Lively Estate

Bay Area's Best Schools For Your Real Estate Buck

2011-04-27T12:40:00.001-07:00

According to a Forbes.com blog published yesterday, six of the Bay Area cities get into the "Best Schools For Your Real Estate Buck" list - they are Moraga (overall #7), Piedmont, Lafayette, Palo Alto (overall #29), Orinda, and Cupertino. Here is the complete list broken down by median price categories.

Homes $800,000 and Up

Rank	City	Median Home Value	Ed Quality Index
1	Manhattan Beach, CA	$1,278,980	97.69
2	New Canaan, CT	$1,195,820	91.57
3	Lafayette, CA	$811,210	89.58
4	Palo Alto, CA	$1,080,980	89.23
5	Westport, CT	$931,690	87.81
6	Darien, CT	$1,044,750	87.14
7	Orinda, CA	$851,990	86.68
8	Weston, MA	$1,200,280	86.58
9	Rye, NY	$1,265,020	85.74
10	Cupertino, CA	$892,580	85.18

Homes $600,000 to $799,999

Rank	City	Median Home Value	Ed Quality Index
1	Mercer Island, WA	$708,740	99.12
2	Moraga, Ca	$722,010	97.69
3	Basking Ridge, NJ	$685,300	94.17
4	Jericho, NY	$644,890	94.17
5	Hinsdale, IL	$651,220	92.25
6	Winchester, MA	$601,920	90.36
7	Potomac, MD	$749,630	89.60
8	Concord, MA	$611,320	89.56
9	Wilton, CT	$683,300	88.48
10	Piedmont, CA	$730,620	87.96

Homes $400,000 to $599,999

Rank	City	Median Home Value	Ed Quality Index
1	Parkland, FL	$426,390	95.98
2	Southlake, TX	$476,880	95.74
3	Severna Park, MD	$417,090	93.22
4	Sammamish, WA	$519,060	92.78
5	Belmont, IL	$551,920	90.90
6	Madison, CT	$450,350	90.06
7	Syosset, NY	$542,220	89.14
8	Westwood, MA	$516,280	88.98
9	Lexington, MA	$581,330	87.70
10	Greenwood Village, CO	$552,020	87.96

Homes $200,000 to $399,999

Rank	City	Median Home Value	Ed Quality Index
1	Falmouth, ME	$351,550	100
2	Barrington, RI	$296,010	97.96
3	Bedford, NH	$293,730	97.96
4	Brookfield, WI	$241,260	94.10
5	Lake Oswego, OR	$392,040	93.74
6	Edina, MN	$317,690	93.59
7	Brentwood, TN	$379,370	90.29
8	Mequon, WI	$316,010	90.29
9	Carmel, IN	$246,910	89.42
10	Cedarburg, WI	$240,770	88.22

A Year in Review and 2011: A Real Estate Forecast

2010-12-16T16:07:00.000-08:00

Tax credit. Historically low mortgage rates. Increased affordability of homes. Those were the factors that defined the housing marketing in 2010. But all of that leaves us wondering, what is next for real estate. Is the worst behind us? Are we finally on the road to recovery? Will sales bounce back? Will the luxury market recover sooner or later than the rest of the market? OurReality Check writer recently sat down with Coldwell Banker Residential Brokerage President Rick Turley to answer these questions and more as they discussed the 2010 housing market and what we may expect in 2011.

How would you say the housing market faired in 2010? Did it live up to your expectations or falter?
“I would call 2010 a schizophrenic year. It was basically two years built into one. The first half we had the tax credit and we saw people scurrying to get real estate transactions completed to take advantage of that unique market. The second half of the year was more comparable to a normal market, given the economic conditions that we are faced with today. Overall, I would say that the market lived up to my expectations.”

Do you feel the end of the tax credit slowed sales in the second half of the year?
“Absolutely. It has been very evident in the last six months that we have seen slower sales in almost all price ranges. For example, according to Data Quick News’ November 18 report entitled, ‘Bay Area Home Sales Fall Sharply; Median Price Dips Below Last Year,’ ‘A total of 6,122 new and resale houses and condos closed escrow in the nine-county Bay Area last month, down 3.3 percent from 6,334 in September and down 22.8 percent from 7,933 in October 2009.’ In comparison, just four months ago, following the expiration of the tax credit, Data Quick reported, ‘A total of 8,373 homes closed escrows in the nine-county Bay Area, up 1.3 percent from 8,264 in May but down 3.1 percent from 8,644 in June 2009.’ That is a 26% decline in sales when comparing June closed sales figures to October’s closed sales figures which is a statistically significant drop. Having said that, it’s really hard to compare the two periods because so much of the demand was swept up in that first half of the year. Regardless, the tax credit was very beneficial for our industry. It was what we needed to navigate the housing market through the recession.”

What do you anticipate happening in the 2011 housing market?
“I tend to agree with the California Association of Realtor’s forecast, as reported in the October 4, 2010 C.A.R. 2011 Housing Forecast, that ‘Sales in 2011 are projected to increase a lackluster 2 percent to 502,000 units compared with 492,000 units (projected) in 2010.’ The CAR report went on to note, ‘After two consecutive years of record-setting price declines, the median home price in California will climb 11.5 percent in 2010 to $306,500 and increase another 2 percent in 2011 to $312,500, according to the forecast.’ We have not seen the dramatic increases or decreases in our market that have occurred in some areas of the country; therefore we have not had the volatility and stress that many markets have felt. What we have today is what I would describe as a relatively balanced and flat market with slight variations based upon neighborhood, property demand and property merchandising. “

What are the biggest differences between today’s housing market and that of the earlier part of this decade?
“One of the trends we are seeing now as opposed to several years ago is luxury end buyers choosing smaller homes. Today’s buyers are typically looking for a smaller home on a smaller lot; a home that is more manageable. Today’s buyers are not afraid to spend money on the best fixtures and features but they want a smaller space to do it in. Many of our upper-end buyers are also looking for energy efficient properties.”

A year ago, we sat down and you said, “In order to have a market-wide recovery, we have to be able to engage the move-up buyer.” Have we done that?
“We have not fully mobilized the move-up buyer. And at the same time, we’ve lost some strength for the entry-level buyer, following the expiration of the tax credit as reflected in the 26% drop in sales that I spoke about earlier. As we enter 2011, the improvement we would hope to see is in the mid-range, move-up buyer, which will be greatly impacted by the unemployment levels. If people aren’t secure in their work and in their futures, they won’t make the big-ticket purchase items like a house. I believe that to really jumpstart the market we will need a combination of three factors: (1) at least the current level of affordability; (2) a brighter economic outlook; and (3) improved access to credit, especially for higher-cost homes.”

What are the biggest challenges facing consumers in the real estate market right now?
“Appraisals and financing are by far the two biggest obstacles. Appraisals have been a huge challenge as the Lenders continue to change the criteria used to assess fair market value. Securing financing, continues to pose challenges for some buyers. Buyers who have a job, verifiable income, minimal debt and a good credit score, are typically able to secure financing. Conversely, buyers who are self-employed, cannot verify income, have challenging credit or who have large amounts of debt are having a difficult time obtaining financing.”

Do you expect mortgage rates to remain low?
“I really wish I knew. Some analysts expect mortgage rates to remain low for the time being. However, Market Watch reported in its October 26, 2010 article, ‘Record-low mortgage rates will be gone in 2011: MBA’ that ‘Mortgage rates may be as low as they’ll get – rates are on course to rise, slowly moving toward 5% by the end of next year, according to the Mortgage Bankers Association’s economic forecast.’ While that bump may not be immediately alarming, it is important to point out that even just a quarter of a percent increase could significantly affect an individual’s purchasing power.”

What do you recommend to today’s homebuyer?
“ Assuming that they are secure in their job, this may be the best opportunity to buy as much home as they are comfortable with owning. These are unprecedented times when it comes to buyer opportunities. The mortgage rates are historically low. The inventory selection is plentiful. It appears that everything is in alignment. For some, it may be a great time to purchase a second or vacation home. There is a magical feeling when you own your own home; a place to create memories. It’s important that we never lose sight of that, even during these difficult financial times.”

What do you recommend to today’s seller?
“If you do not need to sell, meaning that you are not interested in taking advantage of the move-up market, you’re not relocating, you’re not in a financial position that requires you to sell, then this may not be the best time to sell. However, there are still opportunities to get a fair value on the sale of your home. If you are in a position to sell, then I urge you to get in the car with your Realtor and look at the competition. Get a firsthand look at the price and condition of homes that are similar to yours. Then come back and make an educated decision about the pricing of your home. Be realistic about your price. Price it in the range that is reasonable. It’s not about what you want for the house; it’s what buyers are now willing to pay for it. It is also important to stage your home properly. Clean out the clutter. Make sure the home sparkles. Paint the front door. Make your home look the very best it possibly can because right now there is a lot of competition out there and if your home doesn’t shine, buyers will move on.”

What do you foresee happening in the luxury market?
“The upper-end is probably going to be the first area of the market to recover because that market has softened since the middle of last year. Buyers of upper-end properties appear to be patiently waiting for signs of an economic turn-around which may mean that we have a build-up of affluent, impatient buyers. Once those buyers feel more confident that the economy is improving nationally as well as in the Bay Area and that the employment figures improve, then these are the buyers that are going to be making a move. If that happens, then the rest of the real estate industry will be pulled forward. If I were asked which market has the best chance to improve in 2011, I believe the answer is the luxury market.”

What final message would you like to leave with our readers?
“You’ve got to be smart. If now is a good time for you to buy, then you may want to purchase the most home you are comfortable with owning. With interest rates at historic lows, affordability high and inventory levels plentiful, it may make sense to get in the market now. What I do know is that this unique combination won’t last forever and it’s important for consumers to be aware of that fact and act before it’s too late.”

If you would like more information about the opportunities that are available in today’s housing market, please contact me today.

Weekly Market Watch

2010-12-04T18:41:00.000-08:00

Signs to look for in a housing market recovery

While the nation’s housing market has bounced back from the depths of the recession, the nascent recovery has been slow and sporadic in many parts of the country, including here in the Bay Area. The question on everyone’s mind is, “When will the market return to normal?” No one knows for sure when that will happen (the definition of “normal” is rather subjective - it seems today’s market is the “new normal”), but there are a number of signs out there that we should be watching for – economic indicators that will point to a more robust recovery in the market.

On a macro-economic level, consumer confidence and unemployment levels are crucial, along with overall economic growth figures such as the nation’s GDP. Buyers won’t take the chance on purchasing a home if they’re out of work, or concerned they may be before long. If they don’t have confidence that things will be getting better, they’re not likely to move forward with a major purchase.

Additionally, because real estate is such a local business, our local market indicators will also give us some clear signals. In addition to seeing overall sales rise in our local communities, we will be looking for inventory levels to fall, median prices to edge higher, the average days on market figure to drop, and the upper end of the market to heat up. Historically, it’s been the high-end market that comes out of a recession first because buyers have the means to take advantage of good values.

So are we seeing these signs yet? Nationally, it was a mixed bag this week. We enjoyed a slew of positive economic data points early in the week – rising car sales, upward revisions to growth and productivity and a busy start to the holiday retail season. Private sector payrolls rose by the most in three years in November. And finally, the Conference Board reported Tuesday that the Consumer Confidence Index jumped to 54.1 in November, up from a level of 49.9 a month earlier. Although the index remains well below its prerecession levels (which were above 100), the boost provides an encouraging sign for the economy.

But as we took two steps forward with the positive economic data, we went one step backwards on Friday when the nation’s jobs report was released. November's job growth came in far lower than expected and the unemployment rate rose to 9.8%. U.S. employers added 39,000 jobs to their payrolls in November, the Labor Department reported. That marks a major slowdown from October, when the economy added an upwardly revised 172,000 jobs. The number also fell short of the 150,000 jobs economists were generally expecting. However, most economists are concluding by week’s end that the mixed bag of employment data was overall a bit more positive than negative.

Locally, we’ve seen encouraging growth in luxury home sales. It’s widely believed that the so-called “smart money” – well-healed investor – is the first to jump back into the housing market, ultimately leading a sustainable recovery in the overall market. The Month’s Supply of Inventory of San Francisco homes over $3M dropped to 6 months in November, 18% improvement over November ’09 and 24% better than November ’08 when it was at 8 months supply. While San Mateo County’s number is quite a bit larger at 15 month’s supply of homes over $3M, it’s a remarkable 34% improvement over November ’09 when it was at 24 month’s supply.

Sales of million-dollar homes in Silicon Valley and the median sale price edged higher in October, according to Coldwell Banker Residential Brokerage’s luxury home report. It was the eighth time in the past nine months that year-over-year sales in the luxury market increased. Luxury sales also edged higher in the East Bay. In Marin, although sales dipped slightly in October, the median price rose 7 percent.

The broader Bay Area housing market, however, is still working to move back to normalcy. Sales in October were off sharply from year ago levels. Analysts believe much of the drop had to do with the fact that 2010 home sales were “front-loaded” earlier in the year as buyers rushed to take advantage of the tax credit before it expired. But certainly tighter credit and concerns over jobs played a role.

So where does this all leave us as we head toward year-end? Our local housing market recovery – like those in many regions – has been slow and choppy at times. Yet we are seeing enough positive signs overall to believe better days are ahead of us as we move into the new year. For those looking to buy a home, the stars are in perfect alignment. Interest rates are at historic lows in the low-4% level in 30-year fixed-rate loans. Home prices are very attractive. And housing affordability is at the highest point in years. Buyers need to examine their own “personal economy” and decide if they’re in a position to invest in a home. If they are, there may never be a better time.

North Bay – We are still getting word of good buyer traffic at open homes in all parts of Marin. Newer listings are getting the bulk of the traffic, showing that the buyers may be dissatisfied with what’s currently on the market (or perhaps the prices at which those homes are selling for). Our Greenbrae manager says that we many buyers are looking to close before the end of the year. In Petaluma, serious buyers continue to circle the new inventory, snatching it up as it comes on in the under $300,000 range. Open Houses are well attended. One west Petaluma property had 27 groups through. Inventory is scarce in the under $500,000. More and more buyers in the $600,000 to 800,000 range trolling the market. The Northern Marin market is reflecting a seasonal slowdown across the board- higher-end properties are the slowest moving. Investors are still looking for below market deals and often pay cash. A similar story is told by our Sebastopol office. The seasonal slowdown came early this year. The buyers that are looking want to see everything on the market and are slow to pull the trigger. In Santa Rosa, listing activity has slowed the past 2 weeks but sales are holding steady. Open houses are unpredictable; many get only a few groups while others are seeing 30 groups through. Likewise, Southern Marin has seen a typical end-of-year slowdown with both sales and inventory declining.

San Francisco — Sales are increasing and inventory dropping, according to our San Francisco Lakeside office. Nonetheless, buyers are highly price sensitive. It's like holiday gift shopping the way that buyers are looking for bargains. A $2,000,000 cash buyer opted for a $400,000 cash purchase as an investment because he could get it for 50% off. The Lombard offices that that despite lots of talk of a slowdown, the local market had an OK start to November. Open house traffic is slower but still good numbers on fresh listings. The Market Street office reports steady open house attendance over the weekend at all price points and areas. A condo in the Dolores Park area received 14 offers with a very quick close. Properties that went into contract over the last two weeks range in list price from $240,000 to $2,879,000 – buyers for all price points are out there. Finally, the Noriega office says both sales activity and inventory is on the decline of late. But buyers are out there; if they see value, they will make the commitment. A four unit bldg in the Sunset had 3 offers in less than a week and is in contract for full price. Another listing in Glen Park went into contract over asking price being on the market for less than a week. Another agent in the office submitted an offer on an 18 unit building, $150,000 over asking, and all cash and did not get the deal. The offer came in 3rd place, there were 7 offers on it.

