This past week Congressmen earned their pay (so to speak) by pointing fingers at Bernanke, Timothy Geither (President of the NY Fed Reserve) and Christopher Cox (head of the SEC), while Henry Paulsen, Sec. of the Treasury, missed the berating as he was off to China and our President’s highlight of the week was throwing out the first pitch at the Washington Nationals’ new baseball stadium.  The truth of the matter, it was Bernanke and Geither that took bold steps in quelling a potential financial meltdown---at least someone is actually doing something to get us through the stormy waters---Congress, the President and Sec. Paulsen have so far been pretty ineffective. It must be election time; no one wants to make a mistake.  I have been critical of Benanke in the past for not moving more quickly and not being able to see the tsunami coming---I do have to applaud him now, not only for taking the bull by the horns, but enduring hours of harassment by Congress’ Monday morning quarterbacks.

The jobs report shows that the economy has weakened----duh. Still debating are we or aren’t we.  Enough already----it’s a recession. Unemployment has moved up to 5% and is expected to hit 5.5% by year’s end. O.k.---that means 94.6% of the workforce is employed. For good measure, let’s throw in another half percent for those that have just given up on finding a job and are not in the numbers.  Now we are at 94% employed---that still sounds solid to me.  Jobs in education, health care and the service sector are up and as expected manufacturing jobs are down. 

Beyond all of this there are signs of increasing stability in the financial markets. UBS, the giant Swiss bank whose shares have lost half their value, bounced back last week with their shares increasing 15%.  The write downs over and with a recapitalization plan in place, the bank is on more solid ground. Obviously the market thinks so.

On the home front, the Bay Area is showing signs of stabilization.  With March MLS figures in, we are seeing indications that our local real estate market is moving toward normalization.  A few short months ago the months supply of housing inventory in the majority of our counties was in double digit figures.  At the end of March all counties are now in single digits.  The bulk is between 4-6 months, not outrageous by any measurement. San Francisco leads the pack with a 3.1 MSI followed by San Mateo at 3.7, Marin 4.8, Sonoma 4.8, Santa Clara 6.2, Alameda 6.3, Solano 6.3 (it wasn’t that long ago that Solano was 3 times that amount), Contra Costa 6.3 and Napa 8.1.

Although closed sales were down nearly 35% from March of 2007, sales that went pending in March were nearly equal to last year’s figures.  Some counties fared better than others. Surprisingly the counties with the lowest average sales prices did the best in sales that went pending during March. Solano, the hardest hit county last year was up 89% in units that went pending, they were followed by

Sonoma +25%, Contra Costa +20.8%, San Mateo flat, SF -8.06%, Alameda -12.6%, Santa Clara -16.6%, Napa 17% and Marin -25.61% (interesting in that Marin was one of the healthiest markets in 2007). 

Closed sales were quite different reflecting the slowness of sales in January and February. Again Solano performed best at -15% off from last March in closed sales.  They were followed by Sonoma -33%, San Mateo -33.4%, Contra Costa -35.8%, SF -37.6%, Napa -41%, Santa Clare -41.9%, Marin -43.4% and Alameda -46.2%.

Prices have held best in the highest average sales price markets.  San Francisco prices both for median and average, comparing March 2007 to March 2008, were up ---med. +4.25% and avg. +5.53%.  They were followed by San Mateo -4.19%/10.5%, Marin -7.7%/-6.8%, Alameda -15.3%/-12.4%, Sonoma -21.3%/-16.8%, Solano -25.8%/27.4%, Contra Costa -27.2%/-23.9% and Napa -29.4%/-28.6%.  One caveat, this represents only one month and that there can be strong variation within counties by cities. Another note is that three counties have shown consistent growth in median sales price over the last 90 days---Alameda, San Mateo and Santa Clara counties. Also Solano county were values have dropped the furthest over the last two years has shown a steadying of prices over the last 90 days, moving down from January at $330,000 to $325,000 in March. February was up to $334,000. If these trends continue in these counties and we see that pattern in the others, it could be that we are now bumping along the bottom of the pricing cycle.

More specifically for the reporting week, sales activity appeared to have slipped from the previous week, while listing activity increased.  Multiple offers slowed with only 16% of our pendings involved in a multiple offer. There has been a resurgence of sales in the entry level price ranges---those under a million dollars. Open home activity is still strong as indicated by the 170 groups through the SF Pacific Hts 5 bedr. 2 ba. home listed at $2.995mil. or the 140 visitors to a new Castro St. listing.  In the East Bay a No. Berkeley duplex listed at $935K garnered 80 groups and a new Piedmont Ave. 2bedr. 1 bath listing in Oakland priced at $799K had 100 groups.  By the way, that listing received 3 offers and sold. Speaking of multiples in the entry level, a SF Inner Sunset 2bedr. 1 bath home priced at $549K received 11 offers and went well over full list price.

It is still a wacky world out there. Unlike previous course correcting markets this one still has pressing buyer demand. That is, if the home is priced at current market value and is properly staged.

If you ever think America has lost its vaunted position in the world I have included a clip of how much country western music is appreciated in Russia and Finland. Enjoy and hope it makes your week.  http://www.tothepointnews.com/content/view/3114/85/

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