San Francisco Real Estate - Residential

San Francisco Real Estate Market Update for 8/21 - 8/27/06

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

"Now that we are through two-thirds of the year what does the market look like? Let’s start with a few trends. For the first time this year four counties experienced declining inventories on a month over month basis---Sonoma, Marin, San Francisco and San Mateo. For San Mateo county it was the second month in a row. For the others it was the first time since the end of last year that inventories did not grow. Inventories for the remaining counties grew at a much slower rate than previous months-----most growing at less than 3%. Only Contra Costa was above that at 5%. Inventories are still up over last year anywhere from a low of 20% in San Mateo to 70% in Solano County-----Marin 23%, SF 40%, Santa Clara 40%, Sonoma 47%, Contra Costa 47%, Monterey Peninsula 56%, Napa 57% and Alameda 69%. Please keep in mind that last years’ inventories were historically low.

"You would think with inventories up prices would go in the other direction. However this is not the case. In actuality median prices in four counties were up, 3 flat and only 2 down comparing closed sales median price August 2006 vs. 2005. Marin county led up by + 7.5%, Monterey Peninsula + 6.8%, Napa +5%, Santa Clara +3%, Contra Costa +2.5%, Alameda flat, SF flat, Solano flat, San Mateo -4%, Sonoma -5%. Keep in mind this is August compared with August and that this is the entire market including both single family homes and condos. What this reflects is that the properties that are priced most competitively and that are presented most attractively are selling and those that aren’t are staying on the market for a number of months. Over the last two months expired listings have increased significantly.

"We are still experiencing a good number of multiples on the SF Peninsula. Open sales were only down 5% in SF and 14% down in San Mateo counties August 2005 vs August 2006. As one buyer said to a manager in San Francisco after losing out in a multiple offer situation “I thought those days were over”. They are over in many markets, but not in all as a fixer in San Francisco went with 9 offers. I believe what these numbers reflect is that the best properties in terms of price and condition (excluding fixer properties that are priced well under market reflecting their condition) sell expeditiously. Today we are seeing many more price reductions. Sellers have realized that prices are not continuing to go up at high double digit rates, although they certainly are not taking large declines either. They have just stabilized at last years’ levels or adjusting downward giving back a small amount of the massive gains over the last three years.

"Open house activity for the most part is still active, particularly with first time opens. There is a whole new crop of buyers entering the house hunting search as interest rates continue to decline. We are expecting a number of attractive new listings coming on after Labor Day. The Fall selling season is about to begin. Many of the buyers will be looking to be in their homes by the holidays. Seasonally we expect sales to increase from July and August numbers. I believe many sellers are now in tune with a more normal market and have a better understanding of today’s market conditions. On the other hand buyers realize good properties do not remain on the market long. This combined with decreasing interest rates and declining inventories will give buyers reason to move more quickly, especially in the most desirous areas and price ranges. In those markets with larger inventory supplies it will take some time before there is a sense of urgency.

"Here are the numbers for the week of August 21-27: 3 offices reported increasing inventories, 14 steady and 11 decreasing----19 offices experienced steady sales and 9 saw decreasing sales."

- 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 @ 8:37 AM