SF Peninsula — Our Burlingame office says there is a general feeling of a slowdown, although it could well be the typical slow holiday slowdown. Well priced, or rather “DEAL” priced properties can’t be kept a secret. One new listing that had a huge price reduction from the previous broker has kept the phones ringing with multiple disclosure packets out for the Dec. 6th offer date. The slight rise in interest rates has moved some buyers and certainly refi “fence sitters” into action. Over the hill in Half Moon Bay, sales activity has been steady while inventory is falling. The local market remains fairly steady in Menlo Park and Palo Alto. But in Redwood City and San Carlos, things have definitely slowed down as the holiday season kicks into full swing. The same is true according to our San Mateo office manager. Finally, in Woodside, listing inventory is steady while sales activity has dipped.

East Bay –Buyers continue to wait for prices and interest rates to decline further, our Berkeley manager says. Additionally, buyers seem to be foregoing previously sought-after neighborhoods like Kensington and Berkeley’s hills and wanting high scoring “walkability” areas. Both sales and inventory are on the rise, according to our Oakland/Piedmont office. In Castro Valley, agents are continuing to see a good turnout at their open houses. In Orinda, inventory has decreased. Sellers are waiting until after the holidays to list their home. Danville had a significant jump in sales activity in the past week, particularly in condo/townhouse sales. Inventory is decreasing – they have about a three ¼-month supply. Our Pleasanton manager says the local market is very slow. Buyers are looking but not making as many offers. In Fremont, surprisingly the market is holding steady, contrary to the typical holiday slowdown. Active inventory and total pending sales in the Tri-Valley area have declined in all three cities – Livermore, Pleasanton, and Dublin – since the first of November. This is pretty typical as we move into the holiday season. Finally, in Walnut Creek, we have experienced a positive spike in sales in the past week. In addition to entry and mid level priced sales, we are seeing our upper end market selling too. One of our Walnut Creek properties priced at $1,000,000+ went pending after 180+ days on the market. A bank owned listing located in Alamo priced at $l,500,000+ received 7 offers

Silicon Valley – Our Cupertino office reports decreasing sales and inventory. Nonetheless, many agents are working hard despite the upcoming holidays and open house traffic remains steady. In Los Gatos, our local manager says both sales and inventory have increased and the overall market has picked up. Sales have been steady in Los Altos, but inventory is falling. Open house traffic is slowing to a crawl, according to our local manager. New listings are rare and many properties are being taken off the market for the holidays. Our San Jose Almaden office reports that sellers of homes above $1 million need to aggressively price their property if they hope to solicit an offer. The low-end market continues to be consistent but not as hot as it was 6 months ago. Investors are still grabbing low-end homes with all cash offers from banks. Sales are taking longer to close for a variety of reasons though they are staying intact, our San Jose Willow Glen office says. Open houses have slowed down a little. Finally, in Saratoga, there seems to be a reduced number of problem escrows in the last few weeks. The local manager has seen a number of multiple offers lately including one where a Saratoga listing had 8 offers! The properties priced right and in the best locations have no problem selling as always.

South County – In a recent Inman News article, author Matt Carter, suggests that the housing recovery hinges on lending. He writes that, “money is easy, but credit is tight—another way of saying what many would-be homebuyers have discovered during the downturn: loans may be dirt cheap, but they are hard to come by.” All of this manifests itself in the local South County real estate market, our Morgan Hill manager says. There is demand – but jobs and consumer confidence, along with the lending crunch, remain critical drivers when a buyer is trying to make the decision to purchase. In Gilroy, sales and inventory have declined in recent weeks. But several agents are writing offers with people they have met at open houses. This time of the year seems to separate serious buyers from lookers.

Santa Cruz – As in many real estate markets the Santa Cruz County market took a tumble in October with about 100 homes closing escrow, which was down 38% over October of 2009. The median price dipped to its lowest level since January to $501,250. Prices continue to be affected by foreclosure and short sale pricing; foreclosures are up 20% over last year's record setting pace. Short sales are reported to be taking longer, with less incentive it seems for the banks to work with the borrowers. The short sale process has become more cumbersome and lien holders are requesting additional money at the last minute. Inventory is up slightly with about a 9-month supply of inventory.

Monterey Peninsula – While Peninsula market generally slows as the holidays approach, we seem to be continuing at a steadier pace of sales than in past years. It appears that the homes well priced for this market and the continuing low mortgage rates are helping sales maintain a consistent, though not earth-shattering, pace of three to five new sales per day for us. New listings have slowed, however, and some listings that have been on the market for a year or more are now expiring, with many sellers deciding to take those properties off market until the new year.

A final note on the Previews Market: As I mentioned above, the high-end market is showing some positive signs although it really is a market-by-market situation. Some regions are seeing stronger interest than others. We noted several weeks ago that Woodside had a huge uptick in sales over $5M, all within just a few weeks. In Hillsborough currently, there are 72 active and 18 pending listings, not a bad ratio. We had a sale of an $8.5 mill listing this week. Several high-end homes that have been on the market 8 months or longer have just sold in recent weeks. Many buyers are bringing cash and many buyers are coming from outside the U.S.

Homes of Titans Who Rule the Tech World

2010-11-15T13:07:00.000-08:00

After learning of Steve Jobs' soon-to-be demolished historic home, and Mark Zuckerberg's life as a month-to-month renter, we decided to see what other types of real estate today's tech titans like to call home. Here's where some of the biggest (and richest) tech-industry moguls take a break from their Web-ruled world.

Bill Gates, Microsoft co-founder
Medina, Washington

Gates Estate, Tim Crosby, Getty Images

Most widely known as chairman and co-founder of Microsoft, Bill Gates is the richest person in America and the 2nd richest in the world. With a net worth of over $54 billion, it is safe to say that Mr. Gates can live absolutely anywhere he pleases. And, out of that "anywhere," he resides in a 66,000-sq ft, 8-bedroom, 25-bathroom compound nearSeattle in Medina, WA. Gates' 5-acre estate sits on the edge of Lake Washington and includes both a family and guest wing, 6 kitchens, a 60-foot swimming pool, domed library, 1,000-sq ft dining hall and is said to be chock full of tech-savvy amenities (i.e., secret bookcases and underwater music system). The home's Zestimate® value is over $145,000,000.

Steve Jobs' Palo Alto Tudor

Steve Jobs, Apple, Inc.
Palo Alto, CA

The face of Apple, Steve Jobs, joins his fellow CEO cohorts in the Northern California residential district. One of the original co-founders of Apple, Jobs worked as the Pixar CEO for several years before returning to the Apple executive team in 1996. So where does the mind behind the iMac, iPod and iPhone take a break from his iLife? Tucked away on a Palo Alto corner of Waverly Street, Jobs enjoys family time in his 1930s Tudor-style home. The 5,768-sq ft house sits on over a half acre and boasts 7 bedrooms and 4.5 bathrooms. Jobs is also homeowner to an historic, Spanish colonial home in Woodside, CA. Originally built in 1929 for copper mining mogul Daniel Jackling, public record shows that Jobs first purchased the house in 1984. Since 2001, however, Jobs has been fighting preservationists in an attempt to tear down and replace the 30-room mansion with a more modern home. According to Apple Insider, the appeal to his demolition permit was finally removed in August 2010.

Zuckerberg's Palo Alto rental

Mark Zuckerberg, Facebook
Palo Alto, CA

One of the youngest members of Forbes' Richest Americans is Facebook co-founder and CEO, Mark Zuckerberg. The 26-year old Harvard dropout has an estimated net worth upwards of $6.9 billion and, joining other tech-CEOs like Steve Jobs and Larry Page, Zuckerberg lives in the pricey area of Palo Alto, CA, adjacent to YouTube co-founder Jawed Karim. Despite the billionaire status Zuckerberg shares with his tycoon neighbors, one factor he doesn't have in common is a giant mortgage payment. As previously reported by Zillow, Zuckerberg let Oprah's camera crew into his home revealing a happy (and humble) lifestyle as a month-to-month renter just a few blocks away from his office at Facebook Headquarters.

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Michael Dell's Austin estate

Michael Dell, Dell Inc.
Austin, TX

Dell Inc., is the second-largest PC manufacturing company in the world. While the company sits just behind Hewlett-Packard, the founder, chairman and CEO of Dell Inc., Michael Dell, takes the cake when it comes to homes, living in perhaps the most expensive residence ever built in the state ofTexas. Nicknamed "the castle," this 33,000-sq ft mansion sits on over 20 acres and includes 8 bedrooms, 8 full bathrooms, 13 half bathrooms, a restaurant-quality kitchen, conference room and indoor and outdoor swimming pools. The billionaire (estimated net worth of $13.5 billion) enjoys this expansive property with his wife, Susan, and four children.

Mark Cuban, Broadcast.com
Preston Hollow, TX

Mark Cuban's Preston Hollow home

Broadcast.com co-founder, Mark Cuban, made his billions when he sold the Web radio company to Yahoo! in 1999 for $5.9 billion. As the owner of the NBA's Dallas Mavericks, Cuban makes his primary residence in Dallas, living in one of the most expensive properties in Dallas County. The 24,000-ft mansion is located in Preston Hollow, TX, and is filled with 10 bedrooms, 13 bathrooms and more than enough room for wife, Tiffany, and their three children.

Lawrence "Larry" Ellison, Oracle
Woodside, CA

Larry Ellison's Woodside estate

Oracle founder and CEO, Larry Ellison, started the computer tech company in 1977. Ellison racks up an approximate $1.84 billion salary, placing him at the top of The Wall Street Journal's list of best-paid CEOs. In addition to making sizable charitable donations, Ellison shows no shame in spending his self-made millions on personal items. His prized possessions include a private yacht, private jet, numerous exotic cars and a Woodside, CA estate, inspired by ancient Japanese architecture. Ellison's unique property spreads over 23 acres, includes a 7,800-sq ft main house, 9 other buildings and sits on a 2.3-acre, man-made lake. Before constructing the custom compound, Ellison sifted through a 5,000-sq ft Manhattan penthouse, 8,000-sq ft Atherton mansion, and spent over $180,000,000 on 12 properties in Malibu. His most recent real estate investment includes a $10.5-million splurge in January 2010 on the historic Astor's Beechwood Mansion in Newport, RI. Ellison'sWoodside, CA property remains as the software tycoon's main residence.

James "Jim" Clark, Netscape
Miami Beach, FL

Jim Clark's Miami Beach, Florida home

Founded in the early 90s, Jim Clark and Worldwide Web browser creator Marc Andreessen, founded computer services company, Netscape Communications. Though he made his millions in the Silicon Valley scene, Clark has since married Australian model, Kristy Hinze (36 years his junior) and spent his most recent years in 6,200-sq ft penthouse at the Setai building in Miami Beach, Florida. The Thai-inspired home has 3 bedrooms, 2.5 bathrooms and floor-to-ceilings windows and a rooftop terrace. For those looking to swoop up the digs of this CEO, you're in luck. Mr. Clark's luxurious pad is on the market for $27 million.

Eric Schmidt, Google
Atherton, CA

Eric Schmidt's Atherton estate

Recently in the news explaining blunt statements about the company's "Street View" tool, Google CEO and former Apple, Inc. board member, Eric Schmidt, enjoys his non-Google time with his family in the affluent neighborhood of Atherton, CA. Located on a large, private lot, Schmidt's home is valued around $3.7 million and has approximately 4,840 sq ft with 5 bedrooms and 3.5 bathrooms. VirtualGlobetrotting also reports that Schmidt purchased a $20,000,000 Montecito, CA property fromHollywood couple Ellen Degeneres and Portia Di Rossi in 2007.

Meg Whitman, eBay
Atherton, CA

Whitman's Atherton estate

Not too far from Schmidt lives former eBay CEO, Meg Whitman, who recently lost the race for California governor to Jerry Brown. Once named one of Fortune's top 5 most powerful women, Whitman has since retired from the boards of eBay, Procter & Gamble and DreamWorks, all in preparation for the governor's race. Public records show that Whitman's home contains 3,700-sq ft and is located in Atherton, CA. With an estimated net worth of over $1 billion, one can assume this isn't the priciest pad Whitman could afford.

Evan Williams' S.F. Victorian

Evan Williams, Twitter
San Francisco, CA

Founder to several Internet companies, Evan Williams is most notably known as CEO of Twitter - a position he stepped down from in October 2010. Also, as Twitter's co-founder, Williams' most recent real estate move was from a SoMa penthouse to a Noe Valley property in San Francisco. Purchased for $2.4 million, the modern Victorian home spreads over 3,000 sq ft and has 5 bedrooms, 5.5 bathrooms, fenced yard and charming guest house.

Coldwell Banker Bought Cashin

2010-11-11T16:59:00.000-08:00

Coldwell Banker Residential Brokerage has acquired Cashin Company Realtors, the distinguished Peninsula brokerage.

With seven branch offices, 270 sales associates, and more than $1 billion in annual sales volume, Cashin is one of the top local brokerages on the Peninsula. But beyond its size, Cashin Company is a highly respected boutique agency with a long, proud tradition of excellence in serving the upscale Peninsula market.

By bringing Cashin Company into the Coldwell Banker Residential Brokerage family, we are able to increase our market share in this prestigious part of the Bay Area, and continue to build on our leadership position in Northern California.

Different Perspectives

2010-11-09T16:14:00.000-08:00

Your House As Seen By:

Yourself...

Your Buyer...

Your Lender...

Your Appraiser...

And....
Your County Tax Assessor...

Weekly Market Watch

2010-10-31T21:57:00.000-07:00

‘Smart Money’ Beginning to Move Back Into Market as Luxury Sales Improve

Woodside is home to many Silicon Valley executives, hedge fund managers and other well-healed residents. When the tech bubble inflated in the late 90s, housing prices here soared along with the NASDAQ index. And when tech valuations came back down to Earth, so did home prices, although this remains one of the most-sought-after real estate in the country. It may not be Beverly Hills 90210, but Woodside 94062 is an excellent barometer in how the very high end of the housing market is faring.

So how’s the temperature in the Woodside real estate market? After a long cool spell, things have been heating up a bit in recent weeks. One statistic catches my attention: Over the past year ending Sept. 30, there were just four sales over $6 million in this community. But in the past four weeks alone, there have been a whopping six sales over $6 mill. The buyers, all Silicon Valley execs, all live in Woodside are deciding to move up to larger homes.

What’s happening here? While we can’t draw too many conclusions quite yet, our local manager, Wendy McPherson, says it’s a combination of things. There has been incredible pent-up demand among the moneyed class looking to buy. Prices on luxury homes have come down sharply to levels we haven’t seen in a decade or more. And there’s greater confidence among high-end buyers that we’ve seen the bottom of the market and prices will only rise from here.

Luxury buyers can hardly be blamed for thinking the market is offering more relative bargains than the Nordstrom’s half yearly sale. One Woodside estate that was listed at $22 million just six months ago dropped to $17.5 million and then sold over $15 million. Another priced at $15 million two and a half years ago was relisted recently at $9.9 million and sold in the mid nines.

Woodside isn’t alone when it comes to upper end markets bouncing back. We’ve seen the luxury sector of local markets from Lake Tahoe to San Francisco to Silicon Valley stabilize and rebound off their recessionary lows. Coldwell Banker Residential Brokerage’s latest luxury housing reports show:

Million-dollar home sales in the Tahoe-Truckee region up 31 percent in the third quarter (July-September) from the same period a year ago. Some 16 homes sold for more than $2 million, up from 10 the previous quarter and a year ago;
In San Francisco, there was a nearly 6 percent increase in sales over $2 million during the third quarter but a 42 percent increase in $3 million and above home sales. The median price of multi-million-dollar sales also jumped 10 percent;
While million-dollar sales did slip in Silicon Valley last month and were flat in Marin County, both of those results followed many months of strong year-over-year gains;
Additionally, the highest end of the Silicon Valley market continued to climb with 24 homes selling for more than $2 million in the county, up from 18 a year ago, and four selling for more than $3 million compared to just one a year ago. Los Gatos reports they have just closed a sale over $4M and are pending on a $8.9 listing.

