The survey for this week once again supports the continuing trend of lower inventory in the “Active” status for single family residences in the six selected communities. There is a significant decrease of listings in this status from a similar date in 2009, a slight decrease from 2008, but not quite as low as 2007.
The number of homes in the Pending status is up over the previous three years at this time of the season and, most notably, up 48% above last year.
Despite many homes being tied up for longer periods of time in the Pending status, as reported last week, due to extended loan processing times and short sale approvals, the number of homes that have closed escrow to date is above all previous three years March month-to-date closed escrows. There is a significant increase over 2009 and 2008 and nearly equal to 2007.
Is the market improving? A few months ago whenever I ran into someone who knew that I was in real estate, they would always ask: “How’s the real estate market?” And before I could answer, they would say: “Bad, huh?” My response always was: “Depends on who you are and what you’re doing. If you were a prospective buyer three or four years ago and were one of 20 offers on a property and you offered way over the asking price, ‘as-is’ condition and your first-born child but still weren’t the successful bidder, was that a ‘good’ market for you?”
In various price ranges in various locations, if you are a buyer, this is good market. If you are a realistic seller, this is a good market. Properties that are priced accurately for our current market, have recent updating, properly prepared for sale with reports, necessary repairs completed, sparkling paint and staged will sell very quickly and may even be subject to multiple offers. Yes, multiple offers. I sat in on a presentation last Thursday, about one hour before the presentation we were aware of 6 offers coming in on a listing in our office. There were 15 that appeared. Some faxed in without notice, others that notified us within that hour and 3 of those were being driven in by the agents representing the buyers after the designated presentation time. This was on entry level property, but there have been multiple offers this week on homes in the mid to higher price ranges as well. Those receiving the multiple offers in the higher ranges, met the criteria as I stated above. With all the increase activity, I think we are beginning to see a glimmer of hope in pricing stability.
Interest rates are remaining relatively stable and historical low. 30-year fixed rate Jumbo loans above $729.000 are still more expensive than conforming loans and, in my opinion, more difficult to qualify for, but are still available at favorable rates. There is literally is no secondary market for jumbo financing and therefore all of this type of loan is a portfolio product for lenders. It will be interesting to watch what happens with the Homebuyer Tax credit expires and if our market will be impacted by the “Shadow Inventory” that is being reported. The Peninsula Abstract reports we typically receive each week was delayed because of the huge increase in the number of Notice of Defaults and Trustee Sales recorded. However, when these reports were delayed due to the increase recordings of such, the majority of homes were in Daly City, South San Francisco, East Palo Alto. To a noticeably lesser degree recordings also appeared for homes in San Bruno and entry level priced homes in San Mateo. I recently read that Warren Buffett was quoted as saying he expects the national real estate market to return to “normal” by this time next year. He may be on to something.
The links to the surveys are below:
Thank you. All the best!
