More Signs that Housing Market is Stabilizing as New Year Begins

Last year closed on several positive notes when it came to the housing market, and a number of recently released reports suggest we could be seeing the market stabilizing and even gaining some momentum as we begin the New Year.

Noted housing economist Liz Ann Sonders of Charles Schwab said in a recent report that “we’re seeing a light at the end of the housing tunnel.” The senior vice president and chief investment strategist for the brokerage firm pointed out that the pending-home-sales index surged more than 7% last month to its best level since April 2010.

“At that point, housing was artificially supported by the homebuyer tax credit,” she said in her new economic forecast. “The last time pending sales were at the current level without government support was June 2007.” Adding to the optimism, Sonders said, was the fact that the latest construction spending report was well ahead of expectations with most of the gains in private housing.

Sonders isn’t alone in her estimation that real estate could be bottoming out. In a report released Monday, Clear Capital, a real estate valuations company, predicted that prices in the San Francisco-Oakland-Fremont metropolitan area will remain flat this year versus a 4.7 percent drop in 2011.

The firm said Silicon Valley should see a 1.6 percent increase in home prices, compared with a 2.5 percent drop last year. "This region overall is doing pretty well," Clear Capital research director Alex Villacorta told the San Jose Mercury News.

Also encouraging was a report out Thursday that California foreclosure notices and actions decreased by 21.7 percent in 2011, although the state still had the nation’s third highest foreclosure rate, according to Irvine-based data firm RealtyTrac.

The positive signals add more evidence that the housing market overall is moving in the right direction as we begin 2012.

Of course, we’ll continue to face headwinds. While foreclosures declined sharply last year, the drop was in part due to legal and regulatory issues that prompted lenders to delay action on delinquent borrowers. That “shadow inventory” of distressed homes could come back on the market this year, although it’s doubtful we’ll return to 2010 levels again.

The jobs picture is improving, although there will be bumps along the road as we saw this week. Weekly unemployment claims spiked last week more than expected after companies let go of thousands of holiday hires.

And while predicting that the real estate market has bottomed, Schwab’s Liz Ann Sonders believes the recovery in housing will be a slow and gradual one, similar to how she sees the recovery in the overall economy playing out.

Nonetheless, the economic and housing news in recent months continues to trend higher and offer reason for encouragement that 2012 will truly be a “Happy New Year.”

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

San Francisco – The end of year seemed quiet, according to our Lakeside office, but the activity was more than double that in the last days of the prior year. December was a very slow listing month, the Lombard office manager says. You’d think that buyers were on vacation until a well-priced, turn-key home pops up and there’re 11 offers. Hoping for a post-holiday listing surge as inventory remains thin. Still 11th hour lending problems occur on many closings. Our Market Street office reports that the last two weeks of the year seemed to indicate that much of the unsold inventory was finally spoken for.    Properties that sold in the final two weeks were on the market for an average of 85 days, compared to our final quarter of around 36 days.  Inventory diminished significantly toward the end of the year, and buyers saw an opportunity to go out and make deals on unsold property.    We also saw a flurry of ratified contracts with very clean terms and buyers desiring to close by year-end, so perhaps tax benefits fueled a last minute surge as we approached 2012. In the Sunset district, it looks like the buyers did not take time off during the holiday season.  Sales activities did not drop off during this period but remained very strong.  Listing inventory is extremely slow.

SF Peninsula — Burlingame agents were busy all through the holidays but waiting for some inventory to come to the market. In the Previews high-end market reportedly there will be some great listings coming on in the next 30-60 days. Across the hills in Half Moon Bay, listings came off the market for the holidays but sellers are looking to re-start the marketing mid-January.  Agents were busy the week between Christmas and New Year’s as buyers are sensing it’s a great time to buy. Our Palo Alto manager reports that the local market is seasonally slow after the holidays.  Inventory is very, very low in the local communities – from entry level on up. It has definitely been a holiday market, according to the Redwood City office, with very little activity and low inventory. The San Mateo area market is showing good signs of buyer and sellers interest - more balanced than 2011, the local manager says. Per MLS of the four Hillsborough listings that closed escrow in December only two had a sales price over $2 million and of the four homes with ratified sales in Hillsborough, only one had a list price over that level.  Of the 48 homes ratified in San Mateo, one had a list price above $2 million.  There appears to be pent up demand for higher priced homes not in MLS.

