"The most significant factor affecting the market today is the
media. You can’t read a newspaper, e-mail news service, watch T.V.
or listen on the radio without hearing a story that the housing market
is bust. All these reports tend to lump vast regional areas or the entire
country together. The media has been waiting for the bubble to burst
for the last four years. Journalism is supposed to be objective reporting,
although currently there is a certain amount of glee in the reporters’
accounts. The only show I have watched that has given a least a balanced
picture is the Nick Cavuto show. At least he had analysts, not interviewees
tied to the industry, who presented both sides of the picture.
"None of us want to live in denial. Yes the market has changed,
but it is not bust. Yes, in some areas prices have retreated. Is that
a negative? No. Appreciation has been spectacular over the last 3 years.
In fact, in most marketplaces the cumulative appreciation has been plus
50%. If it backs down 10 or 15% these are still incredible returns as
real estate is a leveraged investment. Real estate has never been perceived
as a short term investment, but most financial advisors will tell you
real estate is a premier long term investment.
"Now back to last week’s view of the market. It is a kaleidoscope.
It seems no two markets are the same. Even where we have two offices
near each other the experience is different. With that said, there are
a couple of trends. First agents are reporting a new wave of buyers
looking for homes. These are buyers that are new to the market place.
This is new demand that will be exercising itself. Secondly, more offices
are reporting that inventories are decreasing. We may have reached the
nadir of increasing inventories. Supplies will decline as more sellers
who do not have a true need to sell, as we see more reductions that
create sales and as the number of new listings hitting the market diminish
inventory. As supplies come in balance with demand the market will find
its equilibrium.
"Again the SF/Peninsula had the highest percentage of multiple
offers, although Berkeley, Oakland/Piedmont and So Marin had strong
multiple percentages too. Open house activity was all over the map---from
very active to exceedingly slow. First time opens certainly had the
strongest showings. A first time open home in Albany experienced 53
groups and a chic condo listing in the Gourmet Ghetto of Berkeley had
40 groups visit.
"The drivers of sales are still strategic pricing and exceptional
merchandising---staging, obtaining pre-sale reports and taking care
of any deferred maintenance. Those houses that came on the market overpriced
are now selling when reduced to the appropriate price levels. We have
even seen a few attract multiple offers. Buyers are certainly price
savvy. Keen negotiation is now the key to successful transactions.
"This week’s numbers are as follows: 6 offices reported increasing
inventories, 12 steady and 13 decreasing---sales activity showed 6 offices
with increasing activity, 17 steady and 8 decreasing."
Avram Goldman
President and COO
Coldwell Banker SF/Bay Area