In the past, luxury homebuyers – the so-called smart money – are often the first to declare a market bottom and jump back in because they have the cash and the means to do so once they are convinced the time is right. These buyers are astute observers of real estate trends and financial markets, and are often the first to see turnarounds in the macro economy. Their confidence in the market often leads overall consumer confidence.

It will be interesting to see if the rest of the market follows suit again this time. While the economy here in the Bay Area and across the country certainly has been sluggish and unemployment levels remain stubbornly high, it’s encouraging to see solid improvement in the upper end of the real estate market. Only time will tell if it catches on to the rest of the market. One thing is for certain. For this high end activity to trickle down to the $1M to $3M buyers who are getting some level of financing, the banks are going to have to provide more options for well-qualified buyers who have a down payment and strong credit scores. There is still practically no secondary market to sell Jumbo loans, so the options don’t yet exists for Jumbo rates to become more competitive – unlike what buyers are seeing in the conforming loan arena.

Below is a market-by-market report from our local offices:

North Bay – While many might think the market has slowed, there is still lots of business happening out there, according to our Greenbrae manager. We are seeing multiple offers, offers on properties that have sat for a while, and sellers still bringing new and exciting properties on at good prices. While the market is not as robust as we would like it to be, it is still healthy. The market in North Marin remains slow, with buyers still sitting on the fence and sellers hoping for a return to glory days. However, Novato has seen steady listing activity all across price ranges in the past two weeks – 28 new on the market from $139,000 to $2,200,000, with the majority clustered around the mid $500Ks-$700Ks. Sold properties show a similar spread, from $153, 000 to $1,055,000, again with the majority in the mid range. San Rafael is holding steady with a fairly large inventory. In the last two weeks, 30 listings have come on the market, with almost a quarter of them over a million dollars. In the same period, 24 units closed escrow, with a similar profile to Novato – ranging from $150,000 to $2.275MM – and the majority again in the mid $500K-$700Ks. The most difficult price point remains above $1MM, with buyers scarce and lending much more problematic. Finally, our Sebastopol office reports that open house activity was exceeding slow this past weekend with five inches of rain on Sunday alone. Only the most well priced homes are garnering offers. Buyers are very slow in making their purchasing decisions even though there are some screaming deals on the market.

San Francisco — Our San Francisco Lakeside office says the local market has been steady of late. There were eight offers on a new listing, two offers on a listing that has been on the market for more than a month - but other properties languish. Buyers are cautious and lack urgency but respond to the right deal for them. There were 23 ratified offers, three of which were multiples. Meanwhile, the Lombard offices says it has been a slow October. The manager says there’s more buyer caution and lack of urgency. Some knowledgeable sellers are listing at attractive prices. However, there is more action in the $1 million to $3 million range. Our Market Street office reports that the number of ratified offers picked up last week from the previous week. On the rainy Sunday, the open house activity was all over the map from a steady stream of buyers to one or two people showing up. Finally, the market has been steady, according to our Noriega office, which reports four ratified offers, one of which was a multiple offer.

SF Peninsula — Our Burlingame office says that sales activity is steady while inventory has decreased. The terrible rain and wind put a damper on some open homes while others had groups of 20 or more. There are continued re-negotiations on properties already in contract due to needed repairs and lender requirements. In the Previews market, buyers are becoming active and bringing cash. There is a lot of money coming from overseas. This would indicate that investors are sensing the bottom of the market. Across the hills in Half Moon Bay, sellers are frustrated with the few showings across all price ranges. Buyers are looking but aren’t writing offers unless the home is perfect in all aspects. In Menlo Park, open houses were excellent this weekend despite the rain. A good omen, our local manager says. The Previews market is getting stronger - more confidence by buyers. They had a $7.5 mil sale on basically raw land in Atherton. The Palo Alto market has been steady to improving. Turnover is brisk on homes priced up to $2M, including multiple offers. However, volume of sales is low. Seems as though the holiday season is affecting the market sooner rather than later. Our Redwood City office reports the local market has been very slow. Our San Mateo manager says the hottest local markets are in that city with 42% of the total sales, Burlingame with 21% and Belmont with 16%. Open houses were well attended last week even with the rain.

East Bay – The Berkley market has been steady of late with 11 ratified offers in recent weeks, six of which were multiple offers. That’s echoed by our Castro Valley manager, who reports 13 ratified offers, many of which are multiples. In Oakland, open house traffic is mixed. Some areas are really hot and of course, new listings get a lot of attention. The number of multiple offers has dropped. In Orinda, there are still a lot of sales, however, most are under $1 million. Transactions are occurring but are taking longer and with a much lower sales price. Our Danville office reports that after a slow beginning, the end of October has been much more active. One of our listings in Alamo got seven offers and sold in one week (not a short sale or REO). Our Walnut Creek manager says buyers and sellers are now challenged with lender issues. Both the appraisal and underwriting process has become slow and cumbersome. Short sale lenders are approving sales in shorter time frames. REO’s are trickling in. In Fremont, the local market, appears to be focused on the upcoming holidays. Slower activity is typical for this time of year. Area REO market is also slow due to recent restrictions, while short sales are showing a slight increase. Similarly, the Tri-Valley market is easing back, according to our Livermore office. Buyers are being very cautious when evaluating the value of a home. Active listings in Livermore are increasing, while total pending sales have declined. In Pleasanton, active listings and total pending sales have declined. And in Dublin, listings have declined while pending sales have remained stable.

Silicon Valley – The Los Gatos market appears to be steady or even improving. We just went into contract on an $8.9 million dollar home, just closed a $4.3 million dollar home and had a $2.5 million dollar buyer walk in to an open house looking for an agent. Open houses are where the action is, according to our Cupertino manager. Lots of lookers, but fewer buyers. The manager reported 16 ratified offers, including several multiple offers, and 132 open homes. The Los Altos office, meanwhile, says the market is slowing due to the holidays approaching. There have been 26 ratified offers, about 20% of them multiple offers. Some of the deals have fallen through due to financing problems for the buyers. The local market is slow above $1.6 million and very slow above $2.5 million. In the San Jose Almaden area, inventory is decreasing but sales activity is steady with 18 ratified offers, six of which are multiple offers. Our San Jose Main office, meanwhile, says the market has picked up a little. Open houses are slow, perhaps due to Giants in the playoffs and now the World Series. Some of our listings are getting reduced in list price as well. Finally, Saratoga seems to be quieting down with our local office saying it seems as though we're entertaining the holiday slowdown a bit early.

South County – The Gilroy market is mirroring most statistics slowing a 20% decline in sales over last year. Our local manager says agents are working hard and are finding every transaction a new adventure with additional hurdles to overcome in order to close. There have been eight ratified offers and five multiple offers. Both inventory and sales activity appear to be slowing down, according to our Morgan Hill office. There were 17 ratified offers and 28 open houses. Our local manager says low consumer confidence is translating into slower sales. Continued high unemployment rates are playing a role. Even if a potential buyer has a job, many are concerned about their job security. This is reported by agents who are meeting the public at open houses. Consumer confidence is the only weak link in what is a perfect buyers’ scenario—low interest rates and very attractive prices.

Monterey Peninsula – Sales activity on the Monterey Peninsula has been steady while listing inventory has decreased in recent weeks. Our local manager reports a total of 37 ratified offers, two of which were multiple offers. Additionally, there were 98 open houses. However, the high-end market has been much slower on the Peninsula.

10 Modern Homes for Sale

2010-10-22T15:55:00.000-07:00

Frank Lloyd Wright’s Fallingwater stands alone as perhaps the definitive example of a home that is a work of art. But, that’s not the only one. There are many other notable properties that can also qualify as real estate pieces of art and the best news is — they’re all for sale.

"Art and Surf" - Montauk, NY
For Sale: $12,500,000

Journey out to the end of Long Island, NY to find this modern, oceanfront gem. Enjoy glass-walled open living on the main floor and head upstairs to the private master that is set perpendicular to the main floor. Ceiling-to-floor windows on the main floor can be thrown open to let the sea air in, or to slip into the lap pool and spa. Walk down the stairs to your own private beach.

"The Glass Pavilion" - Santa Barbara, CA
For Sale: $35,000,000

In what architect Steve Hermann calls his "greatest achievement," the "Glass Pavilion" is set within an oak grove on 3.5 acres inSanta Barbara, CA. Glass wraps around the exterior of this 14,000 sq ft home and inside are big, wide-open spaces with contemporary furnishings and design. A wine room can hold several thousand bottles and the expansive art gallery presently contains a vintage car collection that can hold up to 32 cars within its walnut-lined walls.

"The Razor" - La Jolla, CA
For Sale: $25,000,000

As is typical of architect Wallace E. Cunningham, this masterpiece embraces its surroundings along the Southern California coast. It sits high above Torrey Pines State Reserve in La Jolla, CA, and takes in the surrounding views of the ocean, open sky, and rugged landscape. Five years in the making, this home is constructed from white-polished concrete and floor-to-ceiling glass.

"Trophy on the Intracoastal" - Palm Beach, FL
For Sale: $29,500,000

Award-winning architect Milton Klein created this custom-contemporary on Palm Beach'sLake Worth in 1986 and it underwent a restoration in 2007. It consists of almost 20,000 square feet and has 200 feet of lake frontage. This grand-scale construction is made possible with extensive use of poured concrete, steel and only about 5% wood.

"Neo-Modern Showcase" - Greenwich, CT
For Sale: $13,000,000

A towering, two-story glass atrium is the signature showpiece in this 1992 tri-level neo-modern home on more than 7 acres. Designed by Ulrich Franzen, who worked with I.M. Pei for several years before starting his own firm, Franzen used expansive windows and skylights to integrate with the landscape and lake. The home is made of polished, beveled concrete aggregate blocks and granite and marble. And, of course, windows. Perks: Elevator, indoor pool, media, exercise and billiard rooms, outdoor pool, lighted tennis court, two-bedroom guest cottage and garage for 6-7 cars.

"La Gorce Modern" - Miami Beach, FL
For Sale: $19,500,000

Wealth and beauty abound on Miami Beach's La Gorce Island, which is accessible only by a bridge and passage through a guard house, which makes it desirable for celebs such as Cher and Billy Joel to own homes there. This contemporary home on La Gorce offers 20,000 square feet with 12 bedrooms, 14 bathrooms, and a 5-car garage. Plus, the 270 feet of protected waterfront will come in handy for yacht parking. The pièce de résistance is a unique, sweeping white marble staircase that leads to the master bedroom.

"Modern Pueblo" - Aspen, CO
For Sale: $11,950,000

Designed in the style of renowned Mexican architects Luis Barragan and Ricardo Legorreta, this home is built into the McLain Flats hillside, which is about 10 miles outside of Aspen. The home's sleek lines combine with the sun's rays to create shadows that offer its own unique effect as a living sculpture of color and texture. The 9,000-sq ft home was built in 1994 and has 5 bedrooms and 5 bathrooms.

"Beverly Hills Modern" - Beverly Hills, CA
For Sale: $11,895,000 (or, $50,000/month rent)

At the center of this home is a garden courtyard and the living space radiates around it, wrapped in circular walls of glass and soaring steel beams. Rooms feature custom-curved stainless steel windows and doors. Views of the infinity edge pool and city are beyond. A generous 24,000 sq ft of space includes 6 bedrooms and 6.5 baths, plus 7-car garage, gated security, and elevator. Designed by architect Ed Niles.

"Shelter Island Simplicity" - Shelter Island, N Y
For Sale: $8,950,000

Noted for its extensive use of glass walls, the house takes full advantage of its stunning location, providing views of Peconic Bay, the North Fork and Long Island Sound, all the way to Connecticut. The house is sited on an elevated estate-sized property consisting of two parcels (3.33 acres and 2.66 acres). Also available is an 100-foot boat dock with hydraulic lift.

"Poetry on the Potomac" - Bethesda, MD
For Sale: $7,100,000

Contemporary doesn't always mean steel and glass, does it? As a big departure from the double-chimneyed, traditional homes in the Washington, DC area, this warm contemporary won the AIA custom home award in 2008. Designed to enjoy the surrounding treed property, it overlooks the Potomac River. Perks: Lap pool, guest house and home office.

Weekly Market Watch

2010-10-17T17:45:00.001-07:00

The rise of the “Creative Class” and what it means for

Bay Area real estate

Online at http://cbsfbaymarketwatch.wordpress.com

I recently picked up a fascinating book by Richard Florida, the best-selling author and world-renowned expert on urban studies. In his book, The Rise of the Creative Class, Professor Florida argues that a region’s economic health and vibrancy will increasingly depend on how well it attracts and retains what he calls “the creative class” – a fast-growing, highly educated and well-paid segment of the workforce.

Florida describes the creative class as “a profound new force in the economy and life of America.” Members of the creative class do a wide variety of work in a wide variety of industries, from technology to entertainment, journalism to finance, high-end manufacturing to the arts. “They do not consciously think of themselves as a class. Yet they share a common ethos that values creativity, individuality, difference, and merit,” he writes.

What attracts the creative class to an area? In an article for The Washington Monthly, Florida writes that“creative centers provide a solid mix of high-tech industry, plentiful outdoor amenities, and an older urban center whose rebirth has been fueled in part by a combination of creativity and innovative technology, as well as lifestyle amenities.

“More and more businesses understand that ethos and are making the adaptations necessary to attract and retain creative class employees –everything from relaxed dress codes, flexible schedules, and new work rules in the office to hiring recruiters who throw Frisbees. Most civic leaders, however, have failed to understand that what is true for corporations is also true for cities and regions: Places that succeed in attracting and retaining creative class people prosper; those that fail don't.”

How do you build a truly creative community – one that can survive and prosper in this emerging age? “The key can no longer be found in the usual strategies,” Florida writes. “Recruiting more companies won't do it; neither will trying to become the next Silicon Valley. While it certainly remains important to have a solid business climate, having an effective people climate is even more essential. By this I mean a general strategy aimed at attracting and retaining people – especially, but not limited to, creative people. This entails remaining open to diversity and actively working to cultivate it, and investing in the lifestyle amenities that people really want and use often, as opposed to using financial incentives to attract companies, build professional sports stadiums, or develop retail complexes.”

It struck me as I was reading The Rise of the Creative Class that where the creative class decides to migrate can go a long way to determining the long-term health of a region’s housing market every bit as much as it determines the health of the economy. So how does the San Francisco Bay Area fare? Extremely well. In fact, when Florida decided to rank large urban areas in the U.S., the Bay Area came out as No. 1. (see the chart below from The Washington Monthly). In his article, Florida says that “the San Francisco Bay Area has everything from posh inner-city neighborhoods to ultra-hip districts like SoMa (South of Market) and lifestyle enclaves like Marin County as well as the Silicon Valley.”

Those of us who live here know that we pay a price to do so. Our housing market is certainly one of the more expensive ones in the country. But we’re willing to pay a premium because this region has so much to offer, from a vibrant and growing economy to world-class restaurants, arts and entertainment, from wonderful weather and beautiful scenery to seemingly endless outdoor activities. Just as important, I believe, is the Bay Area’s overall quality of life, our rich culture of diversity and creativity. It’s why we will continue to be a premier destination for the “creative class” – the entrepreneurs and leaders of tomorrow. It’s also why our housing market should remain strong and growing for years to come.

