Current real estate market for Alamo, CA

So... How is the Alamo CA housing market doing today? With all the talk about the big increases in housing sales here in California you might assume everything was great, right? Well in Alamo and the surrounding communites of Danville, Blackhawk, San Ramon and Walnut Creek you would be wrong.

The Alamo, CA community has not seen a single family detached home priced below $600,000 since way back in 1996/97. I was doing my Alamo Home Search this weekend and found a home priced at $625,000, granted it was very close to the freeway and on a busy road but still, it's a detached home with a 1/2 acre lot. It is not a fixer and had many fine upgrades. When and if an offer is presented on this house you can be pretty sure it will be closer to $600,000, less than the asking price.

There are 116 homes listed in Alamo as of today. Just a few years ago the average number of listings was between 40 and 60. See the charts below for Average Days on the Market and Months of Inventory. As these charts go back two years they graphically tell a story. So why are these previously sought after Alamo homes languishing on the market?

There are a few good reasons...

1. Interest rates on loans exceeding the FHA conforming limits start around 6.7%, This rate requries at least a 20% down payment and an excellent credit score. In comparison, conforming loans can be found today under 5% with as little as a 3% down payment. And if it's a jumbo loan you'll need to find a bank willing to lend.

2. Jobs - Even in the executive arena people are loosing their jobs. No job, no money to pay the mortgage.

3. Option Arms and Alt A loans in default. Many of these currently listed Alamo homes that are either in foreclosure or REO bank owned were purchased between 2002 and 2006, when prices were at their peak and the banks were lending to anybody with a breath. In fact, I'm not sure breathing was even a requirement!

Is it going to pick up anytime soon? That's the $64,000 question and the answer is directly related to jobs and interest rates. If the government keeps printing money interest rates will most certainly rise. If businesses can't borrow money job growth won't happen. It all depends on our current batch of leaders and how they handle the current problems. If they do a good job we'll come out of this sooner rather than later. If they get it wrong, all bets are off. But if you are in a position to buy a home in Alamo, now may be a great time. Prices and interest rates are low but no one knows for how long. Find a great agent with knowledge of the market and proceed with caution.