Mark Bruno

Below is this weeks Market Watch for all of the Coldwell Banker offices in Northern California by Greg Marcres, the Executive VP for the Western Region with Coldwell Banker NRT. It looks like the corner might finally be in sight and we might even be starting to turn it! Speaking from personal experience, our market here on the Monterey Peninsula has definitely picked up a little steam. I have written two offers in the last 24 hours and might be writing a third one tomorrow! Our office in Pacific Grove is busy and our listings, especially in Pebble Beach have seen an increase in showings! Every "active" agent I have spoken to is feeling the same surge of activity with buyers.

Could this be the bottom? Read on!

Mark Bruno

I'm Invigorated!

Okay, I know that headline seems a little exaggerated and maybe even a little far-fetched, but honestly I am. I don't know if it is a combination of the sun, the clean Spring air and the excitement that seems to be brewing in our offices, but I can feel that change is abuzz in the real estate market and for the first time in a long time, I'm truly invigorated!

This week was yet another week of milestones. Several weeks ago I questioned, are all of these positive indicators the start of a trend or are they just that, positive indicators that will have a short shelf life. Well, after at least four weeks of some strong, positive gains, I truly am invigorated.

This week, NAR released its Pending Home Sales Index, a forward-looking indicator based on contracts signed in February, reporting that pending home sales rose 2.1 percent to 82.1 from a reading of 80.4 in January. Pending home sales have a way to go for there to be a meaningful increase, but recent increases in shopping activity are hopeful indicators that we'll see additional sales gains.

NAR's Housing Affordability Index also rose 0.9 percentage points to a record high of 173.5 in February from an upwardly revised index of 172.6 in January, and is 36.3 percentage points higher than a year ago. This broad measure of housing affordability using consistent values and assumptions over time, shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970. 1970!!!!

Also interesting, Inman News released a survey this week noting that of the 225 readers who responded to an online survey from March 23 to April 1, 48.9 percent said housing markets in their area were improving, 27.1 percent said they were stabilizing and just 12.9 percent characterized them as worsening.

That, along with the indicators I've referenced over the last several weeks including last week's jump in mortgage applications, the historic drop in interest rates and the surge in new housing starts, we truly are seeing some very positive and indicative signs of recovery. I truly believe that buyers are seeing inventory move and that gets them moving.

It seems some of Obama's various recovery efforts are starting to have some effect on the market. The billions to slow foreclosures and goose bank lending, plus the tax credit, are getting buyers to move which is a positive sign.

Now, of course, we'll have to keep our eye on it and watch as the market continues to progress through our traditionally busy Spring selling season, but thus far the signs are positive and my magic eight balls says "Outlook is Good."

With that good news in tow, let's take a look at this week in real estate:

• East Bay-Our Berkeley office reports we are busy writing offers and selling listings. We had eight offers on an REO priced low and won out over four other offers on a property listed at $1.25 million. There are still some fence sitters and some fall out, but open houses are busy, rates are low and the media is even reporting some good real estate news. Castro Valley reports that they are starving for fresh inventory. We have plenty of buyers with new ones coming to the surface each day. Prices remain stable throughout, although we are seeing some great deals in the mid and upper range markets. The majority of our business is short sale at this time and we are waiting for long periods for lender approval. This is slowing all aspects of our process down. Fremont reports that sales are good and this may be a reflection of the reduction available in REO properties. REO sales have become more competitive, buyers are trying to take advantage of these great deals. Livermore reports there were 114 pending sales in Livermore in March 2009 and 109 of the pending sales were listed at $499, 950 or less. Oakland reports a very busy week but most of the sales were in the lower price ranges and the REO business is busy. Our number of open houses are increasing.
• Monterey County-Mortgage rates are down. REOs coming on the market have slowed. Though there is still good inventory in most areas and it appears that prospective buyers are getting more serious about it being a good time to buy. We're seeing better open house attendance and more offers being written.
• Santa Cruz County-There is definitely a little "uptick" in the market with more showings, seemingly more offers and generally the activity that comes in Spring. Pendings continue to be strong in South County (Watsonville) with over half in that area. Inventory levels have dropped in the past five months. Median price dropped to $386,000 in the county with South County providing a significant influence on this drop.
• Silicon Valley-The Cupertino De Anza office reports "I hope it's not just a blip in the market, but we had a good week." Agents are hearing buyers say that it's a good time to buy, rather than that they should wait and see how low things will go. Cupertino Stevens Creek concurs noting that listings have decreased but sale pendings have increased. Los Gatos is also on board with the good news bug noting, "The market is hot right now. Lots of multiple offers and we are even having the low range of high-end moving. Our San Jose Willow Glen office reports that sales picked up last week. Worthy to note that all but one were distressed properties. Multiple offers on one traditional sale in Almaden. The first buyer tried to low ball it after two weeks on and then walked away from it. A week later, the buyer came back with a slightly higher price that the seller countered and then another offer came in for a close to asking price. The second offer got the house. The first buyer waited too long and is now sorry they missed it.
• South County-South County continues to provide buyers with a myriad of choices-entry level, moderately priced homes as well as high-end inventory. Each category, however, is credibly priced and perceived by most to be an excellent value. This is reflected by increased attendance at open houses, office "up calls" and "walk ins." Morgan Hill's sales numbers have increased dramatically-though the average sales prices continues to decline.

