Although rates are low right now, the current economic crisis has caused many lenders to reduce the amount of loans they approve. If you are ready to save on your mortgage payment each month and are ready to refinance, you must get your facts right so you are ready to go.

First you need to look at your loan-to-value ratio. In a no-cash refinancing, you may be able to borrow as much as 95% of your home’s value. However, if in these tough times, your San Mateo home’s value has fallen below the amount of your existing mortgage balance, you may not be able to refinance. Unfortunately this has been the case for too many San Mateo homeowners.

The main advantage to refinancing to a new lower interest rate is saving on your monthly mortgage payment. This is normally the reason most people choose to refinance their home mortgage in San Mateo. Do keep in mind that while it will save you monthly, there are still costs involved in refinancing such as closing costs, points and possible appraisal and attorney fees.

Shop around and do your research. You want to find the best financing interest rate possible in San Mateo. Typically San Mateo Community Banks and Credit Unions are more consumer-friendly and charge lower interest rates.

Make sure to also compare points versus no points before you refinance. Watch out for embedded points that could be included in the closing costs. Some lenders have been known to include the points in the closing costs without necessarily telling the buyer that these costs are points.

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 Current homeowners can now receive a $6,500 tax credit, while first-time buyers are still eligible to receive an $8,000 credit. 
But act soon, the opportunity of a lifetime ends April 30th, 2010.

First time Home Buyer Credit has now changed 3 times.  The biggest change came in December 2009:
Extends the First-Time Home Buyer Tax Credit of up to $8000 to first-time home buyers until April 30, 2010 under the Binding Contract Rule-“as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until June 30, 2010 to close.
Who Qualifies-First-time homebuyers and current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five (5) consecutive years within the last eight years.
Increased Buyer Income-Under the Extended Home Buyer Tax Credit-effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000-may receive the maximum tax credit.
Price-Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

HURRY IF YOU’RE THINKING OF PURCHASING OR YOU’LL LOOSE OUT ON FREE MONEY!

“The FHA announced changes to its guidelines yesterday. It will raise the minimum down payment required for borrowers with credit rating scores below 580 to 10%, while the down payment for higher-ranked borrowers would stay at 3.5%. The up-front MI premium is also going from 1.75% to 2.25%. HUD is seeking congressional approval to allow it to raise annual mortgage insurance premiums — which are paid out by the borrower over the life of the loan — above the 0.55 percent maximum. Lastly, the FHA also said it was cutting the amount of aid sellers could provide buyers to 3 percent of the purchase price from 6 percent; a move it said could help lessen incentives to inflate appraised home values.”

“There’s no question that the government’s first-time homebuyer tax credit has spurred a significant amount of sales this year.  Latest estimates show that some 400,000 additional sales occurred this year due to the first time home buyer tax credit, which is about 8% of all sales this year.

In the latest news, The Senate has reached a compromise on extending and expanding the $8,000 tax credit for first-time home buyers.  While its passage remains uncertain, this plan would extend the existing credit for first-time homebuyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners.  The reduced credit would be available to  homeowners who have been in their current residence for a consecutive five-year period in the past eight years.  Lawmakers in Washington also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000.  Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, said the sources. The measure still faces votes in the full Senate and the House.  The U.S. Senate won’t vote until next week at the earliest. ” 

This week, Business Week reported “The broad improvement in the housing indicators in recent months leaves no doubt that the long-awaited housing recovery is finally under way.”  The article went on to report:  “Policy alone cannot explain the 24% gain in existing home sales since January, nor the 22% increase in new-home purchases, the 40% rise in single-family housing starts, and the recent upturn in home prices. The primary driver is historically high affordability. Fixed 30-year mortgage rates are at 5%, a multi-decade low, and prices have plunged a total of 30% since May 2006, based on the Standard & Poor’s Case-Shiller Home Price Index. By that price gauge, homes are well undervalued relative to both rents and aftertax income.”

