With the Economic Stabilization Act now passed, let’s take a look at last week in real estate:
- East Bay—Castro Valley—which for weeks has been our bright spot of activity—saw a bit of a slowdown this week due to the concerns on Wall Street. We still have plenty of deals thanks to REOs but buyers are nervous. It seems buyers really need the counsel of their real estate Agents right now so they may navigate these murky waters. Our Danville office is reporting quite the contrary, however, noting that business in the San Ramon Valley is steady and that deals are coming together. Buyers seem to be most active in the REO arena, as they search for what they believe to be the best deals. Please do keep in mind that not all bank-owned properties are created equal and not all are guaranteed deals. Overall, the East Bay continues to thrive thanks to REOs and the remainder of the markets are quiet. We should see those markets pick up as we continue to eliminate our REO inventory.
- Monterey County—CB’s Monterey County offices are noting some positive news, even in the wake of a tumultuous week on Wall Street, noting “Even though this week has been a tumultuous one in the financial world nationally, it amazes me that our Sales Associates are still busy writing offers throughout the week.”
- North Bay—Despite the economic hardships of the week, our North Bay offices reporting that things seem to be moving pretty steadily. Our Greenbrae office noted, “The next few weeks look promising for buyers and sellers.” Our San Rafael office noted that “we are seeing more all cash buyers coming into the market.” Our Sonoma County offices continue to enjoy a lot of activity thanks to bank-owned properties and our Petaluma office is noting that short sales are becoming increasingly easier to deal with as negotiating with banks becomes more positive.
- Peninsula—People seem to be unsure during these uncertain economic times but savvy buyers are contacting their Agents and many feel now is the perfect time to make an offer. We are starting to see more upper-end listings come on the market which is a good thing as our upper-tier has been plagued by low inventory. Half Moon Bay is reporting that listings are up at the highest level in several years and at the same time there are at least six distressed properties on the market. According to our Half Moon Bay Manager, “This is the best time to buy on the coast in years.” Our Menlo Park El Camino office called this market “A tale of two buyers…Confident and not confident.” It’s business as usual for those who have confidence and those who don’t may miss out on one of the best buyer’s markets in generations.
- San Francisco—My own office is seeing more listings and navigating through more obstacles in transactions. CB’s Market Street office noted that some buyers backed off this week due to the issues in the finance sector but now that things have worked themselves out we expect them to return. Our Van Ness office noted that we remain on a reasonable pace for the current climate with five out of nine deals this week under $900,000 and one large sale for the week.
- Silicon Valley—Consumer confidence seemed to be hindered this week as many of our Silicon Valley consumers awaited news of today’s act. In doing so, this week floor calls slowed a bit as did open house activity. But I believe now that we can all get off the couch and away from our TVs (awaiting the act’s approval), we can get back to work and we’ll start to see more deals closing.
Overall I believe the Emergency Economic Stabilization Act of 2008 puts us on the right track. No, it isn’t an overnight answer, but I believe the efforts of the new legislation point us in the right direction and place us on the right path towards stability, and eventually long-term economic growth.
The government’s resolve to take action that is focused on fixing the credit crisis is to be commended, particularly because these major moves to add greater liquidity to the market will have a beneficial effect on homebuyers/sellers and the real estate industry as well. Keep in mind that housing represents 20 percent of our GDP, and as such it is a critical piece of our national economy.
It seems nothing in the financial markets is very predictable in the short-run any more, but next week should seem a bit more stable and calm than last. Until next week…