As you can see, the market is heating up. Consumer confidence is finally on the rise and buyers are edging off the fence. For those who are still cautious, please consider all of the positive signs that are knocking at your front door. From the first time home buyer credit to the historically low interest rates to the increases in conforming loan limits to the generous amount of inventory to the motivated sellers to the...honestly, the list goes on. Opportunity is knocking and it is time for buyers to recognize this and jump in.

Until next week,

Greg Macres

Executive VP Western Region, Coldwell Banker NRT

Home Sales Continue to Rise in February

First of all, thank you to those of you who have referred your friends and family to us for their real estate needs here on the Monterey Peninsula! We are extremely lucky to have so many great clients who refer us business all year! You are truly the lifeblood of our business! We now have the ability to find our clients top performing realtors all over the country, so if you or someone you know is looking to buy or sell real estate regardless of where they are or where they are going, we can help them find a great realtor! Just give one of us a call or send us an email.

As you will read in a moment, the market is very interesting right now and both Lynda and I have been working extremely hard again in 2009. Lynda has commented that in her 33 years in the real estate business, she has never been in a market quite like this one! It is very demanding and now more than ever you need expert representation to help you navigate through these difficult economic times with what is probably your single largest asset.

Lets talk about what is going on here.

Monterey County is really a story of three pricepoints. There are the high end properties, over $4,000,000, the lower end, say under $600,000, and everything in the middle.

The high end continues to move at a somewhat less than normal pace as buyers and sellers are still having a difficult time "getting together" on price. But it does continue to move. There were just 4 sales over $4M in January and February combined, all in Carmel or Pebble Beach and there are 2 properties currently pending sale of the 74 listed in Monterey County in this price range. This isn't bad for this time of year, but it isn't great either.

The middle is a wide range of prices from $600,000 all the way up to $4,000,000 and normally would represent several different market segments. However, this entire range is currently suffering from the same set of issues which is a lack of loan programs to service this buyer segment. As such, the sales are pretty dismal. There are 711 active listings in this price range for the county and only 40 properties pending sale! For the months of January and February combined there were only 40 sales. They broke down as follows:

$4M-$3M - 4 sales (2 in Carmel, 1 in Pacific Grove and 1 in Pebble Beach)
$3M-$2M - 4 sales (all in Carmel)
$2M-$1M - 7 sales (3 in Carmel, 2 in Carmel Valley, 2 on Monterey/Salinas Hwy)
$1M-$900k - 3 sales (2 in Pacific Grove, 1 in Pebble Beach)
$900k-$800k - 4 sales (2 in PG, 1 in Carmel and 1 in Carmel Valley)
$800k-$700k - 7 sales - (2 in Carmel, 2 in No. Mtry Co., 1 in CV, 1 in Monterey, 1 in Seaside)
$700k-$600k - 9 sales - (3 in M/S Hwy, 2 in Carmel, 2 in Seaside, 1 in Carmel Valley,1 in PG)

As you can see, this is not a lot of sales activity for a two month period! However, the feds have just raised the conforming loan limit to $729,000, so this should help properties in the lower half of this price range to start to move again! Also, if you are looking in this price range and are prequalified or are paying cash, this is a great time to purchase! You are in the driver's seat!

The overwhelming majority of the sales activity is in the lower price ranges, under $600k. There are 2,038 listings in this price range and 574 of those are pending sale! This means there is less than 4 month of inventory and the market is very competitive for buyers with multiple offers on most of the properties that are selling. In January and February there were 338 homes that sold with exactly half of them being under $200,000!. The shear number of properties selling in this lower price range combined wit the lack in high end sales is the driving force behind the Monterey County average price and median price steep decline.

As you can see it is a great time for first time buyers to finally be able to purchase a home! Programs are great, interest rates are at historical lows...Many who thought they would never be able to buy a home here are able to purchase one right now! Both Lynda and I have been working with a lot of first time buyers who can now afford to own a piece of real estate here on the Peninsula!