Silicon Valley – It was holiday light, according to our Cupertino office, with both sales activity and inventory declining in recent weeks. A similar story was told by our Los Altos manager, who said agents saw very little activity over the holidays with few buyers out looking and fewer listings coming to market. But in Los Gatos, the typical seasonal slow-down was absent.  Agents managed to attend their walk-throughs, sign offs and continue to show and sell properties amidst the hustle and bustle of the holiday season.  While most of the San Jose area saw the usual holiday slowdown, the Willow Glen office reports that things were fairly busy with 20 new sales.  According to our Saratoga office, the local market experienced its typical holiday slowdown. The agents working are the ones that have deals that need to close by 12/31 and those that are determined to plan for 2012.

That’s it for now. Have a great weekend.

My husband loves a good burger, he probably enjoys one a week- loaded with bacon, cheddar cheese, the works!  I, on the other hand, can take or leave a burger.  It seems like a nice treat, something I might enjoy on vacation or for the 4th of July.  Well, that was until I had a Five Guys Burger when visiting my cousin in Portland.  Let's just say that my husband did not get his 'half' when we split that burger!  Juicy, 100% natural American Beef, loaded with toppings, I fell in love.  That was about 15 month's ago.

Lucky for me,  the first Five Guys to the Bay Area Peninsula just opened up in Burlingame over the weekend.  Located at 203 Primrose between Howard and Burlingame Ave.  Stop by and enjoy a Burger, Dog, Veggie Sandwich and unbelievable fries.  You will not be sorry! While there spend some time on Burlingame avenue doing a little shopping and take your kids to Washington Park for some hoops or a trip down one of the three slides!

Time to take advantage of low interest rates.  Current mortgage rates are down 1% from 11 month's ago.

30 Year Conforming: 4%

30 Year Jumbo: 4.25%

FHA Loans available up to $729,500 with only 3.5% downpayment.

Super Conforming loans up to $625,500 are available with less than 20% downpayment.

If you can lower your current mortgage rate by .5%- call me today and I will refer you to a fabulous mortgage broker who can help lower your monthly payment!

Happy New Year Everyone!

It was a fabulous 2011 for our group of top Burlingame Real Estate Professionals both at work and personally.

We are very proud of our list of sales for the year.  We brought results to these buyers and sellers in 2011 and we can do the same for you in 2012!

1. Hayne Road, Hillsborough (represented buyer and seller)
2. Bridge Road, Hillsborough ( represented seller)
3. Darrell Road, Hillsborough (represented seller)
4. El Arroyo Rd, Hillsborough (represented seller)
5. Cabrillo Ave, Burlingame (represented seller)
6. Uplands Drive, Hillsborough (represented buyer)
7. Black Mountain Road, Hillsborough (represented buyer)
8. La Mesa Drive, Burlingame (represented seller)
9. Alameda de las Pulgas (represented seller)
10. Mounds Rd, San Mateo (represented seller)
11. Bonita Lane, Foster City (represented buyer and seller)
12. Grunion Ct, Foster City (represented seller)
13. Denham Ct, Hillsborough (represented seller)
14. La Cuesta Rd., HIllsborough (represented seller)
15. Rolling Hills Ave., San Mateo (represented buyer)
16. Mayflower Lane, San Carlos (represented buyer and seller)
17. Iowa Dr., San Mateo (represented seller)
18. Palma Road, El Granada (represented buyer)
19. Durand Ave, San Mateo (represented buyer)
20. Trollman Ave, San Mateo (represented buyer)
21. Davey Glen, Belmont (represented seller)
22. Churchill Rd, Hillsborough (represented landlord)
23. Woodridge Rd, Hillsborough (represented tenant)
24. North San Mateo Dr., San Mateo (represented buyer)

BURLINGAME HOLIDAY TREE LIGHTING AND PARADE- FRI DEC 2ND AT 5PM

Do not miss this wonderful annual event in downtown Burlingame.  Coming this Friday December 2nd, festivities will begin at 5:00PM at City Hall, 501 Primrose Road with introductions, entertainment and lighting of the tree. Following the tree lighting, activities will move to Burlingame Avenue. Following is the current schedule of events:

6:00PM - Parade will start near El Camino Real and Burlingame Avenue. The parade will feature the Capuchino High School marching band, Burlingame High School Cheerleaders, community groups, civic leaders, chorale singers and Santa!