Large Cities Creativity Rankings

Rankings of 49 metro areas reporting populations over 1 million in the 2000 Census

Top Ten Cities

City	Creativity Index	%Creative Workers	Creative Rank	High-Tech Rank	Innovation Rank	Diversity Rank
1. San Francisco	1057	34.8	5	1	2	1
2. Austin	1028	36.4	4	11	3	16
3. San Diego	1015	32.1	15	12	7	3
3. Boston	1015	38.0	3	2	6	22
5. Seattle	1008	32.7	9	3	12	8
6. Chapel Hill	996	38.2	2	14	4	28
7. Houston	980	32.5	10	16	16	10
8. Washington	964	38.4	1	5	30	12
9. New York	962	32.3	12	13	24	14
10. Dallas	960	30.2	23	6	17	9
10. Minneapolis	960	33.9	7	21	5	29

Below is a market-by-market report from our local offices:

North Bay – The local market feels sluggish, according to our Greenbrae office, with buyers slow to pull any triggers and sellers slow to make the necessary price reductions. Condo sales are down slightly from the same time next year, partly due to FHA financing and buyers having to put down at least 25%. Single family home sales are up slightly while inventory and days on the market are down – just as they are on condos. In Northern Marin, the market is still slow and soft, except in the lower price segment of Novato, where it is now a seller's market. Although our Southern Marin office reports that sales activity and inventory are both up, it adds that agents continue to be frustrated by buyers sitting on the fence and some sellers being unrealistic on price. Our Petaluma office says we’re seeing a lot of price reductions in the upper end, and still a limited amount of sales, though they are still happening. Sales are holding steady in Santa Rosa. Lower price points seem to be drifting lower while upper end sales are increasing. Our Sebastopol office says listing activity is almost nonexistent. There are buyers in the market place but every day they have a new reason to put off their buying decision. Even these historically low interest rates are not influencing their motivation.

San Francisco — Open houses have had a steady stream of interested buyers and sellers, our Lakeside office reports. The inventory is still pretty high but our agents are chipping away at it with sales. Our Lombard office says condo inventory is the highest it has been a year. Buyers are out there, but they are deal-hunting and cautious. According to our Market Street office, open house traffic was slower than usual in the past two weeks with a few exceptions. Maybe it’s not surprising that the traffic was slower considering the beautiful weather Fleet Week. A condo in district 5 had 80+ visitors in over the weekend. Ratified offers are coming in with solid well qualified buyers who have not compromised in their home search. Short sale listings are coming in at a steady rate and they are being sold quickly, so it’s a matter of getting approvals.

SF Peninsula — Activity on the coast is slow, according to our Half Moon Bay office. We have 1 years worth of inventory in all price ranges. The home must be in special condition, location and price to generate activity. In Menlo Park, the market has been fairly steady. We have had a very busy two weeks – it almost felt like the spring market. Buyers are stepping up. But even with multiple offers on our mid level prices, prices are generally not going over list. A few higher end properties are moving – price ranges in the $2 to 2.5 mil range are now moving a bit better. In Palo Alto, open houses still seem to be relatively strong up to the $3M mark. If priced well, there are multiple offers and very little inventory. Our Redwood City office reports that it has been very slow the last couple of weeks. Both sales and listings are down. Some buyers are moving very slowly, believing that the market will continue to decline. Our San Mateo office says that inventory is moving slower than normal at this time of year. The accumulation seems to be gradual, but it is slowly building toward the end of the year. In Woodside, the local market is alive and has had a clear renaissance. Four homes have sold in Woodside in the last 10 days all over $6 million – and three of them had multiple offers. This is a stunning development since we have had just four sales over $6 mil in the last 12 months. Big money is getting confident, our local manager says.

East Bay – Our Berkeley office reports that open houses are well attended at all price points, especially if they are well located and fairly new on the market. The 400k to 1.2 million dollar properties are getting lots of looks, usually 45 to 70 visitors. Meanwhile our Oakland office says the market is busy with buyers turning out for open houses. In Orinda, our local office reports that sales and inventory have declined recently, while in Pleasanton the market is reported as steady. In Castro Valley, it appears that the market is picking up. Homes are staying on the market for a shorter period of time. On the downside, our local office is experiencing a higher than normal sales cancellation rate. Homes are not appraising for the sales price and on short sales the banks are not willing to lower their asking price. Listing inventory has decreased in Fremont with the start of school and the upcoming holidays. Sales are increasing, possibly due to people wanting to close before the end of the year. In the past two weeks in Livermore, active inventory has increased 10%, while total pending sales have dropped 8%. Open houses are less active in Livermore than earlier in the year. Finally, in Walnut Creek, sales activity is slow. Buyers are looking for real value, our local manager says. Listing inventory is increasing slightly and we’re seeing more non-distressed properties coming on the market.

Silicon Valley – Sales activity is on the rise and inventory is declining, according to our Cupertino office. If a home is really well priced, it gets a lot of attention. Otherwise it sits. Open house traffic was slower, but still respectable. Our Los Altos office says sales and inventory are decreasing. The Previews market is slow above $2M and get slower as the price increases. In Los Gatos, properties that are priced at or below market value continue to sell rapidly and in some cases with multiple offers, which seem to be increasing. Our San Jose offices report sales activity steady to declining. Our San Jose Main office says open house activity, however, is increasing, especially in the $500,000 to $800,000 range. Inventory seems to be leveling off and/or decreasing, which is typical this time of year. Low interest rates are keeping some buyers in the market currently. In Saratoga, agents are having numerous problems with unsure buyers and lenders not closing transactions on time.

South County – The South County car dealers have an advertising slogan, “Drive a little, Save a Lot.” This can also be said for the South County Real Estate Market. There are a myriad of buying opportunities in Gilroy and Morgan Hill. This is especially true for our “upper-end” market—where truly remarkable estate type homes are being offered at extraordinary prices. For just over $1 million, buyers can purchase a 4,000-5,000 square foot home on acreage with many amenities—pools, stables, etc. For those looking for upper-end homes, the South County is truly a buyers’ market.

Santa Cruz – Sold properties in the county are down over 2009 levels by about 11%. Prices remain almost identical to 2009 with the median at $525K. Inventory levels remain the same as a year ago with about 650 single-family homes on the market. The days on the market is longer by 22% over the same time last year. Santa Cruz is experiencing the very best weather of the year and real estate sales typically stay steady though Oct./Nov, so we’ll have to see how it turns out this year. Agents continue to work harder than ever as getting the deals closed has proven to be more challenging in 2010 than ever before. Buyers remain conflicted and cautious. Short sales continue to have a strong impact on the market and the approval times remain long – usually more than 4 months.

Monterey Peninsula – The Monterey area is enjoying a wonderful fall, which is generally a time when many of potential buyers like to visit and look at properties here. Our local offices are holding about 50 open houses each weekend and attendance has been good, particularly in Carmel. Sales activity has continued at a good pace, with sales from the very low price ranges to multi-millions, even one sale at almost $5 million last week. Of course, there are far more sales in the lower price ranges. We are noticing some sellers concerned about capital gain taxes next year, so are anxious to sell before the end of the year, if they can, even willing to give on price and repair requests for a close in 2010.

So as we begin this final quarter of 2010, let’s stay mindful of the fact that we are truly in one of the most desirable areas in the world in which to live. It’s no surprise that the San Francisco Bay Area has been given the #1 ranking in the US as a creativity center – and it’s why the Bay Area will always be an excellent place to live and to invest in real estate.

12 Celebrity Homes For Sale

2010-10-05T22:11:00.000-07:00

Michael Jackson

Listing price: $28,995,000
Interior: 17,171 sqft
Bedrooms: 7
Bathrooms: 13

Although the listing price has dropped more than $9 million from 2008, it is also infamously the home where Michael Jackson passed away last year, which could potentially either lure or scare away buyers. Although Jackson did not own the home, he was renting it for a reported $100,000 per month while he rehearshed his "This is It" tour.

This French Chateau is located in the Holmby Hills area of Los Angeles and includes a "glamorous" theater room, wine cellar, elevator, gym, guest house, a pool and expansive gardens on the 1.26 acre property. The home also features 12 fireplaces and an indoor spa.

In order to even view the home, interested buyers must go through an extensive "pre-buying" check, to avoid any paparazzi.

Ricky Martin

Listing price: $18,900,000
Interior: 9,882 sqft
Bedrooms: 5
Bathrooms: 7

Singer Ricky Martin's home is listed for just under $19 million in Golden Beach, Florida. The two-story Mediterranean-style estate features a 108-foot stretch of private beach and 29,088 sqft of total land.

Dr. Phil McGraw

Listing price: $16,500,000
Interior: 11,036 sqft
Bedrooms: 8
Bathrooms: 7

Dr. Phil's Hollywood home is currently on the market for a cool $16.5 million. With a prime "north of Sunset" location, this Mediterranean villa is completely walled and gated and features a grand 2-story entry, theater room, gym, billiard room, a 2-bedroom guest house and an outdoor dining room. The estate sits on land measuring approximately 31,360 square feet.

Uma Thurman

Listing price: $14,200,000
Interior: N/A
Bedrooms: 7
Bathrooms: 6.5

For $14.2 million, you could be the owner of the home formerly owned by actress Uma Thurman. Located in Manhattan's Greenwich Village, this 5-story apartment features a full-floor master suite, grand parlor, a stylized garden, outdoor cooking area, roof deck and a separate guest apartment. Zillow's estimated monthly mortgage payment on this home comes to $76,623.

Mel Gibson

Listing price: $12,750,000
Interior: 5,403 sq ft
Bedrooms: 6
Bathrooms: 5.5

On nearly 2.6 acres in Malibu, California, one of Mel Gibson's several highly-priced homes is on the market. After being listed earlier this year at $14.5 million, the home is currently for sale at $12.75 million.

The home features "park-like" grounds, fruit orchards, a lighted tennis court, 3 guest houses, a detached gym, library and a garden cabana.

Carmelo Anthony

Listing price: $9,500,000
Interior: 21,083 sqft
Bedrooms: 8
Bathrooms: 15

Denver Nuggets superstar Carmello Anthony has a high valued piece of real estate on the market. The 21,083 sq ft house is located inLittleton, Colorado in the gated community of Polo Ridge Estates and features a 7 car garage, guest house, home theater, a three-stall barn with a pasture and a 54-foot pool.

Anthony has the chance to opt-out of his contract in 2011 and is expected to test out free agency. When his home was put on the market, it signaled to many in the sports world that he would likely be on the move to a NBA different team.

Nick Lachey

Listing price: $6,800,000
Interior: 4,722 sqft
Bedrooms: 4
Bathrooms: 4.5

The singer and TV personality purchased this house, which was formerly owned by fashion model Heidi Klum, for $5 million shortly after his highly publicized break up with Jessica Simpson. Since then, he's redecorated the home to be the "ultimate bachelor pad." It sits atop a ridge overlooking Los Angeles and the Pacific ocean.

Ed McMahon

Listing price: $4,600,000
Interior: 7,013 sqft
Bedrooms: 6
Bathrooms: 5.5

Another home in the market is that of the late Ed McMahon, who during the final years of his life struggled with the prospect offoreclosure on this property.

The Mediterranean-style estate is located in a prestigious area of Beverly Hills known as "The Summit" and features imported doors and "meticulously chosen" fireplaces. Sitting on approximately 1/3 of an acre, the home measures approximately 7,013 square feet.

Jerry Garcia

Listing price: $3,995,000
Interior: 7,189 sqft
Bedrooms: 5
Bathrooms: 6

For ultimate "Deadheads" in the market for a high end home - look no further than this property 35 miles north of San Francisco. Once home to the Greatful Dead's Jerry Garcia, it was the home he owned at the time of his death in 1995.

The home sits on 11 acres with views overlooking Mount Tamalpas, the Pacific Ocean and the skyline of Berkeley, California. The home features a long driveway bordered by palm trees, a theater with an 8'x10' screen, a master bedroom with a private deck and sauna and a 73,000 gallon swimming pool.

For a Grateful Dead enthusiast with nearly $4 million to spare, this home remains on the market.

Pierce Brosnan

Listing price: $3,900,000
Interior: 3,412 sqft
Bedrooms: 3
Bathrooms: 3.5

Another celebrity looking to unload property is actor Pierce Brosnan. The Malibu home, which is in close proximity to the beach, provides both ocean and mountain views.

The property also features tropical landscaping, while the home has several wide balconies and makes use of a flowing, open floorplan. According to Zillow, Brosnan purchased the home in 1996 for $600,000.

Mary Schmidt Amons

Listing price: $2,350,000
Interior: 15,000 sqft
Bedrooms: 6
Bathrooms: 5.5

Although other members of the "Real Housewives" have faced trouble with foreclosure, eviction and jail time, theWashington DC housewife, Mary Schmidt Amons, is listing her Virginia home without the backdrop of financial or legal hardship.

The home is located in the highly desirable Langley Farms neighborhood of McLean, Virginia, and includes a gourmet kitchen, a master suite with a private deck, sun room, library and 4-car garage. This 15,000 sqft home currently is on the market for $2.35 million.

John Wayne

Listing price: $2,263,000
Interior: 4,448 sqft
Bedrooms: 4
Bathrooms: 4.5

That's right, if you want to live like The Duke, you can do so in his former home, located inNewport Beach, California. The property has been listed for about 1 month and has had two previous owners since John Wayne. It last changed hands in 1998 for $895,000.

The house borders the Big Canyon Golf Course, right by the tee for the fourth hole. The home features a two-story living room with floor-to-ceiling windows, parquet floors, marble fireplaces, balconies and a formal dining room with a custom console designed by Wayne himself.

This "Versailles style" home is currently on the market for $2,263,000.

Weekly Market Watch

2010-10-05T22:07:00.000-07:00

Weighing Your ‘Personal Economy’ vs. Nation’s Economy

When Deciding to Buy or Sell a Home

I was at an agent luncheon in Silicon Valley recently and asked my top sales associates what they were hearing out in the trenches. We heard the usual stories of buyers holding off due to fears of the slow economy, or they were waiting for that perfect “screaming buy” to come along before purchasing. And we heard about sellers not listing their homes because they wouldn’t get as much in today’s market as their neighbors did a few years ago. Then Lisa Blaylock, an agent in San Jose, shared with us an intriguing philosophy that got her potential buyers and sellers to look at the market in an entirely different way – and ultimately take advantage of some great opportunities out there.

After Lisa’s clients wrung their hands about the nation’s high unemployment rate, the fragile economic recovery, and other economic stories they had seen on CNBC or read in this morning’s paper, she replied with a simple question: “Ok, but how is your personal economy doing?” After a puzzling look from her clients, she would explain that while the nation’s economy is important, it’s not nearly as relevant to them as their own personal circumstances when it comes to buying or selling a home.

In many cases, Lisa’s buyers had secure jobs with good incomes and strong savings and investments. With home prices easing and mortgage rate at record lows, they were personally in a good position to afford the home of their dreams – perhaps in a better position than they will be in the future when interest rates rise and home prices rebound. Conversely, many of her sellers had a great deal of equity in the home that they had owned for years and would walk away with a good profit. She reminded them why they wanted to sell in the first place – to move up to a larger home, or maybe downsize in retirement, or perhaps relocate to be closer to their grandkids. Her “personal economy” approach must have had an impact on her clients because she’s already sold 17 homes in these first three quarters of 2010.