It is also a great time to purchase investment property here. For the first time in longer than most can remember, there are investment properties that pencil out and either break even or even make a couple of bucks! Give us a call to discuss opportunities.


Here is the Monterey county statistics report for February.

Sales of single-family, re-sale homes were strong in February, rising 158.6% year-over-year. This is the eleventh month in a row home sales have been higher than the year before.

Sales of bank-owned property made up the majority of home sales in Monterey County in February.

Sales are concentrated in the lower-priced cities such as East Salinas, where year-over-year sales were up 1,766%, North Salinas, where sales were up 414%, and South County, where sales were up 357%.

These sales are pushing statistical prices down. The median price for single-family, re-sale homes fell 6.5% from January, and was off 53.8% year-over-year.

The average price for homes rose 18.1% compared to January, but was down 60.9% year-over-year.

Inventory continues to fall, dropping 31.8% compared to last February.

The sales price to list price ratio for homes was flat at 96.9%.

Condo sales were up 35% from January, and were up 80% year-over-year.

The median price for condos rose 17.6% month-over-month, but was off 81.1% compared to last February. Don't put too much weight into the condo numbers as there were only nineteen sales last month.

The real estate market is very hard to generalize. It is a market made up of many micro markets. For detailed history of a particular cities statistics, visit our website's Monterey County RE Stats page. For complete information on a particular neighborhood or property, give us a call.

I hope this was informative and that you enjoy receiving these monthly updates. If you know of anyone who could benefit from this information or who would just be interested in reading it, please feel free to forward it on or send me their name and email address and I can add them to our list of recipients.

Take care,

Mark

Oh by the way, if you or anyone you know is interested in buying or selling a home, we are never too busy for any of your referrals!

With the Holidays just behind us now, the numbers for Monterey, California are a bit on the sluggish side, which is to be expected. The number of sales in January reflects just how little was going on here in Monterey in the month of December. With jumbo loans still very difficult to get, and with the over abundance of lower priced investment opportunities in the surrounding areas, it is no surprise we only had 3 closed transactions for the month. But as you can see, there were only 5 sales last year in 2008 for the month of January. Historically the month of January is slow for Monterey and the rest of the Peninsula as tourism is slow, the weather is sometimes a challenge, and the locals are not making any significant moves over the holidays.

The real difference can be seen in the number of pending properties and in the average and median prices when compared year over year. January of 2008 saw 14 properties pending at the end of January while this year there are only 6! That represents a significant slowing in buyer activity. The average price is down 30% from a year ago to $455,000 and the median price fell 34% to $430,000.

Buyers are very particular right now and are looking for a deal. Foreclosures are starting to impact non distressed sales and buyers are becoming more bold with their offers and sellers are realizing they may not get a better offer than the first one. This can be seen in the sales price being 14% less than the asking price on average.

Sales in Monterey were rising steadily the second half of the year as many first time home buyers are taking advantage of the lower prices available to them and I would expect them to pick back up where they left off once winter ends.

Days of inventory hit a 2 year low in December. This was partially due to a strong month of sales and many sellers taking their homes off the market for the holidays.

Prices on the Monterey Peninsula rarely go down like they have in recent months! This is a great time to take advantage of the lower prices and the historically low interest rates to finally own a piece of Monterey real estate.

The real estate market is very hard to generalize. It is a market made up of many micro markets. For complete information on a particular neighborhood or property, call me or send me an email.

Monterey, CA Real Estate Statistics

Listings in Monterey, CA

Now that we've passed the months of talk regarding the Economic Stimulus Package and the Foreclosure Prevention Plan, we can finally move on. I for one am relieved.

It's time to get back into a position where we feel secure, where we feel confident and where we can once again make strong decisions regarding our future...and that includes decisions we make about real estate.

Right now what I am finding is that many buyers are on the proverbial fence. They've been waiting to see what was going to happen to interest rates. They were waiting to see what the results of the Economic Stimulus Package would be. And so they sit.

Now I realize that every individual situation is different so please don't take this as a broad based brush that I am painting with, but what I can say is that buyers may truly be in one of the best positions than they have been in some 50 years to purchase a home. Consider the benefits to today's homebuyer:

1) New $8,000 first time home buyer credit (and in most cases, the buyer does not have to repay the tax credit).

2) Reinstatement of FHA, Freddie Mac and Fannie Mae loan limits. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750.

3) Historically low interest rates. The fact is, right now interest rates are low-certainly by historical standards-and those low rates translate to increased purchasing power for buyers.

