Looking for trends. There aren’t any. It is a serendipitous market. One week up the next week a bit slower. Although with a few exceptions. Even for the Bay Area there is no uniform weekly forecast. There are ongoing trends that may not yet calculate into sales but show a building demand. Just like they talked for years about the building bubble in the real estate market, we now have a balloon that is
filling up with buyer demand.

Open houses continue to show strong attendance in the majority of markets. Showings average consistently between 10-40 groups. We are still seeing the “super” open homes with 50-100 plus groups. During the reporting period a 4 bedr./3 ba. Larkspur home listed at $2.495 mil. was visited by 120 groups. In Novato a 6 bedr./5 ba. home listed at $1.46 mil. experienced close to 200 buyers. The Berkeley/Oakland/Piedmont open homes averaged between 30-100 groups. There is no lack in buyer interest.

Multiple offers haven’t gone away either. Thirty percent of the accepted offers ended up with more than one offer. Most are between 2-4 offers. There are the exceptions like the REO (banked owned property) in Napa listed at $397,750 that attracted 13 offers. You can’t blame many of the buyers out there who are looking for that incredible deal only to find that others are doing the same. However most
of our multiples are in highly desirable areas with lower inventories like the San Rafael 3 bedr/2 ba home that received 4 offers and went substantially over asking price. Many of these homes are impeccable with listing prices that reflect current market pricing.

The only things preventing a return to a balanced market is the pervasive negative economic news----accelerating oil and food prices, the downward trend in earnings reports (although a few bright spots with JP Morgan, Wells Fargo, Apple and Ford), and continuing liquidity challenges in the mortgage markets (meaning banks have become extremely reactive with increased underwriting requirements and a shrinking secondary market to sell loans to).

There is no shortage of demand. Even with the negative economic news, a recent Gallup poll, found that 53% of Americans still feel it is a good time to buy a home. For those who make more than $75,000 that percentage increases to 69%. Seventeen percent of buyers felt there homes were worth less than what they bought them for. O.K., that sounds big. I like to look at the eighty-three percent that felt their houses were worth more than what they bought them for. I have attached the results of that poll.

Buyers continue to put off their decisions. However this can only last so long. We are beginning to see those that have been waiting are taking the leap. The balloon can only fill up so much and then it needs to start releasing the pressure. That will happen when we start to see more frequent news showing that we are on the road to recovery. We still have a few more bumps in the road to overcome, but they
will pass and those buyers that took advantage of this period of adjustment will be rewarded.

As David Clayton Thomas said in the Blood Sweat & Tears song Spinning Wheel—what goes up must come down---spinning wheel got to go round. What he didn’t say is, as the wheel spins it will go up again. Just for fun and to bring back a few memories here you go:

http://youtube.com/watch?v=8T97f2kBzOQ&feature=related


Related article:
Gallup Poll: Majority of Americans Still See Buyer's Market for Homes
 

Copyright 2008 Pacific Union Real Estate Group, Ltd. All rights reserved.

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