It’s way too early to draw any conclusions, but there seems to be much more energy in the Bay Area housing market as we begin the new year. After a soft finish to 2010 and the normal holiday slowdown in December, many of our offices around the Bay report increased activity, particularly among buyers.
Open houses seem to have more visitors and more serious buyers in particular. In several communities, our offices are getting a lot more calls from sellers who are finally moving ahead with listing their property after sitting on the fence for the past year or so. And even homes that have been sitting on the market for some time are getting renewed interest. One midtown-Palo Alto property in the mid $900,000 range received 18 offers. A number of other well-priced properties are getting offers within one day of their listing.
“Many buyers that waited the last two years are now calling the agents that have called them so often and saying they are ready to buy now,” said Burlingame manager Leigh Whitten. “The concern that interest rates may continue to rise and the sense that prices may have bottomed out in the Mid- Peninsula have given many buyers the needed push to get going.”
Our Southern Marin manager Kate Hamilton remarked, “It’s feeling as if buyers understand the prices won’t go down further, and with rates so good, now might just be the time to buy. I think sellers are also realizing that the market isn’t going to change any time soon, that would allow them to sell at 2007 prices, so they are getting comfortable with the true value of their home.”
This is not to say that we’ve gotten the “all clear” signal yet. There’s still uncertainty among many buyers and sellers, particularly with unemployment still high. And very tight lending standards, especially in the upper end of the market, still are providing obstacles to closing loans.
But there’s a feeling out in the trenches of the local housing market that we may see some positive traction as 2011 gets into full swing.
As I mentioned, 2010 closed out with mixed results. DataQuick, the La Jolla-based real estate information service, reported that Bay Area home sales in December – both new and existing – were up 17.5 percent from November, but down 8.3 percent year over year while prices remained flat.
John Walsh, DataQuick’s president, pointed out that, “there’s a lot of pent-up supply and demand out there, which will start to meet when the lenders re-open their spigots a turn or two.”
Despite the lending challenges, buyers are still finding a way to close on those high-end homes in many communities, according to our most recent Coldwell Banker Residential Brokerage Luxury Housing Market reports out this week.
Million-dollar home sales in the East Bay surged in December from the previous month and year-ago levels as the high-end housing market continued to show signs of strengthening in Alameda and Contra Costa counties. A total of 107 homes sold for more than $1 million in the East Bay, up 37 percent from the same month last year and 23 percent from November.
Both luxury home sales and the median sale price in San Francisco moved slightly higher in the fourth quarter of last year. Sales of multi-million-dollar homes in the city rose 1.8 percent from the previous quarter and the fourth quarter 2009. Additionally, the median sale price climbed 3 percent over last year to $2,625,000.
Still, not all local markets saw gains in the high-end last month. Silicon Valley and Marin County, which had experienced robust sales increases much of 2010, cooled off a bit at the end of the year. Silicon Valley’s million-dollar home sales were off 8 percent last month although the median was up 3.6 percent. And Marin saw sales drop from 54 in December 2009 to 43 this past December, but again the median sale price was up, 6 percent in this case.
With the flurry of activity our offices have seen in the recent weeks it will be interesting to see what the next month or two brings on closed sales. Stay tuned!
Below is a market-by-market report from our local offices:
North Bay – The year is off with a bang, the Greenbrae office reports. Agents are scurrying around the office, conference rooms are full with clients, offers are being written and phones are ringing. This is a good signal to the start of the new year. Broker tour was crowded with agents (and clients) and Sunday opens were well attended. Greenbrae continues to be a hot market, and the high-end seeing some more pricing pressure downwards. Our Southern Marin office manager says agents are cautiously optimistic. The first two Sundays of the year (following the holiday weekend) saw more visitors at open houses than we’ve seen in some time. Sellers are calling our agents about listing and buyers are making offers. Our northern Marin office has seen a resurgence of activity in recent weeks and there have been 39 new listings in Novato/San Rafael since December 20th, which is an encouraging sign. Sales have picked up and open house activity is strong. Agents are reporting from 8 to 34 groups through their open houses. In Santa Rosa, sales have picked up and open house activity is strong.
San Francisco – Our San Francisco Lakeside office reports that open Houses are well attended and the mood of buyers is serious but very value conscious. There is a steady stream of new transactions at a relatively low volume but there is a great deal of optimism – buyers, sellers and agents are all feeling optimistic. The Lombard office says the January “buzz” has taken three weeks to start but finally is here. Lots of activity and traffic in the last week after a very extended holiday lull. Our Market Street office reports that serious buyers are showing up to the listings, offers are being written and the counters are flying back and forth. An agent had an open house this Sunday in the Mira Loma Park district that had the best attendance in the seven years he’s been holding Mira Loma Park opens – well over 100 groups. Open house attendance was up overall and many more disclosure packages have been sent out this last week that the previous six. That’s echoed by the Noriega office, where the manager says there seems to be a surge of buyers coming back to the market after the holidays. Activity levels are up. Well-priced properties are still getting multiple offers. One listing came on the market in December in the high $600,000, reduced the price to mid $600,000 last week, received three offers within a week and it’s in escrow at full price. Another listing (REO), received 12 offers, in contract at approximately 10% over asking. There’s a need for more, well-priced listings.
