SAN FRANCISCO – (Aug. 24, 2008) –
Quite an end to the summer. The Olympics wrapped up tonight. They had it all – pageantry, triumph over adversity, the ecstasy of victory and the agony of defeat. How proud we can be of our athletes. From the Olympics to the Presidential election season – the Democratic Convention gets underway this week. This campaign should be a real barnburner. Have a feeling it will be a good ole fashioned mudslinging. When was the last time an election was decided on the issues? They keep saying that is what they are addressing, but who are they fooling? The only part of our economy that will be surging over the next few months are those that are involved in the election. Oh, almost forgot the football season begins too. We already forgot about baseball, given our local teams – maybe next season.
What does this have to do with real estate? You just don’t see many headlines on the state of the market. We have kind of taken the back seat. Guess we are getting comfortable with the current market conditions. No earth-shattering news other than everyone’s expectation that the government will be taking over Fannie and Freddie. The bright spot this past week is that the Fed is holding rates. Bernanke came out and declared that it appears inflation will ease. That, combined with oil prices dropping, calmed the waters and the market rebounded from the early week losses with a couple of positive days.August is being August. Although we had a slight uptick at the beginning of the month, the winds have died down as we return to the doldrums. Not unexpected, but I looked for a bit more momentum after a solid June and July. If the pattern holds, what it tells me is that the coming fall and the New Year will bring about the same as we experienced at the end of 2007 and so far in 2008. This is not all bad. Inventories have steadied and the lower half of the market has picked up speed. It will take another year for the financial markets to exorcise themselves out of the mess they got themselves into and to bring more liquidity into the market for jumbo loans.
Well-priced and attractively shown homes at all price ranges are selling. Currently, the REO and short-sale market is very active as first-time home buyers and investors are looking for bargains. I heard something this past week I haven’t heard of in a long time – a property listed under $100,000. At the Rohnert Park/Cotati tour meeting a one-bedroom/one-bath condo was listed for $95,000. It now may be less expensive to own than to rent
. Investment opportunities now abound and buyers are becoming aware, as much of the multiple offer activity is focused on the lower end.There are still plenty of buyers out there. Open-home activity in most areas is still brisk. The heart of the Bay Area, San Francisco and parts of the East Bay, are still seeing 20-50 groups come through open houses. Marin and the North Bay have a few homes in that category but most range between 5-15 groups.Almost all the multiple-offer activity is in San Francisco and East Bay (from Oakland to El Cerrito). The vast majority of the multiples are in the under-million-dollar price range.I believe we will see a pickup in home-sale activity after the first week of September as many sellers have been waiting to put their homes on the market for the fall. The buyers are ready, as much of the inventory on the market now is that which has been available for several months. Look for the fall bump.Watch Uncle Jay
explain the nomination process and how it has changed.Editor’s Note:Avram Goldman is the President and CEO of Pacific Union GMAC Real Estate in the San Francisco Bay Area.