Lisa’s story reminds us that it’s important for consumers to weigh their own “personal economy” against national and statewide economic headlines in the media when deciding whether to purchase or sell a home. It’s easy to get caught up in the daily drumbeat of economic news. You can’t turn on the TV or the radio, or read a paper without the latest economic minutia. While the majority of “experts” seem to agree that the U.S. economy is recovering, albeit more slowly than we would like, some days it still feels like we’re taking two steps forward and one back. But we can’t lose sight that what really matters in our investment decision isn’t the latest jobless figures or manufacturing orders or even the Case-Shiller index, it’s our own personal circumstances. For many, today can offer an incredible opportunity to make a real estate investment in and around the San Francisco Bay Area.

I’m reminded of the old saying that you make your profit on real estate when you buy, not when you sell. For every seller who has realized a nice profit at the closing table, it must be remembered that profit couldn’t exist had they not stepped up and made the Buy decision when they did. While no one questions that there are economic challenges out there in the market, there are also tremendous opportunities. By the time all of those macro economic concerns have been lifted – when the “all clear” bell rings again – the same opportunities will not be around in terms of prices and mortgage rates. Your “personal economy” may just be the best indicator you have when considering whether to make a real estate move now rather than later.

Now a market-by-market report from our local offices:

North Bay – Marin seemed to do well in September after a really slow August. Agents have been quietly putting deals together, working with their buyers and doing what they can to get deals done and work through ongoing negotiations, our Greenbrae office reports. Persistence is paying off with short sales, and banks seem to be getting their act together and coming to decisions faster than in the past. Similarly, the Northern Marin office says both inventory and sales are picking up. At this week’s Novato Broker’s Tour meeting there were 17 open homes, 3 of which were short sales and 1 REO. However, an REO agent commented that there are many more REO’s coming on the market in the near future. In Sebastopol, the market has been steady with most sales in the lower price range. Our Southern Marin manager says fewer properties have come on the market than is traditional for this time of year. Buyers seem to be slow stepping up to the plate except for REOS, which seem to fly out the door as soon as they come on, as they are normally aggressively priced.

San Francisco — We're not out of the woods, but agents are feeling better. That’s how our San Francisco Lakeside manager assesses the local mood. Doom and gloom voices have dissipated just a little. Buyers are coming forward for good deals. Our Lombard office reports that there was an increase in inventory after Labor Day, but not huge. Buyers lack urgency and are looking for a bargain, but they’re there when the right property and right price come on. One sale had 11 offers about 10% over asking. On stale listings, baby-step reductions aren’t working. Our Market Street office says that open house activity was all over the map: Great traffic at some, no traffic at others. There is an uptick in ratified deals with quick closes. Finally, our Noriega office says the market has been fairly steady. Open houses are still well attended but buyers are not willing to make an offer unless they perceive that the property is a good deal and is a bargain.

SF Peninsula — According to our Half Moon Bay office, sales activity is sluggish on the coast although listing inventory has picked up. The high end is very slow (over the $1.5m range) although we have had a few, all cash, upper end sales to be used as vacation homes. The Menlo Park market has been fairly steady, with sales good the past couple of weeks. However, prices are still eroding in the upper end of the market. In Palo Alto, our local office reports that the market is generally slow in sales and inventory is quiet. Those that are well priced receive multiple offers. Open houses have been lukewarm – some well attended with 30/40 groups coming through the property. Meanwhile, our Redwood City office says open houses are well attended but buyers are very reluctant to make an offer. Nonetheless, homes are still selling and there are multiple offers were on properties that are in a great location, show well and are priced right. Finally, the San Mateo and Woodside offices report sales activity is decreasing. Buyers seem to be doing more "wait and see" and it’s been more difficult to gain a commitment to write an offer. Open houses still seem well attended.

East Bay – Buyers are out there and making offers, our Berkeley manager says, and there has been a bit more activity than the past few weeks. There were 100 people at a new Berkeley listing this past Sunday priced at $689,000. Meanwhile in Castro Valley, the market has been fairly steady. Our Danville office reports both sales and listings decreasing. But while sales activity is slower compared to what it was a few months ago, sales are in almost all price ranges. In Fremont, there has been a flurry of activity on the buy side now that people are back from vacation and want to purchase before the end of the year. In the Tri-Valley area in the past 30 days, the active inventory in Livermore and Pleasanton has remained stable, while active inventory in Dublin has increased by 15%. Pending sales were down in Livermore and Pleasanton, but stable in Dublin. Our Oakland office reports the average sales price has dropped as sales seem to be coming in from the lower price ranges and not the Previews market. However, there are lots of new listing coming on the market. The number of open houses has increased significantly. Our Orinda manager says local buyers are ready to move although they are taking their time and being very thorough. The Pleasanton office reports reduced buyer activity.

Silicon Valley – In Cupertino, open houses are busy but it’s getting harder to have people pull the trigger. Once in escrow, it is challenging to make the deals stick. But in general, sales activity is increasing. Homes are continuing to sell at a brisk pace in Los Gatos as long as they are priced appropriately, according to our local office. Proper pricing is critical! The San Jose Almaden office reports that inventory is decreasing while sales are on the rise. In Willow Glen also reports that sales activity has picked up a little, although traffic has slowed somewhat at open houses.

South County – Our Morgan Hill office reports that sales activity is steady while inventory is declining. The sales board in the Morgan Hill Office was almost filled up for the month of September. The local market seems to have gotten a “second wind.” There has been lots of activity in the office and agents seem busy and motivated. Perhaps buyers are convinced that interest rates will not go much lower and that prices remain attractive and affordable.

Santa Cruz and Monterey Peninsula – There’s been little change in the overall Santa Cruz market in recent weeks. The median sale price in August is relatively flat from the 09 level of $500,000 to $517,000 in 2010. There are fewer properties under contract from the same time last year, down about 16%. The inventory levels are the same, as are days on the market with the average being about 74 days. The REO market, short sales, and those properties under $ 500,000 comprise nearly 50% of the market. The agents continue to do price reductions on their listings and then receive an offer much less than the newly reduced price. For Santa Cruz, our best weather days are ahead in the next 2 – 3 months and open houses have been well attended especially for those listings closest to the beach. Meanwhile, the Monterey Peninsula market has seen listings holding steady and sales activity increasing, according to our local offices.

Finally, a quick note on the Previews Market: We are seeing an increase in sales in the $1 million to $1.4 million price range, according to our Greenbrae office. Sales considerably above $2 million are fewer, though we are seeing pockets of activity on some great luxury properties that have been deeply discounted and show well. Our Santa Cruz offices say they’ve noticed a definite uptick in the Previews market in the past couple of weeks. Showings have increased and in the last week a new CB $2 million listing went quickly into escrow. In San Francisco, 22 homes sold over $2M in August, a 38% year over year improvement. And in San Mateo County, 36 $2M+ homes sold which was a 100% improvement over prior year. Keep your eye on these numbers. In past recoveries, strong activity in the High End has signaled the full market turn-around.

Weekly Market Watch

2010-07-26T17:43:00.001-07:00

Housing Market and Economy Sending Mixed Signals

Trying to read the tea leaves in this economic recovery is not easy. We’ve come a long way from the depths of the recession early last year, but after a sharp bounce-back over the past year, the housing sector and other segments of the economy seem to now be lurching forward in fits and starts. One day we’re encouraged by economic and housing reports, and the next day scratching our heads over disappointing numbers.

A few examples this past week alone:

· Existing-home sales nationwide fell 5.1 percent in June, but remained nearly 10 percent higher than they were last June, according to the National Association of Realtors. Lawrence Yun, NAR chief economist, said the market shows “uncharacteristic yet understandable swings” as buyers responded to the end of the federal tax credit.

· Closer to home, sales of new and resold homes and condos in the Bay Area inched up 1.3 percent in June from May but fell short of a year ago – down 3.1 percent, according to MDA DataQuick, the La Jolla-based real estate research firm. The median sale price was still 16.5 percent higher than last year, thanks largely to fewer foreclosures re-selling and more high-end activity.

· The mid- and upper-end of the local housing market finally appears to be gaining some momentum. Million-dollar home sales in Silicon Valley, San Francisco and even Lake Tahoe last month surged to their highest level in about two years, according to Coldwell Banker Residential Brokerage’s monthly luxury housing report.

So what to make of all this? First of all, such roller coaster recoveries are not unexpected. Historically, we’ve seen sharp rebounds initially after a recession ends and then slower growth a year or two into the recovery. We’d love to have a strong v-shaped recovery, but that often doesn’t happen.

Additionally, the softening of the housing market nationwide and in the Bay Area was not surprising with the expiration of the federal tax credit. Economists believed that many buyers and sellers pushed their transactions through quickly to meet the deadline, perhaps taking away sales that would have otherwise occurred during subsequent months.

John Walsh, MDA DataQuick’s president, said, “The next few months should be very interesting: We’re about to see how well the housing market can fly on its own. The tax credits no doubt stole some demand from the rest of this year, and soon we’ll have a better sense of just how much.”

Here in the Bay Area, we’ve seen slow but steady improvement from last year’s recessionary depths. While it will undoubtedly take the housing market some time to return to normalcy, it appears we’re continuing to move in the right direction. The question now is whether that growth will continue, and how fast.

The headwinds created by high unemployment and muted economic growth will remain challenging for the housing market. But the market is also being pushed along by strong tailwinds – attractive housing prices, historically low mortgage rates, recovering financial markets and improving stock portfolios of buyers. Only time will tell how it all plays out.

Below is a market-by-market report from our local offices:

North Bay — In Petaluma, there is little or no inventory coming on the market in the under $400,000 range. But agents are starting to see consistent activity above the $500,000 - $650,000 range. Meanwhile in Santa Rosa, prices at the high end continue to erode, however properties perceived as a value do go under contract. Mid level price points are quiet while the lower price points are very active. We are seeing an increase in owner occupied listings. Our Sebastopol office reports noticeably slower activity at open houses. Most agents reported single digit attendance. With summer in session, the Northern Marin office says it’s encouraged by the increase of busy open houses, many with real buying interest. Several listings had additional showings after the weekend open houses. Sales are happening with back and forth negotiating. Even though the Southern Marin market has slowed down, sales seem to be somewhat steady. Normally, late July and August are slow times in Marin. That said, we are still seeing good attendance at Sunday open houses and potential buyers are still lurking in the wings.

San Francisco — The market has been steady in San Francisco, according to our Market Street office. It's still much quieter in the market than agents would like. However, there has been a small uptick in the number of offers ratified in the last few days. The buyers seem to all be waiting for that elusive great deal. Open house activity has been steady. Our local office reports six multiple offers.

SF Peninsula — There has been a slow down in some areas, according to our Burlingame office. And yet multiple offers are happening every day. Buyers are waiting for that perfectly prepared property in just the right location. There were 12 offers on a new Burlingame listing this week. Last minute lender issues are becoming more common. They are looking for additional inspections, mandating repairs and reviewing disclosures and reports very carefully. In Half Moon Bay, activity remains brisk under $1 million range. But properties must be considered in the best location and best condition. In Menlo Park, agents report that it seems like the market has slowed down. But open houses were excellent this week. The Palo Alto market also is feeling the vacation slowdown. Our local office reports that activity in Santa Clara County has been affected more than San Mateo County as far as volume, number of sales and inventory. Active listings and pending sales in San Mateo seem to be about equal to the same time in 2009, according to our San Mateo office. Closed sales are down about 10%. Open houses are strong in most areas but the condo market is soft. Finally, in Woodside and Portola Valley, the "low" end of the market $2.5 million and under – is coasting along well. But the higher end is slower with inventory building.

East Bay – In Berkeley, there are still many offers being written, but competition discourages some offers. It is still very much a seller's market in most of the core areas. Open house activity in Oakland/Piedmont is mixed: lots of attendee's at some and very few at others. The number of multiple offers has declined, both on numbers of offers written and how many houses are getting multiple offers. July has started off with more activity than the beginning of June even with the holiday on the 4th. The Castro Valley market has slowed a bit. The story remains the same: well priced properties are flying off the shelves, although buyers are getting picky these days. There has been an increase in inventory. Short sales are still dominating the market. In Livermore, things are steady. Active listings and total pending sales showed an up-tick. The Pleasanton market was stable, and in Dublin, the active listings ticked down and total pending sales were up. The Previews market in Livermore has remained stable the past two weeks with 25 active listings and 30 total pending sales. Noteworthy is that one new pending sale is a $5,750,000 listing. If this property closes, it will be the highest closed sale in Livermore in several years.

Silicon Valley – There is lots of new inventory coming on line in Cupertino. The low end of the market is still very competitive, but everything else needs to be priced just right to get any attention. Open houses continue to be busy, with 140 open homes over the past couple of weeks. Los Altos and the surrounding communities seem to be on vacation, according to our local office. Traffic on our roads and businesses is reduced and open house attendance is down. It is slowing a bit in the $1-$2M range and remains slow above $2M. Meanwhile, the market has been steady in Los Gatos. Properties are continuing to sell when priced correctly. The key is pricing. The upper end of the market is steadily improving. A home that sold off the market in Monte Sereno – a 3,000 square foot fixer upper – listed for $2 million sold for $2.15 million. In the San Jose Almaden area, there has been a noticeable downturn in the market as far as listings go. The higher end (over $1 million) in Almaden is a lot slower. Sellers Buyers appear to be patient or unsure if prices will go down again. Meanwhile, sales are picking up in the Willow Glen area. Some of the sales are selling over listing price due to multiple offers. In Saratoga, the market seems to be unpredictable. One day there’s exceptional activity only to have a few days where agents are wondering where business is.

South County – The local market continues to be mixed, according to our Gilroy office. Open house traffic has increased and buyers seem to be taking interest again with lower interest rates. However, buyers are very cautious and there doesn't appear to be a sense of urgency unless the home is a great buy. Developers for two new Morgan Hill sub-divisions are reporting lots of interest and brisk sales. One sub-division (of which Coldwell Banker is the exclusive listing broker) reported three sales just last week. Builder incentives coupled with phenomenally low interest rates make a new home purchase in South County very attractive. Sales activity for existing homes, however, has slowed during these past several weeks.

Santa Cruz – Prices are slowing inching upward in the Santa Cruz area with the median price continuing to rise over the past year from $483,000 to $507,000. The inventory levels remain about the same as 2009 with about a 7.5 month supply, slightly down from last year. The number of closed transactions for June 2010 was down about 21% for the same month last year. Properties are on the market about 70 days, which is relative short period. However, it is only the very well priced listings that are selling. In the county there were 149 closed transactions in June and a large percentage of those were distressed sales either bank owned or selling short, close to half. There are some incredible values here if the buyer is patient and willing to find the right house.

Monterey Peninsula – With the US Open and the 4^th of July over, the Monterey Peninsula is not as bustling with people as it's been and the market seems to have quieted somewhat. However, the total units sold for the first half of this year compared with last are excellent with at least a 20% increase in most areas and a sizeable increase in sales of the high-priced properties over $3.5 million. Though sales have increased, the prices have not in most areas, like Carmel, which saw a 20% increase in sales but prices have dropped from $1.66 million to $1.4 million average price. Still, Pebble Beach jumped a whopping 60% in sales and the average price rose from $1.79 million to $2.42 million. And Carmel Valley had almost a 50% increase in sales with the average price also rising, from $805,000 to $977,000.

Taking a look over all Bay Area counties, we have a continuing decline in Months Supply of Inventory. For single family homes, San Francisco, San Mateo, and Santa Clara counties are in approximately the same inventory shape with 3.5, 3.4, and 2.9 months supply respectively. Marin has a little more inventory with 5.4 months, and Sonoma is showing 4.5 months supply. Contra Costa and Alameda counties have the current lowest inventories in the Bay Area at 2.8 months- a strong sellers market at the entry level- but it would be a different story if we were only looking at homes over $1.5M. San Benito county is low at 3.3 months supply. Santa Cruz and Monterey counties are coming in at 5.8 and 4.2 months.