SF Peninsula — Burlingame agents have kicked off the new year with great sales activity. Negotiations are often with 5 or more counter offers and after inspection negotiations as well. Everyone involved needs to feel they worked hard to get their best deal. There are currently 45 active listings and 15 pending sales in Hillsborough. There are some beautiful properties coming to market, thoughtfully priced and hopeful for the New Year. Over $3 million is still a bit slow as lower end Hillsborough competes with upper end Burlingame and San Mateo Park. Over the hill in Half Moon Bay, it has been a slow January start although the buzz is great with buyers out shopping and writing offers – some writing within one day of the list date. We have a fair number of well-heeled buyers right now, or Menlo Park manager says, and they’re very short on inventory. It seems to happen every year – buyers come early to the market and sellers late. Our Palo Alto office says after a slow start, things seem to be improving. Homes priced well in Palo Alto get multiple offers, as the 18 offers for the listing under $1 million shows.
East Bay – Buyers seem hungry for properties in Berkeley, with not much on our local markets yet. A small duplex just received five offers after sitting for many weeks in 2010. With a shortage of listings, it’s important for sellers to list properties as soon as the sellers can, rather than to wait for the traditional February or March spring listings. In Castro Valley, fewer REO’s are coming on the market, but agents are seeing a number of short sales in San Leandro and San Lorenzo. There are more listings coming on in Hayward, but few in Castro Valley itself. Our Danville office reports that January started out very slow, but recently sales have picked up. Last weekend, everyone reported strong attendance at open houses. The Fremont office says it has been slow due to the winding down of the holidays. In Oakland, agents report the market seems to be picking up steam. Listings are coming in at a faster pace than sales, which is positive. The Livermore office was buzzing with activity on Martin Luther King Day. The detached single-family home market in Livermore remained stable the last two months of 2010, with very little change in active inventory and pending sales. Our Pleasanton manager says he’s seeing increased activity at open houses; buyer’s coming out of the woodwork with multiple offers on lower end homes. In Orinda, buyers are out there making offers but there just isn’t enough inventory of homes to pick from. Finally, in Walnut Creek, there are lots of buyers but they’re sitting on the fence, according to our local office. Open homes are very well attended, but inventory is low and not exciting buyers.
Silicon Valley – Both sales and inventory are on the rise, according to our Cupertino offices. Our manager says there is lots of activity and demand for the best houses with the best schools. A well priced home with Cupertino schools is sure to get multiple offers. Our Los Altos manager gives a similar report, saying the local market is coming back to life. It’s slower above $1.9 million, however. Agents are optimistic in Los Gatos, where both inventory and sales activity are on the rise.
Both our San Jose Almaden and Willow Glen offices report activity picking up and open houses also busy. The one downside is that escrows are taking longer to close, which seems to be the new norm. But they are closing. Finally, our Saratoga office says listings are beginning to increase and the activity level in the office is increasing. It appears that we’re experiencing a normal beginning of year process.
South County – The South County market continues to show signs of life, our Morgan Hill office says. The Silicon Valley and South Bay economy seems to be picking up. And because South County is a perfect “bedroom community” agents are reporting that open houses are very well attended and that potential buyers are engaged and interested. Healthy sales for December and a number of good listings taken (not short or REO’s) are again both positive signs.
Santa Cruz – There has been reasonable activity in local real estate offices for this time of year. January tends to be quiet although not so much this year. With the onset of the unseasonably warm beautiful weather, the Buyers have been out at open houses the last few weekends. Listing inventory is low, and has been for a few months. As we approach February, there should be more properties coming on.
Monterey Peninsula – Our local Carmel area offices report that the year has started off well with new listings coming, after slowing down in December. We are still enjoying a steady pace on sales, even including several high-priced Previews properties. There have been 25 ratified officers in the past couple of weeks, and 72 open houses.
One final note on the Previews market: Livermore, Pleasanton and the Tri-Valley area are coming into their own when it comes to high-end properties. Pleasanton had the most million-dollar home sales in the entire East Bay last month with 16 properties changing hands for more than $1 million. And in Livermore, the largest percentage increase in closed sales last year was in the $1 million to $2 million range. There was a 107% increase in closed sales between 2009 and 2010 in this price range. They’re not alone. The Peninsula, Silicon Valley, and even Santa Cruz offices are reporting new life in the high-end market. In Woodside, we had a $6 million home that sold in one week, and there are many more buyers ready to go when the right home comes on the market. From what we hear from our strong listing agents, there will be some quality high-end listings coming on over the next four weeks. With the current pent-up demand, it should make for a very busy Spring.
That’s it for now. Have a good week!