Below is a market-by-market report from our Bay Area Counties
North Bay – Multiple offers are the new normal right now, our Greenbrae office reports. Agents are experiencing an increase in buyer activity there continues to be a severe shortage of inventory – two month’s supply in Marin. Inventory is half of what it was this time last year and the year before. Our Sebastopol manager can’t remember a time when there was so little inventory available. If it’s in good condition and priced appropriately it will sell and probably with multiple offers. Activity is holding steady at open houses in Southern Marin. Our local manager says agents are seeing about the same number of units sold to date versus year ago in Mill Valley, but a 44% increase in Tiburon and a 38% increase in Sausalito. A severe lack of inventory is the biggest challenge currently, as there is far more demand than supply.
San Francisco – The weekly broker’s tour volume is about 1/3 of what it was last year, our Lakeside manager reports. Buyers are frustrated and agents are feeling desperate because for every multiple offer situation there is 1 winner and 6-10 missed sales. Yet sellers are not responding with new listings; some of them are stuck with no equity and don’t have cash to move even though they want to. Yet interest rates remain low and home affordability is terrific compared to past years. Most important is that buyers do everything they can to get the house they want so they don’t have to continue the process. It’s the same story for our Lombard office: everything is dominated by a lack of inventory. Stale listings are selling, sales in one day, 17 offers on a fixer, most probates being overbid, heavy open traffic, frustrated buyers, off-market pre-emptive sales, cash deals winning the bidding. Great time to list! According to our Sunset office, the very few listings on the market are selling quickly and with the majority of them receiving multiple offers. A condo listing in SOMA that was listed 12 months ago and did not sell came back on the market with a higher listed price (5%) and sold within a week at over asking.
SF Peninsula — Sales activity is on the rise, according to our Burlingame office. There is a definite positive attitude in the buyer’s market. Five to seven offers on Burlingame, San Mateo, Belmont and San Carlos properties are becoming the norm. Buyers are waiving contingencies and appraisals after going through four or five tries to buy a property and losing out. There are also a lot of cash buyers, which adds to the frustration of those trying to buy with conventional financing. The luxury end of the market is also picking up. We are seeing the early Facebook/tech company etc. buyers coming to Hillsborough and in most cases making cash purchases. Our Half Moon Bay office says agents are enjoying the overflow from the Peninsula with all their multiple offers. This overheated market continues to be short on inventory and long on buyers, our Menlo Park manager reports. All the buyers who have been ‘sitting on the fence’ for the past 18 months have now all jumped off at the same time. Our manager compares it to stock market anticipation. “In 3 months, great corporate earnings are coming out, Apple is going to launch their new IPad and great employment numbers are coming out – all anticipation.” Like the old saying – Buy on rumor and sell on news. In Palo Alto, extraordinarily low inventory is resulting in numerous multiple offers. It’s a very frustrating market for buyers and agents alike. Woodside and Portola Valley are not experiencing the frenzied activity that we are seeing in Palo Alto and Menlo Park. Price points are higher and sales are slower. The higher the price, the more cautious the buyer. Many younger buyers want more unban, close to town and transportation locales. Our Redwood City manager says the few open houses in the area had had an amazing amount of people through. San Carlos properties are selling very quickly usually with multiple offers. Redwood City seems to take a little longer but if priced correctly in a good location homes are also getting multiple offers but usually not as many. Belmont inventory is also low but again if priced right in a good location they are also selling. The main drive seems to be affordable money and lack of inventory. Our San Mateo manager says inventory levels are dropping lower and lower. Buyers are out there as multiple offers indicate. The high-end market is also improving.
East Bay – Buyers are out in force in Berkeley and hungry for attractive homes, priced right and in nice neighborhoods. Our local manager said there were more than 200 visitors to last Sunday’s open house on just this kind of property. We hope homeowners/sellers begin to notice, she said. The Livermore real estate market in 2012 has been very strong. Active listings in Livermore are down 42% year over year while pending sales are up 18% compared to the same time last year. Closed sales in Livermore for February 2012 were up 53% compared to February 2012. Multiple offers are common, but homes with location issues are still getting multiple offers, although below asking price. Our Oakland/Piedmont manager says it has been mostly multiple offer situations for the agents in her office both on the listing and the buyer side. More back-up offers are being agreed to due to the lack of inventory in Oakland, Alameda, and Berkeley areas. She doesn’t see any easing any time soon as agents who are attempting to get more listings to market are not always successful in speeding up their client’s timetable. Our Orinda manager reports that buyers are very active and open homes are heavily attended. Most sales are multiple offers with buyers making many concessions (paying transfer tax, paying home warranty, etc.). In Walnut Creek, new listings are flying off the market with double digit multiple offers, which are making final prices over asking. Inventory is still low. We are also seeing cash buyers more frequently. Buyers are ready to go. Sellers seem to be more ready to list.
Silicon Valley – It is remarkably busy out there, our Cupertino manager reports. Buyers appear to be desperate to get houses. Buyers are snapping up the new listings of single-family homes in good school districts, our Los Altos manager says. And the $2 million-plus market is getting stronger. The Los Gatos area market continues to heat up with multiple offers increasing. Our office had a $2.1 million dollar property listed on the MLS last year for 90 days that did not sell. The seller re-listed the property with our office this year and received multiple offers and it will close escrow over list price. What a difference a year makes! The Saratoga market is red hot. Most properties have anywhere from 5 to 15 offers presented. Many properties with multiple offers are selling well over 10% over the listing price. The winning offers tend to be all cash offers, with no contingencies and with very quick closings.
South County – Morgan Hill is just a little drive south from the booming Silicon Valley. The expectation of our local agents is that those potential buyers who are seeking more for their “real estate dollar” will venture to South Valley. This phenomenon has actually started, our Morgan Hill manager says. Agents are reporting that some buyers are being priced out of the market in San Jose, Mt. View, and Sunnyvale and are discovering better value in South Valley. Recently a Morgan Hill agent listed a Mt. View home for $1.4 million dollars (1400 square feet) and is expecting multiple offers—those sellers will come to Morgan Hill and buy a comparable home for about $600,000. It seems that “optimism” has replaced pessimism and that a renewed energy is running through our industry. Inventory remains low and buyer interest is high—all good signs that the recovery is on course.
Monterey Peninsula – Sales activity continues to improve, our Monterey Peninsula manager says. There have been 42 ratified offers in recent weeks and many multiple offers, especially in the lower price ranges. Sales are also increasing in the upper end of the market.