These numbers in general speak to a fairly healthy balance, and certainly slanting to a Seller’s market in the lower price points. As always, the devil is in the details. For the most part our entry levels price points will be less than 2 months, while the luxury markets over $2M will generally be greater than 5 months supply.

Weekly Market Watch

2010-06-27T06:20:00.000-07:00

Mortgage rates fall to record lows while consumer confidence moves higher

With the expiration of the federal tax credit, the housing market is facing a key inflexion point as we head into the summer vacation season. The government stimulus has certainly helped spur a rebound in the real estate market, but the recovery is fragile and observers are watching closely to see if the market can grow without the support of government aid.

Several key economic announcements out this week could bolster the nascent recovery. On Thursday, mortgage finance giant Freddie Mac announced that U.S. mortgage rates have fallen to a record low. Rates for 30-year fixed loans declined this week to 4.69 percent from 4.75 percent. The previous record was 4.71 percent, set in the week that ended Dec. 3. The average 15-year rate was 4.13 percent.

While the overall level of real estate activity has eased in recent weeks with the expiration of the tax credit deadline, many economists believe that low mortgage rates will spur growth in the market by reducing borrowing costs for home buyers. Mortgage interest rates have tumbled in the past two months as concern that a debt crisis in Europe may spread boosted demand for the safety of bonds, including mortgage-backed securities.

Meanwhile, Reuters reported on Friday that consumer sentiment rose in June to its highest level since January 2008 while reports of job losses were down sharply from a year ago.

The Thomson Reuters/University of Michigan's survey of consumers, a key gauge of consumer sentiment, rose to 76 from 73.6 in May. The figure was above the median forecast of 75.5 among economists polled by Reuters. At the same time, reports of job losses fell by half since last June, from 65 percent of respondents to 29 percent, the survey showed.

"The June 2010 survey recorded the most favorable news heard by consumers about jobs in five years," Richard Curtin, director of the surveys, said in a statement. But he cautioned that consumers “do not anticipate significant declines in unemployment during the year ahead."

Consumer sentiment is seen as a proxy for consumer spending, which fuels around 70 percent of the U.S. economy. Positive consumer sentiment is particularly critical to the housing market. If buyers are more optimistic about their future, they’re more likely to take out a mortgage and buy a home.

So where does this all leave us as we look at the Bay Area housing picture? As reports from our local offices indicate, the market continues to be steady in most communities. But the recovery from last year’s recessionary lows will likely be a gradual one with its share of fits and starts along the way. Unemployment levels will play a key role in the recovery, as will the health of the stock market and the overall national economy.

While there are certainly economic challenges right now, for buyers with a long-term view the current market provides an attractive opportunity to invest in real estate while mortgage rates are at historic lows and homes are priced very competitively. To put this in perspective, took a look at conditions in the mid-June 2001 market. In many of our Bay Area communities today, we are seeing mid-level homes near 2001 prices. The average June 2001 mortgage interest rate for a 30 yr fixed conforming loan was 7.2% - and today’s record low is 4.7%. That’s over a $1,000 monthly savings on a $650,000 loan – from $4,412 to $3,371. Savvy buyers are taking advantage of this great combination of home prices and interest rates.

Below is a market-by-market report from our local offices:

North Bay — There has been a huge increase in sales over the past two weeks, our Southern Marin office reports. Long, tough escrows are closing. Offers are coming in on properties that have been on the market for months. Price reductions seem to bring in offers, but often below new reduced prices. The Northern Marin office also reports both sales and inventory steady to increasing. In Petaluma, a lack of inventory in the under $500k price range continues to result in multiple offers. The $500k - $800k range is still slow. REO's are trickling onto the market at a moderate pace. Meanwhile, the Santa Rosa market has come back to life a bit. Multiple offers are common now up to $500K. Our local office reports that there are plenty of buyers, but not enough inventory. Similarly, in Sebastopol sales are on the rise with more activity between $500,000 and $1 million than they have seen in a long time. A $1 million dollar property had two offers and sold within days of listing. Sebastopol open houses have been well attended these past two weeks.

San Francisco — With the tax credit expiring, our Market Street office says there doesn’t seem to be any sense of urgency on the buyer's part to submit offers. It feels as if everyone is hovering waiting for something and none of the agents are sure what that something is. Once again multiple offers outweighed the properties with single offers. Open house traffic was slow last week and it's not expected to pick up until after the fourth of July weekend. Similarly, the Lombard office reports that new sales and open house traffic are down with the beginning of summer.

SF Peninsula — In Burlingame, buyers seem to have slowed down a bit in their purchase decisions with the expiration of the tax credit. Looking at the Previews market, there are currently 96 active listings in Hillsborough – a larger supply than we have seen in a long time. There is some very well priced inventory on the market now. At the coast, our Half Moon Bay office reports stronger sales activity in the $600k to $800k range only when the property is in top condition and priced slightly under market. The $1 million-plus market is sluggish with many properties sitting on the market for months. In Palo Alto, sales and inventory activity remain steady to increasing, while a lack of inventory continues to plague the Redwood City/San Carlos market. While there’s good attendance at open houses, the market seems to be quiet. Buyers are still being very cautious. In San Mateo, inventory has also been low until this week when 10 new listings came on the market. It still seems that the lull experienced after the Federal Tax Credit is still upon us for many areas of the county. Finally, the Woodside/Portola Valley market is moving fairly well in the under $2.5 million segment of the market. Portola Valley has been pretty strong in sales in general. But it’s very soft over $5 million.

East Bay – The Orinda market has been robust lately with many interested buyers in all price ranges. More properties are coming on the market in Berkeley, and there are more price reductions on the ones that have been sitting. In Oakland, the beginning of June was slow but they are seeing the market pick up steam recently. A few open houses have had no groups while others have been very busy. Short sales are 50% of the pending sales. The Castro Valley market seems to be changing from week to week. There are more listings, although they are not moving as quickly because of the expiration of the tax credit deadline. Despite the changing climate and hesitant buyers, they are still seeing multiple offers, although less than before. Lower and midrange price points are moving. The number of new pending sales in Danville has slowed, possibly due to graduations and summer vacations. Similarly, the Livermore market has slowed along with the summer vacation season. Inventory has risen about 10% and total pending sales are down about 5%. Homes that are priced right, show well, and are located in a good location still bring multiple offers. Meanwhile, sales are increasing in Fremont. Our local office says there is still a lot of buyer activity. Open house showings are still busy, but actual purchase time/decision making has been lengthened.

Silicon Valley – According to our Cupertino office, listings are on the rise and sales are steady. They report that buyers seem to have summer fever, but open house activity is still good. About one in five sales are still resulting in multiple offers. The Los Altos market is slowing due to several factors related to the economy, but also vacation time is here. Still, about half of the sales are resulting in multiple offers. In Saratoga, agents are still dealing with many short sales. The Previews market is still sluggish. But agents are hopeful that the market is simply feeling the effects of the June vacations, graduations, and weddings. Meanwhile, the Los Gatos office reports that there seems to be greater optimism among buyers. They are receiving multiple offers in the lower end of the market, and when homes are priced competitively and show well. The San Jose market appears to have slowed down in recent weeks. As the Willow Glen office reports, activity and sales are up and down. They are getting a few rejected offers and several sales have fallen through. But with graduations over, agents are hopeful that the market will begin to pick up again. Sales of lower priced homes slowed a bit in recent weeks, according to the San Jose Main office, but the mid to upper price market is improving.

South County – The Gilroy market has improved with increased sales and buyer activity. Although May was extremely slow compared to past years, things have picked up in June. Meanwhile, listing inventory in Morgan Hill is increasing ever so slightly. Moderately priced homes, once listed, are selling quickly. The upper-end market, however, is not selling at the same pace. Homes listed above $800,000 are sitting on the market. Agents are reporting that traffic at their open houses has been steady but there are lots of "lookers" and fewer buyers who are actually ready to make a commitment. As we have heard many times, high statewide unemployment remains the biggest factor slowing down our housing recovery. Morgan Hill's proximity, however, to Silicon Valley (where employment is on the rise) is a positive factor for our local market.

Santa Cruz – Our local office reports that the market remains steady with mostly lower priced properties making up the lion's share of sales and the upper end fairly quiet. Sales are on par with last year with prices up slightly. They are seeing a lot of short sales and it has become notable when a property is not a short sale or an REO.

Monterey Peninsula – Both sales and listings are on the rise on the Monterey Peninsula. The U.S. Open and all the hoopla accompanying it was there last week, bringing many people to the Monterey Peninsula. It is very good publicity for this market, as often people who are here fall in love with the area and want to own a home here. In fact, our local offices even had a couple of calls from people watching TV, which was broadcasting beautiful scenes, inquiring on prices in Pebble Beach. While most visitors are focused on golf and don't really look at properties while they are in town, many do come back later. In general, the past two weeks were very active with 42 new listings and 34 new escrows, much higher figures than usual.

To sum it up, graduation and the first few weeks of summer created a bit of a lull in many markets, giving some additional opportunity to buyers who were writing contracts during early June. However, by the third week of the month, we are already seeing new sales activity picking up in most offices. Record low interest rates will do that.

Weekly Market Watch

2010-06-14T17:03:00.000-07:00

High-End Home Sales Continue Climbing Along with Consumer Confidence

As we’ve discussed in past columns, the health of the housing market is very closely tied to consumer confidence. Buyers who are concerned about the future tend to sit on the sidelines while those who believe the economy is improving are more willing to jump into the market and buy a home. So with that, I was encouraged by Friday’s University of Michigan consumer confidence report, which showed this critical barometer rose to its highest level in more than two years (see chart below).

According to the Bloomberg news service, the report shows the slump in stock prices sparked by Europe’s debt crisis is having limited effect on sentiment. “Confidence is heading in the right direction but we still have a long way to go to reach normal levels,” said Zach Pandl, an economist at Nomura Securities International Inc. in New York. “It’s a pretty encouraging development that consumer confidence hasn’t shown much damage from all the negative news out there.”

Improving consumer sentiment, along with the deadline for the federal homebuyer tax credit, undoubtedly played a key role in a spike in recent home sales, including in the Previews luxury segment of the housing market. Although the push for meeting the deadline of the federal tax credit created an enormous swell of activity in the first-time buyer price points, the sense of urgency seemed to have spread to higher priced markets. Sales activity in the move-up market was definitely stronger.

According to our own Coldwell Banker Residential Brokerage luxury report, million-dollar home sales in Silicon Valley jumped nearly 70 percent in May from a year ago as the region’s high-end market continued to recover from last year’s recessionary lows. A total of 251 homes sold for more than $1 million in Santa Clara County, up from 148 sales in May 2009. Home sales were also up nearly 10 percent from April as well.

Similarly, million-dollar home sales in Marin County – as well as the median sale price – rose sharply last month. Sales were up nearly 48 percent from May 2009’s total while the median sale price of luxury homes reached $1.74 million, up 23 percent from $1.41 million a year ago. When compared with the previous month, May’s median sale price was up 8.9 percent while the number of sales dipped from 65 to 62.

Sellers of luxury properties are also getting a higher percentage of their asking price –95.4 percent in May in Marin County compared to 90 percent during the same period a year ago, and 99 percent in Silicon Valley, as per data received from local MLS statistics. In San Francisco, homes selling for more than $2 million were up 25% in May over prior year. And you’ll notice in the Monterey County report below that Carmel and Pebble Beach are seeing much stronger sales activity in the high end.

While I’m encouraged by the improving market figures, we need to be aware that the market will continue to face strong headwinds on the road to recovery. Among the challenges are stubbornly high unemployment, recent volatility in the stock market and the debt crisis in parts of Europe. The next few months will give us a good indication of how strong the housing market recovery will be without the benefit of government stimulus.

Below is a market-by-market report from our local offices:

North Bay — The Southern Marin office reports that they’ve seen a flurry of activity in listings, sales and closed escrows. The Previews market is picking up as well. Two Previews sales closed this week and three are in contract. After a brief slowdown around Memorial Day, activity in the Greenbrae area has picked up again and is clipping along at a nice pace. We are seeing multiple offers again in the $1M price point and below and, in some cases, in the $1M - $1.5M price range. Greenbrae, Corte Madera, San Anselmo, Larkspur and Fairfax continue to be hot markets. Our Northern Marin office reports that it’s seeing an upswing in activity in the $600 - $800k price range in Novato with a high percentage of homes in contract at this point. Under 600K continues to thrive with over 52% of homes on the market under contract. In Petaluma, sales are steady. It was a soft weekend for real estate because of graduations. But buyers are out in force again. It’s very competitive in the under 400k range, but soft in the 750k - 1.5 million range. Our Santa Rosa office reports that the past two weeks have seen activity across the board dropping by about 50% – sales, open house activity and showings. We have also seen an increase in cancelled escrows. The low end and previously more expensive properties in Sebastopol that are now 50% off their peak are attracting huge crowds at open houses. Over 30 groups at an REO listed at $649k, previously $1.2m another 30 groups at an REO listed at $230k. The market remains exceedingly price sensitive.

San Francisco — Sales are growing slightly in the Lombard market, although May proved to be slower than April. Open houses are still well-attended. According to our Market Street office, attendance was all over the map last weekend at open houses from zero to over 100 groups. The open house with over 100 groups was a condo in the Potrero Hill district and ratified after the first weekend. Some of the listings that are not ratifying quickly are going into contract after a price reduction. In a few instances clients that have been in backup for a while have been elevated due to problems with the original buyers obtaining a mortgage. In the Noriega area, meanwhile, both sales and inventory are decreasing. The month of May was extremely slow even though open houses were well attended. Buyers are once again taking their time since the federal tax credit is over. Agents are saying that buyers are waiting to see if the prices will drop since the tax credit is no longer driving the market.

SF Peninsula — The usual slowdown around Memorial Day and the endless graduation events always seem to slow down the market this time of year, the Burlingame office reported. There are a lot more listings coming on the market with a great variety in price ranges. Most are beautifully presented and well priced for quick sale. Inventory has also picked up in Half Moon Bay, especially the higher end properties over the $1m price range, although that is still the quietest segment on the coast side market. Menlo Park has had a very good two weeks - good listings and good sales. However, the inventory is beginning to build even in the "meat and potatoes” price range in Menlo Park of $1.4 to 1.9 million. Our Palo Alto office reports that the local market is very strong with half of the homes selling with multiple offers. May was a very active month for closings in Redwood City, but the last week things have slowed down tremendously. Open houses are well attended but buyers appear to be more cautious. In San Mateo, the better priced properties are getting the most attention resulting in multiple offers. Those that are not in good to excellent condition are gathering dust. Finally, the market is picking up in Woodside. The under-$2 million market in Woodside has, indeed, arisen. However the market over $5 million is moribund. There are 19 listings in Portola Valley and Woodside over $5 million and no closed sales over that level.

East Bay – Berkeley reports that agents are busy writing offers, with many multiple offer situations – usually 2-5 offers for each property. Buyers are frustrated and it is still a sellers' market in the core area. The number of Previews listings was up 11.1% from May of last year and the selling price per sq ft. was up 5.4%, but the average sales price was down to May 2009 and 2008. Meanwhile, our Orinda office reports that they are seeing more inventory of $1 million properties. Higher priced homes are moving at an increased pace, with the Previews market “robust.” The Danville market is remarkably active despite graduation time, during which it usually falls off. Things are steady in Walnut Creek, with good open house activity. Inventory is still very low. In Fremont, inventory is steadily increasing, but sales are not matching the listing increase. Buyers have more inventory to view and appear to be more selective prior to submitting an offer. The Livermore market has remained stable the past two weeks with very little change. But there has been lots of activity the past two weeks in the previews market in Livermore. Active listings have dropped from a high of 30 to 21 with seven new pending sales. This market segment in Livermore has truly been on fire in 2010 as it was practically DOA in 2008 and 2009.

