can affect a consumer’s purchasing power.  The fact is, right now interest rates are low—certainly by historical standards—and those low rates translate to increased purchasing power for buyers. 
• Though we’ve seen decreasing inventory in many of our markets over the last several weeks, we still do have quite a bit of inventory in many markets.  This translates to more choices for buyers.  We are also anticipating that Spring will bring on a lot of good, new inventory for us and that should bring in a surge of new buyers—for today’s buyer’s, that’s competition for you.

My point is that Buyers may not want to make the mistake of waiting.  Sitting on the sidelines could cost plenty in terms of higher housing prices, increased competition, fewer choices and higher interest rates.  We live in one of the most desirable areas in the world and regardless of the recent slowing in the market, there is still high demand where value is perceived –normally value is perceived with respect to condition and competitive pricing.  Reading on, you’ll note a surge in multiple offers at the entry-level price points.

Let’s take a look at our past week in Bay Area real estate:

• East Bay—Berkeley shares that Agents are desperate for new listings to show their ready, willing and able buyers.  Berkeley tour is still anemic, not much to show buyers in many neighborhoods.  One Berkeley property just received 13 offers and happily we had the winning offer.  The Castro Valley office reports that the local market was slow this past week.  Lack of inventory is holding prices steady but there is nothing new out there for us to sell.  The inventory is so low that well priced homes are being snatched up immediately.  Danville is seeing some bright spots in the upper-end.  For the second week in a row, a number of our new sales were in the high-end:  four sales above $1,000,000 and one sale about $2,000,000.  Fremont shares that our current market is busy with REO and short sales.  We have had several multiple offers regarding the REO and short sale deals.  We have picked up for this week compared to last and are hoping for it to continue.  Livermore provided the Tri-Valley update with Livermore figures standing out as the shining star:  active inventory is down 3.5% and total pending sales are up 16% since the first week of January.  Pleasanton active inventory since the first week of January is up over 28% and total pending sales are up 25%.  Dublin active inventory and total pending sales has remained stable in 2009.
• Monterey—With listing inventory steady, sales activity is on the rise.  We’ve had a few more sales in the last few weeks, but most are in the lower price ranges.
• North Bay—The Greenbrae office reports more contingent sales.  Sellers are much more reasonable with prices as new homes get ready to come on in Spring.  There is a movement and an upswing in activity.  Our San Rafael office reports that there is plenty of activity at open houses.  Agents are showing property, but the number of buyers writing offers has slowed in the past two weeks.  It feels as if there is going to be a surge of new business about to explode due to the increase of buyers’ previewing and the number of Agents qualifying buyers with Princeton Capital loans as of late.  Santa Rosa shares that for the third week in a row, conventional new inventory has come on at a slightly higher rate than distressed properties.  Seeing some of the closed properties that were in multiple offers, we find that many banks took less than the highest offer in favor of cash or large downs—sometimes leaving more than $50,000 on the table.  Sebastopol shares that the rain kept the lookie- loo’s at home this past weekend but the buyers weren’t bashful about writing offers.  They had 13 sides on 11 properties which went into contract.
• Peninsula—Our Burlingame office reports that some days are full of hope and some days are disappointing as the buying and selling public react to the media and the stock market.  We are seeing sales and listings increase, however.  Some financing difficulties exist with lenders asking for larger down payments or modifying terms at approval time.    Half Moon Bay shares that it was a slow week on the coast although the open house attendance was good.  Everyone is looking to the stimulus package to help kick the housing market in gear.  Our Menlo Park El Camino office reports that there are still a lot of low end sales.  We only had one closed escrow in Menlo Park this year.  It was over $2 million.  Last year there were seven.  Sellers are beginning to get it as our stats are becoming more compelling.  Buyers and sellers will find each other.  Our Menlo Park Santa Cruz Avenue office reported that one REO sale in Redwood City had 10 offers.  One good Atherton property sold with a list price of $6,995,000.  Hopefully this is a sign that the high-end is loosening a bit.
• San Francisco—Our Market Street office reports that some of the past week’s back-up offers moved up where primary deals failed.  Multiple counteroffers also seem to be the order of the day with many of the ratified sales taking 1-2 weeks to ratify.  Lakeside states that good negotiations and diligence on the part of the sales associates is what is bringing deals together in this market.  All SF offices note the high end is still slow.         
• Santa Cruz County—We are starting to see potential short sales in the Previews market and have a couple of escrows that meet that criteria.  Two of our Agents are in the process of listing a $7 million property that is ocean front and has already attracted interest.  We have a couple of new listings in the $2 million+ range.  Open houses are well attended and continue to be even in this price range.
• Silicon Valley—Our Cupertino Stevens Creek office reports that the market is still strong in the Cupertino area.  Schools are the constant focus of most of the clients.  Our Los Altos office reports that buyers are still coming to open houses but are voicing concerns about falling prices.  Our San Jose Almaden office reports one REO property that was listed by an out of area Agent received 30 offers.  It was listed at $450,000 and is about $200,000 under valued.  Our San Jose Willow Glen office feels like a broken record but the truth is enlightening:  open houses are busy and floor calls are picking up.  Buyers are looking and may still be waiting to see what happens with the stimulus package.
• South County—Our Gilroy office reports that the market continues to be driven by bank-owned properties.  We are seeing that sales are up YTD over 2008.  Hollister shares that REO listings continue to receive multiple offers and short sale listings are on the rise.  Morgan Hill reports buyers in South County are like hungry linebackers in a buffer.  They are devouring bargain priced properties in both Morgan Hill and Gilroy.  In the first 25 days of February, Morgan Hill Agents managed to put 35 homes on the office sales board.  Prices are still declining but properties listed under $300,000 are selling at a very good pace. 

