"Reality is setting in. Today’s market is different
than the market a year ago. Since last November we have been going through
a transition. We have moved from a frenzied seller’s market to
a balanced/buyer’s market. As in weeks past the Bay Area markets
cannot be put into one basket. Most markets are still increasing their
inventories, however a number of markets mostly on the San Francisco/Peninsula
have been holding steady.
"The market always seeks equilibrium after a period of rapid appreciation.
Between 2003 and 2005 sellers experienced accelerated appreciation.
Many properties increased in value from 30-80%. This kind of appreciation
cannot be sustained. There is an old expression sellers are 6 months
behind the market and buyers are 6 months ahead of the market. This
has been particularly true of the first half of this year. We are seeing
that sellers are becoming more in tune with the new reality. It is not
2005 prices. The number of multiple offers has slowed in many areas
to a trickle. There are some areas that are exceptions, but those are
due to lack of inventory and built up buyer demand. For example the
20 offers on a $699.000 fixer in Palo Alto or the 27 offers on a Parkside
fixer in San Francisco. These are not the norm. However what it does
show is the market is still active when buyers see true value.
"Most buyers today are much more pragmatic than a year ago. In
areas were we have seen large run up of inventories there is no sense
of urgency. Sellers are beginning to understand this new environment.
We have been seeing increased numbers of price reductions. Sellers are
becoming more willing to do the work necessary to merchandise their
properties. For those sellers that do, they will reap the rewards. For
those that don’t, their properties will remain on the market or
eventually decide not to sell. Buyers will move once they see the value.
"In many market places we are still seeing good open house activity.
This is especially true of homes held open for the first time. After
the first time, activity lessens. Buyers are on the hunt---looking for
that house that has real value in their eyes. When they find it they
are moving on it. This is certainly an opportune time for buyers---given
the selection of properties and their increase negotiating power.
"Here are the numbers for the week of July 10-16: 10 offices showed
increased listing inventories, 17steady and 1 decreasing---8 offices
reported increased sales activity, 14 steady and 6 decreasing."
Avram Goldman
President and COO
Coldwell Banker SF/Bay Area