Silicon Valley – The week after Memorial Day was quiet in Cupertino. The market is feeling more active again, but definitely not the frenetic pace of April and May. Most open houses are not as busy as they had been. The market is still very good in Los Altos for new single family home listings that are priced and presented correctly. Warm weather is bringing out more buyers in Los Gatos, with both sales and listings on the rise. Meanwhile, the San Jose-Almaden market is seeing inventory inch up but sales are not keeping pace. REO inventory has become very limited. A home in Saratoga ($1.65 price range) sold for $130k over asking with nine offers. In Willow Glen, open houses are somewhat busy but sales have slowed down a little due to school letting out and graduations as well. Market activity is picking up for median priced homes (700k - 1,200,000), according to the San Jose-Main office. Lower priced homes continue to see multiple offers and generally are selling in 20 days or less. Open houses have been fairly active in all price ranges and buyer interest increasing, mostly due to the low interest rates being offered. Saratoga reports that the market seems to have settled down after the frenzy of buyers trying to meet the tax credit deadlines. It seems to be moving back to a normal market.

South County – Both inventory and sales are slowing down, according to our Morgan Hill office. This week the San Jose Mercury News ran an article in its business section entitled “Five Things to Know About The Housing Market in the South Bay Right Now". The five elements of the article accurately reflected the state of the local market. 1. Stiff Competition for Some Homes: If a home shows well and is priced right, sellers can expect multiple offers. 2. Obtaining a Loan is More Complicated Than Ever: Underwriting and lender guidelines have changed dramatically in the past three years. 3. Buyers Should be Prepared to Try and Try Again: See Number one Above. 4. Appraisals Can Throw A Monkey Wrench Into A Sale: Getting a home to appraise for sales price is often times the biggest hurdle in closing a transaction. 5. Completing a Short Sale Can Be A Hassle: Though Short Sales seem to be closing faster, the wait for buyers can last as long as several months.

Monterey Peninsula – Activity in the high end is much better this year in Carmel and along the Monterey Peninsula. We’ve seen a number of homes close at much higher prices than last year, including $19 million, $10 million, and $9.5 million. The highest price last year was $7.8 million, the next dropped to $5.5 million. So there are people with the necessary funds -- and these sales are usually all cash -- who are deciding this is a good time to buy here. We have good open house attendance, lots of active buyers out looking -- still looking for value -- and we're seeing more multiple offers of late, even on properties that are not REO's. Homes that are well located, in good conditioned and priced to sell can go into escrow in less than a week, even some in the $2-3 million range. The area is looking forward to the U.S. Open at Pebble Beach next week. If the weather is good, there are often people at this sort of event who decide they'd like to have a property here!

America's Top 5 Most Expensive Homes

2010-05-14T20:49:00.000-07:00

1. $150 million
The Manor
Holmby Hills, Calif.

The home that Candy Spelling, widow of television giant Aaron, put on the market in 2008, out-prices every other property in the U.S. The 56,500 square-foot English-style mansion has a bowling alley, wine cellar, rooms for gift-wrapping and silver and china display, a library, gym and media room. Its 4.6 acres includes pools, a spa, landscaped gardens, a waterfall and parking for over 100 cars. Jeff Hyland from Hilton & Hyland Real Estate and Sally Forster Jones from Coldwell Banker Previews International have the listing.

2. $125 million
Fleur de Lys
Beverly Hills, Calif.

This 35,000-square-foot home, listed in 2007, is said to be modeled after Versailles, and the mansion makes no attempt at understatement. Its 12 bedrooms, 15 bathrooms, 50-seat screening room, Italian marble and gold-embossed leather walls ooze wealth. Owner Suzanne Saperstein hasn't compromised on the price in three years. After all, it's a relative bargain compared to the manor, just a few blocks away. The home is co-listed with Joyce Rey at Coldwell Banker Previews International and Robert Kass at Hilton & Hyland Christie’s Great Estates.

3. $100 million
Tranquility Estate
Lake Tahoe, Nev.

Tommy Hilfiger cofounder Joel Horowitz's 210-acre spread features the third-highest price tag in America. The 20,000-square-foot main house has extras like a cigar lounge, art studio and sports gym, while its grounds feature a golf course, boathouse and views of Lake Tahoe. A staircase in the home replicates the stairs of the S.S. Titanic. The home has been on the market for almost four years. Shari Chase at Chase International has the listing.

4. $80 million
Kaiser Estate
Honolulu, Hawaii

Separately, the three coastal parcels that comprise the former estate of industrialist Henry J. Kaiser wouldn't make this year's list, but together, the 5.5-acre property becomes one of the country's most expensive. The island getaway offers coastal views and a sleek mid-century style 15,000-square-foot home, extensively landscaped tropical grounds and a 12,000-square-foot boathouse and marina. Tech tycoon Fred Chan and his wife, Annie, put the home on the market in January 2009. Mary Worell of Sotheby's International Realty has the listing.

5. $75 million
Humming Bird Nest Ranch
Simi Valley, Calif.

Though it's named after the tiniest of birds, this property spans 123 acres. In addition to a 17,000-square-foot Spanish-Revival-style main house, six guest homes and 10 townhouses grace the estate, as does a fully equipped equestrian center and parking for 200 vehicles. If driving doesn't suit you, there's also a helicopter pad. On the market since late 2007, the home is co-listed with Drew Mandile and Brooke Knapp at Sotheby’s International Realty and Joyce Rey at Coldwell Banker Previews International.

Weekly Market Watch

2010-05-02T20:18:00.000-07:00

Reading the economic tea leaves: improvement in consumer confidence and financial markets bodes well for housing market

The health of the housing market has long been tied to other key economic indicators – everything from consumer confidence to the stock market to unemployment rates and hiring trends. For instance, the direction of the Dow is rarely in opposition to Bay Area real estate activity. Local economists and Realtors alike have often noted that the valuation trend lines of the NASDAQ and Silicon Valley home prices typically have a significant correlation. The chart below shows the strong link between Consumer Confidence and Home Sales in the US.

Last week, the Conference Board announced that its consumer confidence index rose in April to the highest level in more than a year and a half. The rise in the index was considerably higher than economists had expected. Although the University of Michigan’s consumer sentiment index took a small step back in April, it’s still hovering at levels not seen since early 2008.

Similarly, the financial markets continue to march higher as growing evidence appears that the nation’s economy is gradually finding its footing. The Dow Jones Industrial Average is up 7 percent year to date and a whopping 70 percent since its March 9, 2009 low.

One last headline of interest: The Federal Reserve last week upgraded its economic outlook amid a better-than-expected recovery, saying the beleaguered labor market is beginning to improve. But the Fed voted to keep interest rates at historically low levels and signaled that wouldn't change anytime soon.

Low mortgage rates, coupled with the April 30 deadline for the homebuyer tax credit, have helped to fuel strong home sales in many of our markets. In my travels last week to a number of our offices, I’ve heard from agents that many of their buyers have been rushing to beat the tax credit deadline.

All of this is encouraging, but it’s not to say that we’re completely out of the woods. The jobless rate is still extremely high in California and across the country. A new wave of foreclosures could hit the housing market in the months ahead. And the economic recovery is fragile and expected to be slow. But one has to be at least cautiously optimistic by these economic trends, which are so vital for the health and well-being of our housing market. One of the most important trends to follow is our Bay Area Month’s Supply of Inventory. It continues to drop at all price points, from less than 2 months at the entry level, to between 10 and 18 months in some of our Luxury markets. ( ex: San Francisco over $5 million: 19 months supply March ’09, dropped nearly in half to 10 months supply March ’10)

Below is a market-by-market report from our local offices:

North Bay — We continue to see increases in the Previews price range, both in listings and in sales in Marin County. Most recently the Southern Marin office secured the Marin Designer Showcase listing for $7,795,000. While the Greenbrae office says sales are increasing in that area, there is still some downward pressure on pricing. Areas such as Corte Madera and San Anselmo are doing well with a good percentage of homes in contract. The low end - under $1 million in Marin - is moving steadily. More much needed inventory continues to come on market. In Northern Marin, there has been a decline in REO's coming on the market and a steady stream of Short Sales. One home in Novato by our office at $1.4 million went into contact the following day. Cash is still king when buyers are making offers. The Santa Rosa market is holding steady with 350K and under listings very active, and the over $1 million market is seeing increased sales. In between it’s very quiet. Open homes remain well attended in Sebastopol, with more activity in the $500 - 700K range.

San Francisco— The Lakeside office reports the market is in full bloom. There are loads of well priced listings, and sales continue to increase. There are eight to 10 multiple offers every week. It’s also been a very busy two weeks, according to the Van Ness office - good sales activity at all price points. Over a third of the ratified transactions were multiple offers. Presentation and staging of property are still critical, as only the gems are getting the high activity. The Noriega office is seeing well-attended open houses and homes below $800,000 are in hot demand. One third of the sales had multiple offers. April has been very erratic, according to the Lombard office: a busy few days, then quiet. Open houses are well attended. There have been a variety of deals from stale listings going way under asking to 11 offers going 10% over asking. Fewer loan problems this month. The Market Street office tells a similar story. Ratified offers seem to be coming in spurts. Open house activity was slow over the weekend. Several closings are being held over from April to May in order to qualify for both federal and state tax credits.

SF Peninsula— Burlingame continues to see great listings get snapped up in multiple offers and well qualified buyers are waiting for the right inventory to come on the market. There are 75 active listings and 17 pending sales in Hillsborough. There is great value in a great area and some excellent buys available right now. In Half Moon Bay, more offers are being accepted with 'sale of property' contingencies. There’s good traffic at the open houses with serious buyers wanting to get into the market. We’re also seeing more activity on the higher end $1m + range. Our Menlo Park offices report agents have been really busy the last couple of weeks. Parents soccer field talk is that bonuses are coming back and 401ks are being reinstated. General feeling of stability is giving 'lookers' a basis to buy. There was a bit of the April 15th hangover last week, previous weeks had several offers written as the market heated up. Well priced listings are selling quickly. Two outstanding properties in San Carlos had multiple offers and sold for more than the asking prices of $1.85 million and $1.95 million. Open houses are very well attended. The San Mateo office reports that pending sales for the six nearby cities are up 33% from 2009 and closed sales are up about 50%. Quality inventory (shows well and priced right) is not as available causing the multiple offers. Similarly, the Woodside office says is has been as busy as they’ve seen it in since spring of 2007 and 2008. Buyers are far more cautious however. Many will make an offer and walk away if they do not have their terms met or discover any type of problem.

Silicon Valley– Our Cupertino office reports that they have never seen the market busier. Outstanding schools continue to propel the market. With decreasing inventory and strong demand, about a third of all sales are attracting multiple offers. Market activity is continuing to pick up steam in all price ranges in the Los Gatos area, with a Monte Sereno home closing at $3.45 million. Almadenpending sales are up slightly while Cambrian remaining very steady at 57% of inventory pending andBlossom Valley at 67%. REO listings have slowed and short sale approvals have increased. The Willow Glen office reports sales picking up for homes between $500,000 and $800,000. Open homes have been busy as well. Business is booming in the Saratoga area due to an improved Previews market and buyers focused on taking advantage of the federal tax credit. Sales of million-dollar homes are on the rise.

South County– The scramble was on last week - anxious buyers wanted to get into contract before the April 30 deadline for the federal tax credit, the Morgan Hill office reported. The South county market remains slow but steady - prices seem to be increasing as demand outpaces supply. There seems to be a more positive feeling among buyers, sellers, and especially agents. The fact that the media is reporting good housing news is also helping buyers feel more comfortable about purchasing. TheGilroy market has also been steady, but seems to have leveled off the last two weeks.

Santa Cruz – Overall, the Santa Cruz market appears to be improving. The median price is $519k vs. $399K a year ago. Inventory is down about 15% from a year ago, and the number of sales is slightly up - 109 closed transactions in March '09 vs. 129 in March '10. The unsold inventory index is down to 6.9 months vs. 9.7 months a year ago. Distressed properties continue to be a very large part of the market with 43% of the sales representing either bank owned or short sales. Issued default notices are down slightly about 10% from a year ago. Homes are selling at deep discounts and as one of our agents noted, "the market is looking for value." The Previews market is ever so slightly improving. However prices are significantly lower depending on beach vs. country properties. In March, the latest figures available, 12% of the sales in the country were over $1 million compared to 5% in February.

Monterey Peninsula — In the Carmel area, market activity continues at a steady pace. There were 37 new escrows in the last two weeks, which was very good. Listings are coming in at a steady pace. There have been a lot of price reductions, though not as substantial as we saw for a while. Prices on properties coming on the market seem to be more realistic now in most cases, so sellers are more in tune with current market place. There were a total of 82 open houses held over the past few weeks.

East Bay – Buyers are attending open houses in droves in Berkeley, up to 100 people at some listings. Buyers were scrambling to get into contract by the April 30tax credit deadline. They are not necessarily late comers, but frustrated first time buyers who have been beaten out of multiple offer situations all spring. Multiple offers occur at all price ranges where there is perceived value, reports the Oakland/Piedmont office. Even with multiple offers, prices are realistic. Buyers do not want to overpay but seek out the best neighborhoods and houses. Castro Valley reports a big jump in listings, but well-priced homes are still flying off the shelves, sometimes before agents can get the sign up. There are still a lot of short sales and a few REOs, but the pace is beginning to pick up for traditional listings. Sales in Danville are strong and open houses are well attended. Inventory is still low so there are many multiple offers. The Walnut Creek, Orinda and Pleasanton offices report that many first-time buyers are looking to take advantage of federal tax credit. Well-priced listings are receiving multiple offers in most all price ranges. There is a "positive" buzz in the air. Meanwhile, the Fremontoffice reports with the home buyers tax credit expiring there has been a decline in buyer activity. Listings are up which is typical for this time of year. Both sales and listings are increase in Livermore. The office reported five new listings over $1 million, and closed two sales above a million and higher end activity strengthened.

The weather is fantastic this weekend, open homes should be busy. Will we see a little less urgency on the part of some buyers now that the Federal tax credit purchase deadline hit on Friday? Or will the new California tax credits pick up the slack? Stay tuned, we may have some indication in another few weeks.

Home sales surge 6.8 percent in March

2010-04-22T17:41:00.001-07:00

Home sales rose more than expected in March, reversing three months of
declines, as government incentives drew in buyers and kicked off what's
expected to be a strong spring selling season.

The National Association of Realtors says sales of previously occupied
homes rose 6.8 percent to a seasonally adjusted annual rate of 5.35
million last month, the highest level since December. February's sales
figures were revised downward slightly to 5.01 million.

Sales had been expected to rise about 5.2 percent to 5.28 million,
according to economists surveyed by Thomson Reuters.

The results show the housing market may be stabilizing after a
devastating bust. But the true test will be whether the market can stand
on its own after federal tax credits expire at the end of this month.

Weekly Market Watch

2010-04-17T17:53:00.000-07:00

Housing Market Continues Recovery:

Sales and Prices Improving in Many Communities

So much for a Spring break in the housing market! Home sales and median sale prices in the Bay Area continue to rebound, with much of the improvement coming from the mid and even higher-price ranges, including our Previews luxury market.

MDA DataQuick, the La Jolla-based research firm, reported that March sales and prices hit a three-year high in the Bay Area region. The median price of $380,000 paid for a home was 31 percent higher than a year ago. Some 6,992 new and resale single-family houses and condominiums closed escrow in March, up 40.2 percent from February and up 10.5 percent from March 2009.

