San Francisco Real Estate - Residential

San Francisco Real Estate Market Update for 8/14 - 8/20/06

Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area said in his latest weekly report:

"The most significant factor affecting the market today is the media. You can’t read a newspaper, e-mail news service, watch T.V. or listen on the radio without hearing a story that the housing market is bust. All these reports tend to lump vast regional areas or the entire country together. The media has been waiting for the bubble to burst for the last four years. Journalism is supposed to be objective reporting, although currently there is a certain amount of glee in the reporters’ accounts. The only show I have watched that has given a least a balanced picture is the Nick Cavuto show. At least he had analysts, not interviewees tied to the industry, who presented both sides of the picture.

"None of us want to live in denial. Yes the market has changed, but it is not bust. Yes, in some areas prices have retreated. Is that a negative? No. Appreciation has been spectacular over the last 3 years. In fact, in most marketplaces the cumulative appreciation has been plus 50%. If it backs down 10 or 15% these are still incredible returns as real estate is a leveraged investment. Real estate has never been perceived as a short term investment, but most financial advisors will tell you real estate is a premier long term investment.

"Now back to last week’s view of the market. It is a kaleidoscope. It seems no two markets are the same. Even where we have two offices near each other the experience is different. With that said, there are a couple of trends. First agents are reporting a new wave of buyers looking for homes. These are buyers that are new to the market place. This is new demand that will be exercising itself. Secondly, more offices are reporting that inventories are decreasing. We may have reached the nadir of increasing inventories. Supplies will decline as more sellers who do not have a true need to sell, as we see more reductions that create sales and as the number of new listings hitting the market diminish inventory. As supplies come in balance with demand the market will find its equilibrium.

"Again the SF/Peninsula had the highest percentage of multiple offers, although Berkeley, Oakland/Piedmont and So Marin had strong multiple percentages too. Open house activity was all over the map---from very active to exceedingly slow. First time opens certainly had the strongest showings. A first time open home in Albany experienced 53 groups and a chic condo listing in the Gourmet Ghetto of Berkeley had 40 groups visit.

"The drivers of sales are still strategic pricing and exceptional merchandising---staging, obtaining pre-sale reports and taking care of any deferred maintenance. Those houses that came on the market overpriced are now selling when reduced to the appropriate price levels. We have even seen a few attract multiple offers. Buyers are certainly price savvy. Keen negotiation is now the key to successful transactions.

"This week’s numbers are as follows: 6 offices reported increasing inventories, 12 steady and 13 decreasing---sales activity showed 6 offices with increasing activity, 17 steady and 8 decreasing."

- Avram Goldman

* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with "weekly market report" in the subject line.

posted by SFResidence.com @ 5:35 AM