San Francisco Real Estate Market Update for
week of
April 27, 2008
Read what Rick Turley, President of Coldwell Banker, San Francisco/Peninsula says in his latest weekly report:
Earlier this week, Richard Smith, Chief Executive Officer for Realogy, released a video statement regarding the state of the national housing market. In it, he noted, “Like all downturns, this too shall pass. It’s not a matter of if, but when.” Shortly thereafter I read several market updates including two notable reports from Freddie Mac and NAR. Both are predicting that the market will stabilize in latter months of 2008, with housing recovery and sustained growth expected in 2009.
So what does that mean for our clients now? Opportunity is knocking. Though none of us holds a crystal ball, if both of these respected sources are correct in their predictions, now may be what we look back upon a year from now and say was the official bottom of our market. Buyers need to be aware of this fact and need to take advantage of today’s attractive interest rates, and increased jumbo loan limits. In a broader regional sense, specifically in the average-and-under price points, Buyers have more choices, lower prices, and motivated Sellers to negotiate with. Conversely, most local Buyers in our over $1M high demand areas of the Peninsula and San Francisco are having trouble finding enough new listings to meet demand. This notable dichotomy suggests that if the statewide and national indicators point to “hitting bottom” soon, then certainly it won’t mean an increase of inventory coming to market at lower prices in these desirable $1M+ communities.
Some East Bay offices report a flurry of activity and note that though some deals are falling out, they are replaced by fresh offers that same day. Our Oakland office recently listed an expired from another broker which received three offers following our first open house. The listing went for well over the asking price. Santa Rosa is noting that floor calls are way up and that the low to middle market continues to be where the action is.
On the Peninsula we are finding that, though inventory of quality listings remains a challenge, we are seeing a surge of buyers coming into the marketplace. To further illustrate the dichotomy mentioned earlier, Burlingame notes an example where Buyers have taken a wait-and-see approach to a new listing, then all of a sudden -six offers. Our Menlo Park office notes that buyers are moving forward cautiously in buying and may not be willing to get into multiple offer situations. That said, however, one Palo Alto listing offered at $1,985,000 recently received eight offers and went well over asking. Our Palo Alto office is also noting an all time low in inventory with about 80% of offers going into multiples. It all comes down to neighborhood, pricing, and the important economic formula of supply and demand.
San Francisco remains a bit of an anomaly with pockets that are strong and those that remain challenged due to lack of quality inventory. Our Van Ness and Lombard offices report that the luxury market remains strong. The entry level and mid-level markets seem to be getting the hardest hit by the lack of quality inventory, though open house activity seems to remain steady which shows there is buyer interest.
Rick Turley
President
Coldwell Banker SF/Peninsula
