“All quiet on the Western Front sums up the week of June
12th. The normal June pattern is in effect---Father’s Day and Graduations----a
bit slower week. The SF/Peninsula still leads the Bay Area in percentage
of multiple offers due to the ongoing lack of inventory in single family
homes. The rest of the Bay, with a few exceptions in the Berkeley, Oakland,
Orinda, and a few markets in the No. Bay, Sebastopol and Petaluma, are
seeing primarily single offers. Price reductions abound as sellers begin
to adjust to a new reality. Prices are still up over last year, but
the rate of appreciation has slowed.
"Two forecasts this past week by UCLA and USC both predicted a
slowing in volume of sales, however they did not see any significant
drop in prices. They also did not see any signs of a recession. These
forecasts bode well for the local real estate market long term. Currently
they see increasing inventory, but they view this as a temporary condition
as those sellers that do not have a compelling need to sell begin to
take their homes off the market. They see demand for housing not subsiding
due to the lack of new home building and continuing immigrant and echo
boomer demand.
"Open houses are still active, although it is asking buyers longer
to make decisions. Buyers are asking for more concessions as the market
normalizes. Most Bay Area markets have reached a point of equilibrium
between buyers and sellers.
"The current transitioning market, creates a time where market
savvy and experience make all the difference in the world. Let me give
you an example. During this week a 3 bedroom 4 bath home in the Castro
District of San Francisco came on the market at $1.895 mil. Sounds like
a big price, although some realtors felt it could go for more. The seller,
who had some understanding that the market had transitioned, took the
advice of their realtor pricing their property well below the $2 mil.
mark. They garnered two offers and a selling price of $2.1 mil. closing
in 12 days. That’s only part of the story, one of the offers was
by a buyer representing themselves. They came in lower than the winning
offer because they used comps. given by zillow.com.
The buyer lost out using a source that bases its estimates on closed,
recorded data that does not distinguish between homes. It only uses
numbers without understanding the unique differences between homes and
neighborhoods. The seller gained by understanding the market had changed
and by having the advice of their realtor. They actually ended up in
a better equity position by going under the market with their list price.
On the other hand, the buyers lost because they relied on an internet
source that put them at a disadvantage. Experience and knowledge paid
dividends to the seller and the lack thereof put the unsuccessful buyers
out in the cold.
"The last couple of years have been categorized by a buyer frenzy.
This year we have shifted to a listing frenzy with many sellers thinking
they need to list now before it is too late. I believe that is why inventories
have ballooned. As we enter the second half of the year I believe those
sellers that do not have an elemental need to sell will take their homes
off the market and bring current inventories into balance, allowing
for a sustainable healthy real estate market."
Avram Goldman
President and COO
Coldwell Banker SF/Bay Area
