Looks like we ride with the stock market or maybe the stock market rides with us. As stocks had a very good week our market during this period had the highest number of open weekly sales since the fourth week of July, which was just before the wheels came off the wagon. Have we hit bottom and now ascending? I think it is a bit too early to tell. One week does not make a trend. However, what it does tell us is that for a segment of buyers who have been waiting it was time to dive in.

Who can blame them. No one knows when the market hits bottom. What we can observe is that in the lowest price ranges, there has been the largest amount of activity in more than 8 months. Buyers who have watched prices decline are sensing that we could be getting close to the basement. Why wait and risk missing a golden opportunity. The largest single factor in declining inventories has been these low end properties finally beginning to sell. The banks and other financial institutions who are handling the short sales and foreclosures have begun to clear the hurdles so these homes can be sold. Bureaucracies, particularly financial ones, move slowly. We have been seeing increased multiple offers on these types of properties in the under $450,000 price point. This combined with sellers who still have equity and have come to the conclusion that if they are going to sell their properties they need to come into the year 2008 not 2005; creates  saleable listings. This was certainly the case in Alameda, Contra Costa, Solano and Sonoma counties which saw the largest drops in months supply of inventory since the end of last year.

We are even seeing this pattern in Marin county. Last year it was the over million dollar properties, especially the over $2 mil. properties selling extremely well. This year and especially since March, the under million dollar sales are dominating.

San Francisco is heating up again. The $1.2-2.1 mil. category is now being described as hot hot hot. A Parnassus/Ashbury 3bedr./2.5 bath home listed at $1.695 had 14 offers and went “well” above full asking price. Another SF 2bedr./1ba property in Eureka Valley/Dolores listed at $1.195 mil. received 4 offers and it too brought a final price considerably over asking.

On the other side of the Bay a Kensington 3bedr/1ba fixer property listed at $520K garnered 14 offers. These double digits multiple offers are rare. Most multiple offers tend to be 2-4 offers and of those many are at list price or a small amount under list. What is amazing is that buyers are willing to go well over on properties that are either priced aggressively or have unique qualities even in these stressful
economic times. Over 25% of our sales in the reporting period were multiple offers. The bulk of them from San Francisco and Berkeley/Oakland/Piedmont marketplaces.

Strong open house activity has continued in spite of the beautiful weather. You figure buyers may want to enjoy the sunny skies. Berkeley open homes have been in overdrive. A 4 bedr/3 ba. home listed at $1.520 mil. had 135 groups attend. While a 2 bedr./1 ba. priced at $599K entertained 150 groups. Again San Francisco is hot on Berkeley’s heels with 100 groups through a Lake District 3 bedr./2.5 ba. home listed at $1.659 mil. Most homes had traffic between 10-40 buyers. Repeat home opens, those opened more than once tend to have the least attendance.

The pent up buyer demand keeps building. Lenders are making it more difficult to process loans. They have become over reactive. Asking for increased documentation and questioning appraisals. In a number of cases they are seeking review appraisals. We are getting the loans done, but the time and effort can be daunting. This too will change in time.

In seems counter intuitive that in the darkest of economic times some consumers are still buying real estate. The wealthy in America see that the best opportunities in real estate are right now during the sluggish market. What do they know that others may not. I have attached on the e-mail an article describing what the wellheeled are seeing in the current market.

At least we can see a few positive signs. If those trends continue we could be headed to a more normalized market. Look for that happening either during the summer or as we head to fall. The wealthy understand this. It is a great time for
buyers.

View attached article: Sunny side of the street America's wealthy see buying opportunities in sluggish real-estate market

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