San Francisco Real Estate Market Update for
week of
December 9, 2007
Read what Avram Goldman, says in his latest weekly report:
Note: While Avram is no longer with Coldwell Banker, he is still a friend and associate with an excellent handle on San Francisco Real Estate.
The combination of the natural slow down for the holiday market and little positive news on the economic front has down shifted activity both on the listing and selling side of transactions. Multiple offers have disappeared except for San Francisco and a few areas in the East Bay. Many buyers and sellers have gone into hibernation and are waiting for the New Year. Open home activity is dwindling, although first time open homes in the most desirable areas are still attracting good traffic as the four unit TIC in the Marina area of San Francisco had 90 groups through. These open homes are the exceptions rather than the rule.
Most economists are leaning toward recession. However many of them are baffled by strength in some segments of the economy and that unemployment remains steady while we are still experiencing some, albeit small, job growth. The stock market is still behaving like a patient that is trying to stabilize its pulse. Uncertainty is creating unsure times that are creating reluctance on buyers purchasing patterns.
For most Bay Area locations we have now settled into a buyers market. There is a sliver lining certainly for the buyers who have waited until now. Many stories have appeared of buyers who have negotiated very attractive sales. For many years the sellers have been in control and now the buyers are having their day.
Surprisingly prices have held in about half our counties while others have declined. Alameda, Marin, San Francisco, San Mateo, and Santa Clara counties have held or increased their median prices year to date, while Contra Costa, Napa, Solano and Sonoma have declined.
While sales decline, listing inventories are also shrinking. From October to November, months supply of inventory has decreased except for Alameda and San Francisco (although still at a Bay Area low of 3.4 months) counties. This trend is a good sign. If inventories continue to hold or further decline we could be seeing a flatting out of the market.
What we have today is not a housing bubble, not necessarily a credit bubble (although the credit situation has acerbated the course correction), but a confidence bubble. Buying a home is deeply connected to a buyer’s view of their economic future. If that view is uncertain then the motivation to buy is stilted. When buyers once again feel the economy is moving in a positive direction the mood will change. It may be a while before buyers feel that again. Until then, sellers need to realize we are in a different reality. Even if values have dropped, sellers who have owned their homes more than 3 years have done quite well. According to CNN sellers from 2001 to 2006 have seen their equities raise any where from 25-88%, depending on where they live in the country.
Avram
Avram Goldman
President and CEO
Pacific Union GMAC Real Estate
One Letterman Drive, Bldg. C Ste. 300
San Francisco, CA 94129-1492Direct 415.345.3788
Cell 925.323.8881
Fax 415.561.2158
