John Juarez, DRE 01223788 CDPE, ePRO, SRES

Market statistics can show a variety of types of information. This market report is something that I created as a result of an article in today’s newspaper. The headline was “Crisis Reaches Upscale Homes”. The gist of the story was that homes across the San Francisco Bay Area that are in the higher price ranges are also reflecting the effects of the poor economy and continued problems in the real estate market. I ran some numbers on listings in Alameda and Contra Costa Counties in Fremont, Newark, Hayward, Union City, Pleasanton, Livermore, San Ramon and Danville to gain some insight into what the condition of the $1,000,000 plus market is today in Alameda and Contra Costa Counties.

As you can see, there are no $1,000,000 plus homes currently for sale in Newark or Union City. Real estate prices in those cities have always been somewhat lower that other nearby cities. Hayward, another city that is considered to have generally lower priced homes has a few high price listings. Fremont, Pleasanton, Livermore, San Ramon and Danville offer a variety of homes that are priced in excess of $1,000,000. In all of the cities surveyed, only one high price house is currently listed as an REO. There are eleven short sale listings. That hardly seems like an oppressive number spread across eight cities.

The newspaper article painted a worse picture than is shown by the multiple listing service. That is because the newspaper used different source data. If you look at the mls, the upper reaches of the market are not in as desperate straights as the entry level portion of the market. But that is not surprising. Many entry level buyers could barely afford their new homes. They more often live from pay check to pay check. When there is a financial problem their homes often become the newest short sale or REO listing. The upper level of the market tends to be occupied by homeowners who have deeper pockets, more resources and more staying power until they are forced to give up their houses.

Homeowners of $1,000,000 plus homes are not immune to losing their homes. They are less likely, however, than the owners of sub-$500,000 homes.

The latest S&P/Case-Shiller is out. Through November, 2011, prices were down in 19 of 20 cities surveyed compared to the previous month. Prices are also down for most of the cities on a year over year basis.

In the San Francisco Bay area, prices are down 1.9% in November compared to October and 5.5% from a year ago.

Are you surprised? If you are you don’t listen to or read about the daily news. We have heard and continue to hear – and read – that the real estate market is in the doldrums. We hear that prices will continue to get worse or better or have bottomed out. It depends on what time of day it is and who you listen to.

If you are a buyer, I think two facts outweigh the chance that real estate values may decline slightly in the months to come before they start to recover.

Fact 1: Prices are affordable in most areas compared to where prices were a few years ago. Prices have tumbled. The house you thought that you could never afford may now be within your reach.

Fact 2: Interest rates continue to be unbelievably low. Interest rates look like they will continue to remain low for the foreseeable future but we all know that rates will eventually go up.

Do you think that you have a talent for timing the market that others do not possess? No one is going to sent you a test message to let you know that prices have bottomed out and it is time to buy!

The window of opportunity is open right now. It will probably stay open for a while, I agree. Don’t wait until it starts swinging closed.

The market statistic for Fremont, Ca. for 1-12-12 show that inventory has moved up slightly from year-end 2011 but is still far lower than the inventory figures for the end of September, 2011.

It does not matter whether you are considering the purchase of a condo, townhouse or single family detached home. It does not matter whether you want a traditional sale, short sale, or REO – or if you would rather steer away from REOs and short sales – inventory is thin.

What does that mean? The law of supply and demand has not been repealed. Demand may be down due to prevailing economic forces. But demand has not disappeared. Supply is definitely down. There are obviously fewer houses for sale than in the recent past.

If you see a well located, attractive home, other buyers will also find it. That home will get lots of attention. If it happens to be competitively priced it will probably receive multiple offers. It may even sell for more than the asking price. That is how the law of supply and demand works in Fremont, Ca. and everywhere else.

By the way, unattractive REO’s are also selling with multiple offers if the offering prices make sense. The same can be said of short sale houses.

Prices have tumbled from the height of the market. Interest rates are at record lows. Do you really think that you can “time” the market? Now is a good time to buy.

Multiple offers!!?? What?? In Fremont, Ca. How can that be? All of the news stories are stressing that the economy is still poor, home sales are poor and home prices are not going up. The prevailing wisdom among many people with whom I speak is that low-ball offers are the way in which buyers should make offers these days. At least that is what buyers tell me.

Well, I don’t think low-ball offers will carry the day when there are 30 offers on one house! Wow! Thirty offers! What year is this? Are we in 2004?

Not only did that house receive a surprising number of offers but the house itself is an REO! Aren’t REOs supposed to sell at a big discount from the market price compared to a “normal” sale? At least that is what buyers tell me.

The house is question is located in the attendance area of one of Fremont’s desirable schools. We all know how important location is when it comes to real estate. While the house is an REO, it does not appear to need much work to make it move-in ready. The list price was realistic.

What happens when an attractive, well located, well priced home goes on the market? It sells – often with multiple offers and over the asking price. That is the market at work.

I recently listed a short sale townhouse. Within less than two weeks, three offers came in. All were strong. One was cash. The real estate was listed at a price that the short sale bank will probably approve. No raving deal for the buyer but a fair price, in my opinion.

It is too early to know the final prices of either of the properties cited above. What we do know is that inventory is slim. Buyers are looking for real estate that makes sense. Attractive, well priced, well located properties will get lots of attention and will sell strongly.

Prices have tumbled. Interest rates are at record lows. The window of opportunity to buy the real estate that makes sense for you is wide open.

Market Statistics for Hayward and Castro Valley, Ca. 12-31-11

Final Report for 2011!

What we can see from these figures is that Hayward has a larger number of listings that Castro Valley. No surprise there – Hayward is a good size city and Castro Valley is a much smaller unincorporated area of Alameda County. They are contiguous so many buyers cross over and shop for housing in both cities.

The absolute number of homes for sale has dropped in both cities in the last two months. That reflects the market in all parts of Alameda County. Inventory is down across all cities in Alameda County.

Hayward continues to have a large percentage of distressed sales. Again, that is not a surprise since Hayward real estate is generally lower priced. The first time buyers who bought up so much of the lower priced homes when the market was boiling have been hard hit by REOs and short sales.

One thing that is clear to me is that right now is a window of opportunity for buyers. Prices have crashed and may be bottoming out. Interest rates are at historic lows. In my opinion, anyone who buys a home now will look back in a few years and be very satisfied that they made that decision. There continues to be many opportunities to acquire attractive real estate in both Hayward and Castro Valley. Now is the time to take advantage of that opportunity.