4) Though we've seen decreasing inventory in many of our markets over the last several weeks, we still do have quite a bit of inventory in many markets. This translates to more choices for buyers. We are also anticipating that Spring will bring on a lot of good, new inventory for us and that should bring in a surge of new buyers-for today's buyer's, that's competition for you.

My point in all of this is that you may not want to make the mistake of waiting. Sitting on the sidelines could cost you plenty in terms of higher housing prices, increased competition, fewer choices and higher interest rates. We live in one of the most desirable areas in the world and regardless of the recent slowing in the market, there is still plenty of pent-up demand. Even the most pessimistic analysts aren't predicting a decline in home prices, simply a slowing of appreciation rates.

The lesson I'd like to leave you with this week is that waiting for the real estate market to hit rock bottom may be a mistake. The only way to know that the market has "hit rock bottom" is when it is on its way up and by then, the window of opportunity is gone.

The current housing market offers a unique window of opportunity for confident buyers. The exciting news is that for the first time in quite a while, the stars are in alignment for consumers: mortgage rates remain low (certainly by historical standards), loan limits have been raised, there is an $8,000 first time home buyer credit and there is a large selection of homes to choose from. Now truly may be the time to buy and you may not want to make the mistake of waiting; because my guess is that if we were able to jump ahead 10 years from now, we'll be looking at this market as a thing of the past-a time when we all probably should have been buying a lot more real estate.

Here is last week's Market Watch by Joe Brown. Joe Brown is the President of Coldwell Banker Residential Brokerage's Silicon Valley, Monterey Bay and East Bay regions.

Friday, February 13, 2009

It Passed! Now What?

A compromise on the Economic Stimulus Package has been reached. The new price tag: $787 billion. That's below both the $820 billion House-passed version and the $838 billion Senate-passed version.

Just like with anything in life, the final package is all about compromise. Real estate advocates from NAR and Realogy President Richard Smith lobbied well on our behalf but in the end only a portion of the requests we had of lawmakers were made part of the final Economic Stimulus Package.

I am encouraged that lawmakers have now reached an agreement and we can finally move forward with some direct action.

The goal of the highly controversial Economic Stimulus Package is to create or save some 3.5 million jobs while helping to rebuild our nation's economy which has been in a recession since December 2007. Although, at the writing of this piece, the details of the legislation had not been finalized, we do anticipate a number of important housing provisions, including (as reported by NAR):

• "Homebuyer Tax Credit - a $8000 tax credit that will be available for qualified purchase of a principal residence by a first time homebuyer between January 1, 2009 and December 1, 2009. The credit does not require repayment. Individuals who purchase in 2009 using financing assistance from state and local mortgage bonds will be permitted to use the credit, as well. Click here for a chart with details on the first-time home buyer tax credit: http://www.realtor.org/wps/wcm/connect/b32db1004d05f6338052c5fd73e5610f/government_affairs_tax_credit_chart_021308.pdf?MOD=AJPERES&CACHEID=b32db1004d05f6338052c5fd73e5610f
• FHA, Fannie and Freddie Loan Limits - Revised loan limits for FHA, Freddie Mac, and Fannie Mae. Specifics have not been released but reports indicate that the 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher. Additional increases in individual communities may also be available at the discretion of the HUD Secretary.
• Foreclosure Mitigation & Neighborhood Stabilization - Funding for states and local communities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized."

In addition to these new elements, NAR continues to work with the Department of Treasury to implement a mortgage buy-down program. The details on that will surface over the next several weeks.

To view all of the housing provisions, click here: http://www.realtor.org/government_affairs/gapublic/uae_hr1_additional_provisions

So what's next? President Obama is pushing to get quick approval of the emergency package so he can sign it into law before the end of this three-day holiday weekend.

Once it is signed into action, Washington is eager to get the funds into the local state governments and ultimately the local economies so they begin to directly affect Main Street. Consider reading this article from CNN with more details on the package itself: http://money.cnn.com/2009/02/13/news/economy/stimulus_individuals/index.htm?postversion=2009021308

There's no question, it will take several weeks-if not months-before we begin to see some patterns or trends and for this package to have a full impact on our economy. But I am gratified that the government recognized the importance of passing the Economic Stimulus Package. The health of the nation's housing market is critical to the financial well being of every household in the country and that, of course, is front and center right here at home. I believe the legislation will help to stabilize the housing market, at a time when our country needs it most.