6:30PM - Entertainment will begin at the stage on Primrose Road

*    The Elks Club band will play Holiday favorites at Lorton Avenue.

*    Train rides will be available for children free of charge on Burlingame Avenue.

There will be 2 loading areas for the train.  1 by Copenhagen Restaurant and 1 by La Boheme Restaurant.

*    There will be a Skating Rink located on Park Road by the Apple store.

The rink will be open from  Friday, December 2 through Sunday,  December 4.

Hours of operation will be Friday 6 - 9PM, Sat. 10AM - 8PM and Sun. 10AM - 2PM.

This is a synthetic surface that provides the thrills of ice skating without the cold or the

hard surface.

It is a great experience for children and novices alike. The fee is only $3 for 15 minutes

which includes skates. Children under 5 are $1 with paid adult.

*   Amusement Rides will be on the 1100 Block of Burlingame Avenue.

Santa will be available for wishes lists and pictures on the Avenue in front of The Van's shoe store (across from The Landmark).

8:30PM -  Last call for rides, entertainment ends, Santa says goodnight.

9:00PM - Skating Rink closes.

Remember our stores will be open for shopping, restaurants for dining and clubs open for nightlife. Start you Holidays right, shop Burlingame, shop Downtown!

Mixed Bag for Bay Area Housing Market, But Buyers Still Out There

Housing recoveries – like housing downturns – never move in a straight line. As much as we’d like a clear, fast turnaround, real estate cycles are never that way. They seem to have lots of fits and starts, two steps forward and then one step back. We’re reminded of this economic truism as we looked at the Bay Area housing market over the past month.

As DataQuick, the La Jolla-based real estate research firm, reported recently, Bay Area home sales increased in August – the most recent figures available – by a solid 12.2 percent from a year ago. But the good news was partially offset by the fact that median sale price dipped nearly 4 percent with distressed property sales accounted for nearly half of the sales. It was the 11^th straight year-over-year monthly decline in prices.

Clearly, bargain-hunting buyers chasing distressed properties continue to be a driving force in the market. That’s as true here in the Bay Area as it is in markets across the country. And it’s not just entry-level prices that are attracting bargain shoppers. An REO listing in our Southern Marin office priced at $858,000 received 16 offers and will sell for substantially over list price.  We’ve seen similar stories play out in the East Bay and South Bay as well.

But this doesn’t tell the whole story of what’s happening in the Bay Area housing market. It’s not just the bank-owned and short-sale properties that area getting buyer attention. As I mentioned in my last column, we have a real, honest-to-goodness housing shortage in many of our communities – at least a shortage of reasonably priced, well-presented homes. And it’s not just at the lower price ranges.

A $2 million plus home went into contract immediately following the broker’s open house last week in Mill Valley, continuing to prove there are buyers for homes that are perceived to be good values, even on the high end.   Another one for $1,350,000 received offers right away.

Marin County isn’t the only region to have buyers ready to purchase but is struggling with a shortage of attractively priced listings:

• Our San Francisco Market Street office said two-thirds of its sales had multiple offers, generally more than five for every property.  “Ratified contracts seem to be happening almost immediately after the first open house with strong back up offers in place,” the manager noted. “Price, location and well-staged, clean property sells fast quickly.   We are starved for inventory, as buyer demand is very strong.”
• In Berkeley, our local office says they’ve had a string of four strong months of home sales since the end of May. Even though there are still challenges with sellers, buyers and lenders, sales are steady. And even those homes that saw deals fall through are selling again quickly. And buyers, who may have dropped out or canceled deals, are coming back to the market.
• In Sebastopol, our local manager said as surprising as it may seem, they have a “sellers’ market” once again. One new listing had more than 45 people at the open house and another new listing had multiple offers the first day on the market.

The current market is sort of a catch-22 for sellers: Many pulled their listings off the market or decided not to sell at all for fear that they couldn’t get top dollar for their homes in this challenging housing market. But in doing so, they’ve created an inventory shortage – not in every town or every neighborhood, but in many communities.

