Homescopes

These two neighborhoods are in the south-east portion of Pacifica.  Some of the streets in these neighborhoods offer beautiful views, either ocean, canyon, or bridge (the new one at the Devil’s Slide Tunnel).  Park Pacifica neighborhood, also known as “the back of the valley” is one of the warmer areas of Pacifica and the San Mateo County coast.

This shows MLS (San Mateo County) statistics for the months from February 2008 to February 2009, inventory at that time, closed sales during that month, average continuous days on market, and the average sale price, or the sale price of the property if there was only one closing.

Sun Valley/Linda Mar/Pacifica CA market activity:  Except for 2 sales in February, there have been no closed sales since September 2008.  Average sale price in February 2009 was $580,000 with 4 months of inventory.

Park Pacifica/Linda Mar/Pacifica, CA market activity:  The last closed sale was in December 2008.  There is no “average” since there has only been one or no sales per month since July 2008.  Eleven months of inventory.

As of this writing there are 3 “pending show”, and 2 “pending” in these neighborhoods according to the MLS under areas #652 for Sun Valley and #653 for Park Pacifica.  One of the “pending” properties is a short sale that as of a couple days ago was not yet approved by the bank as a short sale but is expected to be approved within a few days.  This shows that the market is moving again.

 In the area you will find:

 Sanchez Adobe Park - on the National Register of Historic Sites

 Frontierland Park - a great place for a family or playgroup outing.

 Sanchez Art Center - a non-profit organization devoted to creating community through art.

 San Pedro Valley Park - terrific hiking and walking trails.

 More about PACIFICA here.

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If you were in the market to buy a $2,000,000 home home in the Bay Area, would it make a differnce to you if the monthly investment was less than $5,000 with a 30% down payment?   And I’m not just talking about the mortgage payment, I am talking about complete, tax adjusted cash flow including a 4.25% 30-year mortgage fixed for 10 years, property taxes and homeowners insurance.  Sound too good to be true?  It’s not.  And yes it beats market rental rates by thousands.

Interest-rate buydowns are one of the most effective methods for both buyers and seller to obtain what they want, which of course is value.  For the sellers, buying down an interest rate can have up to 8X the power over a price reduction, depending on the cost to buy the rate down.  For buyers, a lower rate means higher qualification and bragging rights of having the lowest mortgage rate on the planet.  In the example above:

• If the buyer was qualified up to $1.8mm at 5.5%, they are now qualified at $2mm at 4.25%
• The seller only needs to invest four points or $56,000 to move the buyer $200,000; thus a $56,000 investment saves the seller about $144,000, which is therefore about FOUR TIMES more effective than reducing price

I use the example above since I have been receiving a tremendous amount of inquiries about what’s happening at the higher end, which are those homes selling at $1.5mm+, and whether creative financing has been more common than not.  What we’re seeing is that creative financing, like interest rate buydowns and seller financing, are definitely more common at all price points.   But what’s been rather fascinating to watch is that many sellers are becoming less inclined to reduce price, despite the fact that prices are off by between 7% to 17%, depending on which city the property i located.  Yet, sellers have been very open to concessions that help them keep their price, despite the net proceeds being reduced.  One of the reasons for this, in my opinion, is the fact that buying activity has skyrocketed on the last few weeks, which is obviously encoraging to sellers.

So what’s drivng the buying activity?  Well, for starters,  it seems like many buyers properly sensed that we’ve hit the proverbial “bottom” of the real estate market, which was recently confirmed ed by the exisitng home sales figures that came out last week.  That’s right, not only are sales of both exisiting and new homes up significantly (4.7% and 5.1% respectively), the US median price and average price were both up in February over January.   Add this data to the fact that interest rates have set a new low record, plus further validation from one of most respected economic forecasting sources avalable, the UCLA forecast, that 2010 will be a year of recovery, and it becomes clearer and clearer that there couldn’t be a greater opprtunity to buy real estate.

Real estate sales held steady with an impressive number this past week in the south Santa Clara County towns of Morgan Hill, San Martin and Gilroy.  There were 53 residences that went from active to pending status as compared to last week’s 56.  Of all the sales this past week, 47 were single family homes and 6 were townhouses/condominiums.  The highest price listing sold last week was a beautiful listing at 18456 Castle Ridge Drive in Morgan Hill, priced at $1,295,000.  The lowest priced listing sold last week was a short sale condo at 7723 Murray in Gilroy priced at $89,000.  Seventy-three percent of the sales this week were priced under $500,000.

Of these sales, the list price ranges were:

Below $200,000 = 6 sales (11% of total)

$200,000 - $500,000 = 33 sales (62% of total)

$500,000 - $800,000 = 11 sales (21% of total)

$800,000 - $1,200,000 = 2 sales (4% of total)

$1,200,000+ = 1 sale (2% of total)

As of March 29, 2009, there are 509 residential (single family homes and condos) listings active on the market in Morgan Hill, San Martin and Gilroy.  There are currently 323 pending residential listings.  Therefore, 39% of the total listings are pending under contract as of this date - quite a high number.  Many of the pendings are short sales and therefore take a long time to close.  This keeps our pending percentage up artificially high. 

