San Francisco Real Estate - Residential

San Francisco Real Estate Market Update for 11/13 - 11/19/06

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

"Hope everyone had their fill of turkey, pumpkin pie, and all the other family favorites. Thanksgiving is one of my favorite holidays--a time to be with family and friends and give thanks for all the abundance and great lives we live. Our homes are the filled with delicious memories past and present. We, as Realtors, help our clients create these wonderful memories. We are fortunate to have found such a rewarding profession.

"Back to the holiday market. Yes, it is like years past, as people prepare for Thanksgiving, sales activity does slow, but doesn’t stop. Open house activity with few exceptions is energetic. The Burlingame office reported one open home with over 100 buyers through and several others with 50-100 groups. The buyers are out there, they are just taking their time in finding the right home (value= correct market price+market preparedness).

"We are still seeing multiple offers, however in fewer markets. San Francisco, parts of San Mateo and northern Santa Clara counties have the majority of these transactions. Declining inventories are beginning to have an impact on the market as sellers who are frustrated with their homes not selling after many months are taking their listings off the market. This combined with fewer listings coming on the market are driving listing inventories down. This trend is shown in that 75% of our offices reported decreasing inventories and none of our offices increased. San Francisco leads the pact as their inventories begin to dip below the 3 month level and is the force behind the city having more multiple offers than any other Bay Area market place. Other markets like Burlingame and Palo Alto are experiencing the same effect. As inventories reduce, buyers will have fewer choices and this may create a greater sense of urgency.

"Those sellers that have a need to sell are more open to realistic pricing and suggestions on how to prepare their home for sale. It has taken nearly a year of a correcting market to create a sense of a new reality. This is a positive sign as our market heads toward equilibrium. Unfortunately the media continues to over-exaggerate the state of the market. Several so-called experts predicting doom and gloom. This is par for the course, as many of them have been prognosticating about the bubble for more than 4 years. The market has finally slowed as compared to the go-go years of 2004 and 2005, but nowhere near the hard hit markets of the early 80’s and 90’s. We will not see the double digit appreciation of the last several years; however we will not see a steep fall off of prices. A few markets will continue to appreciate (in single digits), some will stay flat and a few will lose some of the appreciation of past markets.

"As stated in a previous report our open sales in October were down 14% from last year. That is a significant drop from a Bay Area wide average of 22% off in sales for the first 9 months of the year. If November follows that trend this could be what some economists have called the “soft landing”.

"A number of offices are seeing steady activity as buyers are looking for the Holiday gift of a home. Activity should pick up from now until mid-December with a typical slowing toward the holidays. Interest rates appear to be stable---still at historic lows. However, there may be a chance they could drop a bit lower if the economy begins to slow. Bottom line is the Bay Area is still one of the most desirable places to live in the world, our local economy is still creating jobs and demand is still active. All these factors bode well for a healthy balanced market----one where both buyers and sellers are on equal footing with each having to give a little.

"Here are the numbers for the week of Nov. 13th-19th: 7 offices reported steady inventories and 21had decreasing---3 offices showed increasing activity, 15 steady and 10 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 @ 9:35 AM