With this news in tow, let's take a look at this week in real estate:

• East Bay-Berkeley reports that buyers are definitely out there looking. Our floor time and walk-in traffic have been great. Two of our Berkeley Previews properties just went pending another listing in the $800s also went pending. Castro Valley reports that well priced, well-maintained properties are being snatched up in our local market due to decreases in inventory. We had a well-priced Castro Valley home that saw multiple offers that went pending (over asking, within five days of listing). Another clean, well-priced home in the San Lorenzo/Hayward area went back on the market and had three offers within two days. Having said that, prices continue to dip. Castro Valley pricing remains super competitive, with entry level properties hovering between $350,000 and $400,000. Danville reports that the upper end is showing signs of life. Four of our last eight sales were above $800,000 and were not REOs. Open houses also continue to be well attended in this market. Tri Valley Update: Since the first week in January 2009, Livermore active listings have decreased about 6% and total pending sales are up over 8%. Pleasanton active listings have increased 23% and total pending sales are up 20%. The active listings in Dublin have remained steady and the total pending sales are up almost 10%. Walnut Creek reports good open house attendance. First time buyers and investors are out there and actually making offers on listings. The entry level priced homes are selling.
• Monterey County-The activity level seems to be picking up somewhat. Agents are busy writing offers though getting a meeting of the minds between buyers and sellers is taking more counters and more time.
• North Bay-Our Greenbrae office reports that a home in Fairfax listed at $1.7 million had more than 183 people through its Saturday and Sunday open houses this passed week. One REO property came on the market at 8 p.m. and had two offers by noon the next day. Increased traffic at Agent open homes this past Sunday. One Greenbrae home listed at $1 million was in contract before the Sunday open - less than two days after listing. Southern Marin notes that while sales are still soft, open houses were heavily attended on Sunday with many seemingly real buyers. A $2.5 million property in Mountain View had almost 20 parties and that was the third open house. The Agent felt there were a handful of qualified buyers. We are seeing more listing that are starting to come on and slowly but sure the market is picking up. Petaluma reports a flurry of open house activity with 30-40 groups in numerous properties. Buyers are our in full force and Agents are bringing their buyers to open houses. We are continually seeing multiple offers in most price ranges.
• Peninsula-Half Moon Bay notes that Agents are more enthused this week as the phones are ringing and floor activity is on the rise. Purchase contracts are being written but are too low at this time for sellers to understand the offer is probably market value. Menlo Park Santa Cruz reports that buyers are circling but are slow to react. Sellers are listening to the advice of their Agents and are starting to price their homes competitively to get them sold. We did have a sale this week in Woodside that was over $3 million which is helping to breathe some life into the upper end. Palo Alto is noting an interesting trend. Activity at open houses varies from open home to open home and from price point to price point. We see 100 folks show up at a townhouse in Mountain View and maybe just two or three at a condo in Palo Alto. Our Woodside office noted one $3.5 million listing had three offers. Two others over a million also had multiple offers. The lesson: buyers will buy a property that is at the right price-ones that are "discounted" to today's market prices.
• San Francisco-Lombard notes a lot of fence sitters, price reductions and low offers. But the well-presented, well-priced homes are getting the contracts. Sales over $1.5 million are still rare. New construction is taking the biggest hit. The Market Street office notes that open house attendance was brisk. Buyers have stepped back a bit waiting for the results of the stimulus package and how it will affect them.
• Santa Cruz County-No information reported this week.
• Silicon Valley-It was a slow week. Correction. A really slow week. Our Cupertino De Anza office write, "The only thing that matters right now is a cheap price." Well of course that is debatable and is certainly dependent on the market-and the house for that matter-but what I would agree with is that buyers are looking for value right now. They are looking for value and only act when they see it. Los Gatos reported a number of short sales which is why our short sale seminars this week were so appreciated. San Jose Main is telling a bit of a different story noting that buyer activity is increasing. Open house traffic is up dramatically from the past weekend, especially with homes priced at $300,000 to $500,000. We are seeing increased sales activity and interest this past week, according to SJ Main. San Jose Willow Glen reports that open houses have quite a bit of traffic and floor calls are picking up slightly. Several Agents are working with buyers at this time so our hope is that it is just a matter of time until this interest turns into closed contracts.
• South County-No information reported this week.

What I'd like to leave you with this week is this: it's time to get in a position of optimism. We are in a great position for a turnaround. But we also must understand that this isn't going to be an easy road. The road we took to get here wasn't easy and the road ahead may be a challenge. But the up side is that we are on the road to recovery. Our market has been in neutral for some time and now it is time to put it in drive. The Economic Stimulus Package. The release of the second half of the TARP funds. These are all things that can and should help. Now it is up to our economy to do the rest.

Let's watch as the details unfold over the next few weeks and we'll wait to see whether the $787 billion in aid is our nation's answer to prosperity. All we can do is hope and remain optimistic.

Until next week,

JOE BROWN