The current housing market offers a unique window of opportunity for confident buyers.  The exciting news is that for the first time in quite a while, the stars are in alignment for consumers: mortgage rates remain at historic lows, loan limits have been increased, there is an $8,000 first time home buyer credit, and in some areas a good selection of homes to choose from. The only way to know that the market has “hit rock bottom” is when it is on its way up and by then, the window of opportunity is gone.  Among the ongoing concerns consumers currently have regarding our economy and real estate should be one additional one: 10 years from now, we could be looking back at this market, and wish we would have bought a lot more San Francisco Bay Area real estate.

Rick Turley
President

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:

“BAD NEWS GOES ABOUT IN CLOGS, GOOD NEWS IN STOCKINGED FEET.” Welsh Proverb. And while last week did have some negative economic reports clomping through the headlines, there was also some good news tiptoeing around.

The unemployment line is getting even longer, as Initial Jobless Claims showed that the number of people collecting benefits reached a record high of 5.11 million. Not surprisingly, Consumer Confidence fell to its lowest reading since records began in 1967. The sour report indicates that the fear of losing one’s job has made the consumer more reluctant to spend.

Gross Domestic Product (GDP) is the broadest measure of economic activity – and for the 4th quarter of 08, came in worse than expectations and at its lowest reading since 1982. You can see the comparison for the last four years in the chart below (see the PDF report on our website).

The news on the housing front was also gloomy; as New Home Purchases dropped to the lowest level since data collection began in 1963. Existing Home Sales for January came in lower than expected; however, that number was probably influenced by buyers waiting to see what the government’s Stimulus Plan might have in store for them.

The Treasury Department announced on Friday that they plan to take a 36% stake in Citigroup by converting $25 Billion of preferred shares into common stock. The move will dramatically dilute shareholder value, but should help bolster the struggling bank’s capital base.

Some good news from Reuters, as they released the results of a survey of 47 professional forecasters, predicting that the economy will begin to recover in the second half of this year. Additionally, the Chicago Purchasing Managers Index was better than expected, and being a forward-looking indicator, gives another bright spot of hope down the road.

Despite the negative news, Bonds and home loan rates were not able to make improvements over the course of the week, and ended a bit worse than where they began.

MORE CLARIFICATION ON THE ECONOMIC STIMULUS PLAN…AND HOW IT MAY BENEFIT YOU! READ THE WEEK’S MORTGAGE MARKET VIEW FOR MORE DETAILS.

Read the entire report here.

- Foster Weeks