Here’s the headline: The number of sales reported in San Francisco and Peninsula MLS’s continues to drop. Here’s the rest of the story: The new pending sales each month are dropping in an almost parallel fashion relating to the number of new listings coming to market. So yes, there are fewer listings, but those that come to the market are quickly absorbed. For the most part in nearly every SF and Peninsula community, Median Sales Price is continuing to grow, albeit at a slower rate. With new sales tracking new inventory rates, prices remaining stable to increasing, and interest rates extremely attractive – Buyers who hesitate will likely find fewer choices at higher prices.
Based on what we’re seeing in the bay area Coldwell Banker offices, April is shaping up to be one of our busiest months in at least a year. After a relatively slow first quarter, here is what we’re seeing in the market today:
- Busy Open Houses: In fact our Berkeley office reported 80 visitors to one Berkeley listing and 70 visitors to one Kensington listing. The CB Berkeley manager noted, “All hosting Agents reported that the buyers were focused, enthused and most of them were just starting out in the home buying process.” San Francisco offices reports that several open houses had more than 100 people through over the weekend. Throughout the Peninsula open houses were reported as being robust and well-attended.
- Increase in Pending Sales: The Tri-Valley reports that pending sales are up 35%.
- Inventory is Stabilizing or Decreasing: Out of 27 responding offices, 13 offices reported steady inventory while four reported decreasing inventory levels, leaving just 10 markets, largely in the North Bay, East Bay and in parts of San Francisco, with an increase in inventory. This trend, can be construed as a double edge sword. Though stabilizing or decreased inventory continues to build pent-up demand, one major issue in our market is the lack of good, solid listings that buyers can act on. Let’s hope that as the weeks play out, we see a better influx of good listings.
- Increase in Multiple Offers: The trend of multiple offers is continuing to prove demand outweighs supply for prime properties in sought-after neighborhoods. Some of the most prominent areas enjoying the benefits of multiple offers are: San Francisco, reporting 15 homes with multiple offers last week; Menlo Park with six multiple offers, one of which received 10 offers; Palo Alto with four multiple offers; and several parts of our more affordable, outlying areas like Santa Rosa, with eight offers.
One challenge several of our markets are facing right now is an increase in cancelled contracts. This is largely due to financing challenges, buyer’s uncertainty, and in the case of REOs (foreclosures) and Short Sales, difficulty in negotiating and the length of time the process takes. While there can be value in REOs and bank-owned properties, buyers need to be aware of the pitfalls and challenges they will be facing when negotiating prior to making offers. Whether a property is bank-owned or not, buyers should have an updated loan approval, and have a realistic expectation of the proper loan contingency removal period.