The truly good news is that 27 residential real estate listings closed escrow during the past week in the south county towns of Morgan Hill, San Martin and Gilroy.  Twenty-seven properties would comprise 3% of the total active and pending listings and 8% of the pending listings.  This is the largest number of closings in a single week that we have seen in a long time.

Tune in next week for an update on the number of sales in South Santa Clara County!

Actually the only way you know is when it has passed by.

A few weeks ago an agent friend and I were visiting as I fed the horses one early spring evening. She was telling me of the difficulties she was having successfully securing a home for first time buyers. This a great agent with many years of experience who was working with entry level low income buyers in Sonoma County. They were looking for a home priced under $200,000 in the Santa Rosa city limits. They were pre-approved for FHA financing with the reputable lender who had referred them to my client. They are eligible for a $10,000 down payment assistance from the city of Santa Rosa which will subsidize their down payment. Their income and credit qualified them for an FHA (Federal Housing Administration) loan. Although they qualify for the federal government first time buyer $8,000 tax credit, that cash won’t reach their pockets until after the sale has closed.

This couple was competing in many multiple offer situations with all cash investor buyers or other first time buyers such as themselves. Many properties in their price range were in such poor condition that they would not meet the strict FHA property condition guidelines, and the repairs needed would have put them beyond the couple’s limited budget. I don’t know how many offers they wrote but they were not having luck.

As my friend detailed the many days and hours she spent with this couple, she said it was seeming increasingly unlikely that they would make it into the market. I paused as I asked her, “Do you think we have hit the bottom here in Sonoma County?”. She said yes–good properties are selling extremely fast and sometimes at over asking price. I had to agree. What had seemed a consistently active but still laid back market this winter was falling into high gear as the days got longer. As some of my buyer clients and I surmised in January and February, we felt that things would be much more competitive as spring arrived, and that seems to be true. In fact, the southern part of Sonoma County, in Petaluma was already scorching hot at Christmas and New Year’s time. And that same scorch-ability (sp?) seemed to be tracking north along the 101 corridor.

The sheer activity level, the vast number of first time buyers and investor clients looking for rental property, and the declining number of new listings have all been detailed here over the previous months. In December, new sales exceeded new listings for the first time in many months, and, beginning in February it seems to us that the bottom was reached and had passed some entry level buyers by.

That said, with only 3-5 homes selling over $1 Million dollars in Sonoma County between December and February, and the mid-ranges still sluggish and all over the map, it seems that properties priced above $350,000 (+-) are still seeking equilibrium. It is a real challenge in these price ranges in communities from Healdsburg to Santa Rosa to Sebastopol to know exactly where new listings this spring and summer should be priced to attract a buyer sooner than later. Clearly there have been a number of sales in all three communities this early spring that give some hope at these price points that buyers and sellers will come to terms. It seems that the properties that are successfully selling in the mid-ranges are price 10 to 20% or so below the prices of the last couple of years. Only time will tell this spring what the market has in store for mid-tier properties and upper-end properties. But the fact that the bottom seems to have been touched on the low end, bodes well for eventual market stability.

The Sf Chronicle often paints a fairly bleak picture of the local real estate market.

However on today’s front page, the San Francisco Chronicle reports on some postive movement in the market.

The SF Chronicle reports that the Bay Area median price is around $300,000 and that with a Bay Area median income of $80,000, one can now buy a median price house.

Furthermore, 5,000 homes a month are purchased in the Bay Area.

Are we at the bottom? I do not know - but I think we are getting closer.

I do believe this is a good time for the first-time home buyer and novice investor.

Here is this week’s data for San Carlos:

9 new listings this week in San Carlos.

6 new pending sales this week in San Carlos.

71 current active listings in San Carlos.

27 current pending sales in San Carlos.

38.0% pending ratio.

San Carlos Real Estate Update 3/22/09

San Carlos update 3/15/09

San Carlos update 3/6/09

San Carlos update 2/27/09

For real-time San Carlos market updates, click here.

Here is this week’s data:

14 new listings this week in Redwood City

8 new pending sales this week in Redwood City

165 current active listings in Redwood City.

66 current pending sales in Redwood City.

40.0% pending ratio.

Redwood City Real Estate Update 3/22/09

Redwood City update 3/15/09

Redwood City update 3/6/09

Redwood City update 2/27/09

Here are this week’s numbers:

8 new listings in Mountain View this week.

6 new pending sales in Mountain View this week.

83 current available listings in Mountain View.

28 pending sales in Mountain View.

33.3% pending ratio

Moutain View Real Estate 3/22/09

Mountain View Real Estate Update 3/15/09

Mountain View Real Estate Update 3/6/09

Mountain View Real Estate Update 2/27/09