As our San Jose Almaden manager noted, with inventory shrinking, it seems to be leaving only motivated buyers and sellers. Those sellers who “had to get a certain price” seem to have taken their properties off the market.  Those left are more willing to price their properties competitively given the market realities, which is leading to sales – and multiple offers in many cases.

This all is not to say that every home in every community is seeing buyers beat a path to their door. As another manager noted, while some new listings flew off the shelf, others have languished. A number of agents who held open houses for homes that have been on the market for quite a while received no visitors in recent weeks, even after price reductions.

Two steps forward, one back.

So where does this all leave us? The Bay Area housing market has fared considerably better than most other parts of the country. We’ve seen solid improvement in many communities since the nadir of the recession. The high-end markets in Marin, San Francisco, the Peninsula and Silicon Valley have all have bounced back nicely – if not all the way back to normal.  And the entry-level market and distressed housing market continue to see good activity from investors and average buyers alike.

But at the same time, many lower and mid-priced markets are still churning through the recovery process. Some buyers are still hesitant to pull the trigger on a purchase while they remain concerned about their job future, the stock market and the economy in general. And distressed sales continue to put downward pressure on prices.

We’ve come a long ways since the recession and are moving in the right direction. But it’s going to take time. Housing recoveries always do.

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

San Francisco – The San Francisco Lakeside area has been steady, our local office reports. Tuesday Broker tours are slow, but well-priced public open houses are mobbed and buyers are active and fight for properties when they are well priced. Sales activity is on the rise, according to our Market Street office manager. The office saw a strong finish to September with two-thirds of the sales multiple offers, generally more than five offers per property.    Ratified contracts seem to be happening almost immediately after the first open house with strong back up offers in place.   We have limited inventory, and location seems to be key.   Price, location and well-staged, clean properties sell quickly.   He says agents are starved for inventory, as buyer demand is very strong. Our Sunset manager says the local market remains steady – great open houses activity and market pricing the key to getting the listing sold.

SF Peninsula — Our Burlingame offices say there is a lack of inventory in the $800k to $1.5 million range. There are lots of buyers in the pipeline all just waiting to jump on low rates and waiting for the perfect property to come along.  It is a bit slower than normal but open house attendance has picked up and our managers anticipate a good last quarter. Some very dramatic price reductions are making Hillsborough a great buy right now. Inventory has built up over the summer, offering many choices to luxury home purchasers. The Menlo Park offices report sales activity is increasing with listing inventory holding steady. Our Palo Alto manager says the market is seasonally slow in the mid-Peninsula high-end area.  One week it seems to be doing well and the next week it’s slow. In Portola Valley, our office reports that they have seen some strong sales these last two weeks.  List prices include properties priced at $12.5 million, $6.9 million and $4.4 million.  The Redwood City market has been quiet of late. There is a great amount of focus to get escrows closed prior to drops in loan limits at Freddie Mac and Fannie Mae, our San Mateo office says. Escrow and lenders are working hard to meet the deadline.  There have been fewer closings in September, but a slight increase in pending sales.

Silicon Valley – In Cupertino, well-priced homes with excellent schools are still getting lots of attention and multiple offers. Open houses continue to be busy. Los Altos has seen an increase in sales activity, but buyers are still very selective.  Multiple offers are coming in closer to list price. The Los Gatos market has been steady as the high end continues to remain strong. In San Jose, our Almaden office says that shrinking inventory seems to be leaving only motivated buyers and sellers.  Those sellers who “had to get a certain price” seem to have taken their properties off the market.  Those left are increasingly pricing them correctly for the market, which is leading to sales.  REO listings and sales continue to dominate the market when it comes to multiple offers. The San Jose Main office manager reports listing activity is down, however buyer interest seems to be increasing. Open houses the past two weekends had lots of activity and the upper end of the market is picking up. Sales activity is increasing, according to our Willow Glen office. But short sales are taking longer for bank approval. In Saratoga, September started out slow and then increased as we headed to the end of the month. The end result put the local market on target for monthly sales.

That’s it for now. Have a good week!

What is the #1 reason people move to the peninsula???? SCHOOLS!

2011 API scores are out.  If you would like further information on any of these school or scores in a different district, please email us at homes@monicaseegergroup.com.