They tell me there is a recession going on. I know for certain there is one because I personally know people who have lost their jobs and they are struggling to survive. But I’ve evidenced situations that make it difficult to believe the economy is so frail.
My wife and I went to the movie theater last Saturday. All of the theaters showing the various films were packed. We walked around downtown San Mateo after the movie and every restaurant was filled to the brim. Maybe it’s because my car will be 9 years old this week, but I sure do see a lot of new automobiles with paper plates. I guess the economy around where I live and the places I go is doing fine for everyone that sees the same movies, dines out where I do, or appreciates automobiles.
Maybe the same can be said for the housing market. Seems like everyone wants what everyone wants.
One of the primary reasons I do this blog and the surveys is because real estate markets are local. And as I have evidenced over the years the market of each municipality is different from the next and each municipality has micro markets that differ from their other micro markets. While my blog is targeted for a fairly large group, it would be of little or no interest to others outside the mid peninsula other than to compare markets.
On Saturday, April 24, 2010, the Chronicle reported: “New-home sales in U.S. soar; durable goods climb. I’ve always considered, without verifying, that an increase in durable goods bodes well for our economy as the people who manufacture those goods will be employed. And based on the demand of those goods, more people would be put to work making the parts, manufacturing the goods, transporting the parts and the finished goods, sales people, and the list goes on and on. The article stated further that “consumer spending makes up 70% of the economy.
Another promising sign on the horizon is reported by Andrew S. Ross/The Bottom Line on Friday, April 23, 2010; “Mortgage-backed securities on sale”. I recognize that this type of instrument was one of the primary contributors to the financial meltdown, but I also believe that such a program with built-in safeguards is what will be needed at some point as the housing market continues its recovery. It was reported that “Mill Valley’s Redwood Trust Inc. has pulled the trigger on $222.4 million worth of residential mortgage-backed securities, the first such offering, since the market for most things mortgage related collapsed in 2007”
Here’s what’s happening in the areas I survey;
The number of homes in the Active Listing status has edged up again slightly over last week (1.74%). The number of homes in the Pending Status remains higher than the previous three years for the same time period and is up 9.55% over last week. The number of month-to-date closed escrows is also encouraging. While roughly the same amount of Closed transaction occurred M-T-D in 2007 and 2008 there is an 83.33% increase over last year. A link to the listing and sales activity for 2004 is posted below for the purpose of comparison as 2004 was the year from 1999 – 2009 that had the highest annual number of closed transactions both in Single Family Residences and Condominium/Townhouses.
While we are on the subject of closed sales, off the total 77 month-to-date transactions, 28 of them sold for the List (Asking) Price or higher. Usually this type of bidding strategy occurs when there were competitive multiple offers or there was an attractive pre-emptive offer presented before other offers were written. As reported last week, the multiple offer/over bidding activity in each community is typically in the median to low price range. However in San Mateo, more than half of the overbid properties are from the median to highest price range. It seems like “Everybody Wants What Everybody Wants”.
Have a great week.
EVERYBODY WANTS WHAT EVERYBODY WANTS
April 26, 2010 Leave a Comment