As I said in an interview with the Contra Costa Times, what is particularly encouraging about the latest report is that there were more sales of medium and high-end non-distressed properties and fewer foreclosures compared to a year ago. Foreclosure resales accounted for 31.7 percent of Bay Area existing home sales last month, down from 36.3 percent in February and 50.2 percent from a year ago.

We’re seeing improvement in higher-priced markets from Carmel through Silicon Valley and up to San Francisco and Marin. Cupertino reports that open houses are “insane” with 100-plus groups in some cases viewing properties and multiple offers surging despite an increase in inventory. I’m hearing similar stories in Saratoga, throughout Marin, The City, and even markets like Livermore, where there have been eight million dollar sales through March compared to two last year.

I think buyers are becoming more confident about purchasing a home now as the economy continues to show positive signs of a recovery and the stock market moves higher. Additionally, buyers are jumping into the market to take advantage of tax credits as well as mortgage interest rates, which could rise in the months ahead.

It’s important to remember that any road to recovery has its share of obstacles and potholes. There are still challenges ahead to the housing market, including stubbornly high unemployment and the expectation that another wave of bank-owned properties could hit the market in many areas before too long. Still, I am encouraged by the DataQuick report and our own updates from the field that we’re moving in the right direction again.

Here’s the Contra Costa Times article: http://www.contracostatimes.com/business/ci_14890565

Below is a market-by-market report from our local offices:

SF Peninsula— In Burlingame, multiple offers are happening every day in the $600,000 to $1 million range, as entry level buyer are scrambling to meet first-time buyer deadlines. When the price is attractive enough, open homes are drawing big crowds. We had one Millbrae home open in pouring rain with over 60 attendees. Consistent activity at all price ranges was reported in Redwood City.Open houses have been well attended there regardless of Easter and pouring down rain. The market in Menlo Park is mixed. Spring break combined with Easter weekend caused the market to slow slightly. However, good new inventory is still flying off the shelf. There were a few multiple offer sales the last couple of weeks. Buyers are out there, dipping their toes in the water. Sales and inventory are also steady in Half Moon Bay. In Palo Alto, the market has mirrored the spring school breaks - the last week or so has been relatively slow for sales and inventory. But our local offices expect the north side of Palo Alto to have more sales activity in the near future. The south side is waiting for more inventory to hit the market.

San Francisco— Sales and inventory have been steady to increasing in many parts of San Francisco.The Market Street office reports lots of counter offers going back and forth before ratifying a property. Open house traffic varies widely depending on the property. There are many first time homebuyers still looking and this is the price point that has the most activity. The Lombard office reports early April has been erratic: One good week, the next one slow. Many deals have multiple counters. Open house traffic has been quite high. But sales are still facing financing challenges. Similarly, the Noriega office states that financing and appraisals continue to be an issue on some transactions. The SF Van Ness office has seen steady activity in all price points the past two weeks, including a single family residence sale in the $350,000 range (yes, that’s City of San Francisco) as well as several closings in the $4M to $6.5M range. At least one of the sales in the latter range had multiple offers. Also, a well cared-for and staged, but dated 1950’s home near Lakeshore priced about $900,000 had 13 offers, with a few at the top competing well over list price.

Silicon Valley– The Los Gatos market is picking up “dramatically.” Inventory is increasing inCupertino with about a third of the listings that sell getting multiple offers. Open houses are “insane” with 100-plus groups in some cases viewing properties and multiple offers surging despite an increase in inventory. In San Jose-Willow Glen, sales are steady but inventory is still low. This is resulting in multiple offers, but it is a disadvantage to buyers. Saratoga reports a strong uptick in Previews sales over $1 million.

North Bay— Our Greenbrae office reports that activity in Central Marin is brisk. Inventory continues to come on the market and buyers are still finding some bargains. The Previews market is holding strong with multi-million dollar properties in Ross, Kentfield, and Tiburon/Belvedere attracting a lot of excitement. A similar story is being told in Northern Marin where 39% of listings went pending in the month of March in Novato. The majority of new inventory to hit the market is non-distressed. One home in Novato over $1.9 million went into contract. Things did slow down a bit with spring break in Southern Marin, but in general sales and inventory are up. The Petaluma market is starting to see a lot of activity in the $500 - $700K range. They are experiencing up to five offers on some homes and anticipate more inventory under $800,000 coming to market. Santa Rosa continues to see action in the lower price points and increased action in the high end. The middle of the market is still very quiet. Sales are on the rise in Sebastopol, but Easter week and heavy rain seemed to slow activity at open houses last week.

East Bay – Activity is good in Danville, but closings are still often challenging - lots of delays because of short sales and appraisal issues. The Windermere area of San Ramon is hot. A year or two ago there was lots of inventory and little demand. Now it is just the opposite. A new listing there got six offers in less than a week. Home sales above $800,000 in Livermore have been four times the amount of closed sales compared to 2009 through March. Our average closed sales price for the first three months in 2010 is almost 21% higher than the same period in 2009. Multiple offers are very common in Livermore, as we only have a 1.9 month supply of detached homes on the market at the current sales pace. Inventory is steady and sales are on the rise in Orinda, with entry-level properties continuing to move quickly. Fremont reports more REO's than short sales. Even though right now the market shows a decrease in sales, compared to last month at this time it has increased.

Santa Cruz – Market inventory has been recently increasing along with sales activity. Well-priced properties are selling with multiple offers. However, the market is still showing signs of correction in the higher end inventory with price reductions occurring throughout the area.

Monterey Peninsula — Activity continues to be steady on the Monterey Peninsula and greatly improved over this time last year. Even the higher priced areas, like Carmel, are doing well as buyers become more confident about purchasing right now and want to take advantage of interest rates before they go up more, as is expected. However, we are expecting more REOs to come on the market in Seaside and Marina.

South County– Unlike some other Bay Area markets, the South County market remains steady to slow. In Gilroy, homes are staying on the market longer when initially listed. Buyers seem to be cautious when making offers. Some properties are still receiving multiple offers, but at less than list price, most likely due to appraisal concerns. Morgan Hill agents attribute the slowdown to the lack of inventory, lamenting that there are very few homes to show and those that are priced right and look good garner multiple offers and often sell for over list price. Though this is good for sellers, buyers are becoming frustrated and discouraged. On the bright side, prices are increasing as demand far out weighs supply.

A final note on the Previews Market: Activity and sales overall are on the rise. So far this year, Mill Valley has seen nine $2 million-plus properties close escrow, versus only three a year ago. There are currently 68 active and 18 pending listings in Hillsborough, a stronger absorption rate than we’ve seen in quite some time. New listings in all price ranges are coming on the market and entry-level properties under $2 million are bringing in multiple offers. We are hearing similar reports in the City and other higher-priced markets throughout the Bay.

Economic Commentary: Two Fronts – Jobs and Confidence

2010-04-15T10:04:00.000-07:00

by Lawrence Yun, NAR Chief Economist

Well, we may as well get ready for it. Yes, mortgage rates continue at historic lows, averaging around the 5-percent mark recently. But rates are likely to rise. By December of this year, the average mortgage rate could be close to 6 percent – perhaps as high at 6.5 percent. Why? The reasons for the increase are the macroeconomic forces of a recovering economy and a very high budget deficit. If the U.S. government has trouble borrowing and has to raise interest rates to attract investors to purchase U.S. debt, then the rest of the private sector will also pay higher interest rates.
The good news from that somewhat sobering scenario is that consumer price inflation will remain relatively benign and wage growth tepid, keeping the lid on borrowing rates and preventing them from rising too high. I do not foresee the mortgage rate going above 7 percent, at least for a prolonged period, in the next two years. Those engaged in the jumbo loan market or commercial real estate will note that rates are already that high. But current high rates on jumbo and commercial real estate loans are due to the lack of government guarantees. As the financial market exhibits clear signs of stabilization and as banks continue to build up their capital buffer, it is only a matter of time before lenders start lending to non-government backed sectors. So the underwriting standards for jumbo and commercial real estate mortgages could become less stringent from improvements in the bank capital situation just as interest rates on conventional and FHA mortgages begin to rise.
So, down the road we will have to face into the headwinds of higher mortgage rates on conventional and FHA loans, as well as the expiration of the home buyer tax credit (which ends in April for contract signings). Foreclosures also will remain troubling, as they will surely be just as high this year as last year. Is housing headed for more trouble or for a full recovery? The answer depends on two potentially big support factors: Jobs and Confidence.
Jobs
Potential home buyers (both first-timers and repeat buyers) who hold stable jobs respond to mortgage rate changes. But a new cohort of stable job holders needs to be created in order to sustain housing demand. In March, we saw the first meaningful job additions to the economy in more than three years as a net 162,000 new workers (payrolls) were added to the economy.
March’s job creation figure looks light in the aftermath of 8 million brutal layoffs over the past two years, and it will take some time to make up the difference. From April to the end of 2010, one million jobs could be added to the economy. Another two million could be in the offing next year. It may take four full years to fully recover all the job losses, but at least the darkest part of the job tunnel is behind us. Even the high-paying but hard-hit manufacturing sector appears to have turned the corner with 17,000 job gains. Surprisingly, the construction sector added jobs as well, despite very weak housing starts and a dearth of commercial construction. Infrastructure spending no doubt is helping. Employment in rental-and-leasing also rose – by 1,800. Separately, and to gauge competition, NAR membership in March was 1.063 million, little changed from the 1.068 million one year ago, though down from the peak 1.4 million members in 2007. Past patterns indicate that NAR membership rises from spring well into autumn, before a seasonal dip in winter.
Confidence
A second factor that will be important in supporting the housing market is consumers’ views regarding home purchases. In the past three years, most metro markets experienced successive price declines; rational consumers asked “why buy now when I can buy later for less?” Renters have been staying put for an average 19 months in recent times before making a move versus the typical 14 months (this, according to a Wall Street Journal report). Census data suggests suppressed household formation in the past two years – meaning more people living with roommates or with parents – and so not seeking their own housing.
But with home prices showing signs of stabilization, the change in attitude towards home buying could be at hand. NAR’s median home price data in February indicated only a slight decline from 12 months earlier, while the Case-Shiller price index showed a modest price increase. This price stabilization came about because home buyers responded to the tax credit. There was a surge in home buying late last year as the original tax credit deadline loomed. Pending home sales in February also stirred higher, hinting the beginning of a second surge as the April deadline approaches. This forward momentum will likely – perhaps definitively – signal the “bottoming out” of home prices in few months time. Only then will consumers fully regain their confidence about home purchases. Of course, this home buying confidence is not directly observable, though we know it plays a big factor. A separate consumer confidence index, based on several qualitative questions tallied by The Conference Board, has not shown any notable improvement of late, however. This index stood 70.2 in March, about the same level as the prior nine months, though much improved from late 2008 and early 2009 in the midst of the financial market crisis. (For more information about The Conference Board’s Consumer Confidence Index, see the In Focus column in this issue of Real Estate INSIGHTS.)
Economy
The broader production economy has been doing quite well. GDP expanded robustly by 5.6 percent in the final quarter of 2009 following the 2.2 percent growth in the prior quarter. That’s the good news. The somewhat bad news: the increased production came about with far fewer workers – i.e., fewer workers doing more work. But with GDP growth expected to continue in 2010, albeit not very robustly, the job creation momentum appears intact. Business spending growth has been solid. International trade has picked up volume. The stimulus impact of government spending is also adding to production. But more importantly, the all-mighty consumers are beginning to open up their wallets as they feel more comfortable about their finances.
The baseline outlook is for steady economic growth of near 3 percent this year and in 2011. Note that GDP growth typically tends to be better than 5 percent in the immediate years following a recession, so the growth outlook can be considered subdued. Balance sheet readjustments by both banks and consumers to put aside more for future rainy days will be one key reason holding back growth potential. Nonetheless, the near 3 percent GDP expansion will accompany job growth of about 2 million each year from 2011. Such job growth will boost existing home sales to 5.5 million in 2010 and to 5.7 million in 2011. For comparison, sales were 5.16 million last year and reached 7.1 million at the peak of the housing boom in 2005.
Risks
There are always risks to forecasts. Energy is one: big oil price swings always put a monkey wrench in any economic forecast. For each $10 per barrel rise in oil prices, $80 billion is removed from the economy, though oil-producing countries like Norway benefit immensely. For perspective, oil prices have risen from an average $60 a barrel in 2009 to $85 a barrel in early April 2010.
Another bigger risk – although with a smaller probability – relates to the budget deficit and some possibility of federal spending spiraling out of control. Currently, both foreign and domestic investors justify the high deficit as necessary to boost the economy and to be manageable over time. Keynesian economics backs up that view: go into deficit spending when private demand falters to pull the economy back on track. The recent enactment of truly historic health care legislation will not bust the budget – in fact, it becomes a cost saver over time – at least according to the Congressional Budget Office. But what if the CBO’s projections are way off the mark (which has happened on a few occasions). Then there could be some major headaches ahead. An uncontrollable budget deficit will force interest rates up, perhaps significantly if, for instance, China rushes to the exit. That would push the U.S. economy into another recession. Another recession would mean an even higher budget deficit as there will be fewer people working, thus smaller tax revenues.
Amateur History
Sometimes it is worth a look back into history for some guidance and fun. “Deficits do not matter,” said former Vice President Dick Cheney. Mr. Cheney was addressing the Steady economic growth of near 3 percent this year and next year will accompany job growth of about 2 million each year from 2011 – such job growth will boost existing home sales to 5.5 million in 2010 and to 5.7 million in 2011.experience of the then very high Reagan era deficits that brought robust economic growth and huge job gains. But that was a time when foreigners had just started to finance a U.S. budget deficit in a meaningful way. Today’s deficit is much larger than during the Reagan years and more dependent than ever on foreigners, particularly China, buying U.S. debt.
Let’s look back even further. England truly became an unmatched superpower beginning at the time of Queen Elizabeth I. She was guided by an economist named Gresham, who had no knowledge of Keynesian economics (Keynes would have to wait several centuries) but an abundance of every-day common sense. Gresham had this simple advice: we need to bring the borrowing costs down and strengthen Her Majesty’s currency. To achieve that meant balancing the books. Building a rainy day fund was even better. The Virgin Queen took his words of caution to heart. England invested in a navy (for that rainy day) and Elizabeth did not build a single new palace during her long years of reign. Queen Marie Antoinette, across the channel and in a different era, was known for her frivolous spending habits. In fact, she had a nickname during her reign: Madame Deficit. France was facing ruinous budget problems, and while most of those were unrelated to Marie’s penchant for spending, the image of “out of control” spending added to the revolutionary fervor as the basic needs of the French people were not being met.
I know times have changed from those during Elizabethan England and Revolutionary France. And the U.S. is neither of those nation states. President Obama will no doubt go down in history as one of the most transformative leaders – for better or worse – primarily because of health-care reform. The debate on that health care law continues, sometimes vehemently from both sides. No American President will want to be labeled with Marie Antoinette’s moniker. Only time will tell if President Obama’s health care legislation will go down in history as a monumental success of lowering cost and enlarging coverage or a monumental failure of long queues and resentments and continuously climbing budget deficits. Perhaps one day U.S. policies and programs will allow our nation to build comfortable rainy day reserves while at the same time spend tax revenue on Americans to meet their basic needs. Easier said than done, of course. Which is why if it were to ever happen, that President – whoever he or she may be – will go down in history as one of the greatest ever.
PULL QUOTE: In March, we saw the first meaningful job additions to the economy in more than three years as a net 162,000 new workers (payrolls) were added to the economy.
PULL QUOTE: Steady economic growth of near 3 percent this year and next year will accompany job growth of about 2 million each year from 2011 – such job growth will boost existing-home sales to 5.5 million in 2010 and to 5.7 million in 2011.