Here is what is happening in San Mateo County

• Peninsula—Half Moon Bay reported it is sensing a slow down with less inventory. MLS tour sheet reflects all the retours, many with price reductions and few new listings.  Menlo Park El Camino reported a bit of a sea change in the market-not much new inventory, only three new listings on tour this week which is very, very low.  Menlo Park Santa Cruz Avenue reported very slow open house activity this last week.  Many listings are receiving price reductions as new inventory is limited.  Pricing is critical.  52% of the listings on the Menlo Park Atherton Broker tour have price reductions and 82% are retours.  Palo Alto Downtown reported the market is generally slow.  We feel like the holiday season has started early.  The activity is reflective of that.  Sales are down in our area.  San Mateo reported a look at its pending sales (SFR) of its six main communities; here is a breakdown of the total and the percentage of short sales plus REOs.  Belmont 31 pending sales (35% SS/REO), Burlingame 27 pending sales (33% SS/REO), Foster city 12 pending sales (18% SS/REO), Hillsborough 22 pending sales (23% SS/REO), Redwood shores 10 pending sales (10% SS/REO), San Mateo 109 pending sales (52% SS/REO).  Most of San Mateo SS/REO is in entry level areas.

Active Listings-121 Single Family Homes. 52 listed over 1 Million, 15 listed at $900,000 to 1 Million.
Pending Sales-36 with 14 listed under $700,000 and 10 listed over 1Million
99 Homes Closed since January 1, 2009 with only 16 that closed over $1,000,000 and 10 between $900,000 and 1 Million.

PACIFICA, CALIFORNIA
With YTD sales of 196 and active listing at 59, Pacifica continues to be a Seller’s market.

Active Listings-59 Single Family Homes. 11 listed at $900,000 or higher and 21 listed under $600,000.
Pending Sales-48 Single Family Homes with 30 listed under $600,000 and 1 over $900,000. 6 Properties went Sale Pending this week with under $700,000
196 Closed Sales since January 1, 2009 with 8 that were listed for over $900,000. 79 sales were from homes listed at $500,000 or less. 2 new sales this week.

ABSORPTION RATE
Absorption Rate is the number of months it takes to sell the current inventory at the present rate of sales.
6 months supply is a balanced market.
Less than 6 months supply is a Sellers market.
More than 6 months supply is a Buyers market

While Congress continues to debate the issue, we as Realtors, are calling for support for the expansion of the tax credit from first-time buyers to all homebuyers, increasing the maximum amount of the tax credit from $8,000 to $15,000, eliminating the existing income caps for eligibility purposes and extending this homebuyer tax credit for one year from the date of enactment.
We believe that stimulating demand for housing—particularly in the repeat buyer market—is the most effective way for Congress to help lead the U.S. economy into a recovery and back on the path to growth. And we have to remember that it’s not just the entry level that is affected. The move-up buyer begins the process in building more demand in our mid-tier price points and ultimately our higher-end markets. Timing is critical and we hope that Congress is listening.

While the clock ticks and we await the results of the debate on Capitol Hill, let’s take a look at this week in real estate:

• East Bay—Berkeley reports a rather slow start to October, compared to our previous months. Anything priced $400-750k is getting lots of attention. Open houses were competing with a popular local street fair, but still garnered 45 to 30 groups at the newer listings. Castro Valley reports new construction in our area is looking up. Pricing seems to have normalized for new construction. Otherwise, we are still seeing lots of short sales. REOs are trickling through as well. We are starting to see the Castro Valley home median price range pick up somewhat. Fremont reports the market is typical for the Fall months as people prepare for school and holidays. REO properties are still hot, but have slowed a little too. Livermore reported during this past week active listings and total pending sales remained stable in both Livermore and Pleasanton. In Dublin, this past week, there was more than a 20% increase in listings, and a decline of 10% in total pending sales. $500,000 and below still remains very “Hot” with multiple offers. Walnut Creek reports very low inventory with multiple offers on almost every sale. Even with multiple offers, properties in the $600,000 – $1,000,000 range are not selling much over asking. Buyers are still very cautious, some not quite convinced that the market has hit “bottom.” REOs are barely trickling in.
• Monterey County—Things seem to be slowing down just a bit, though we have had some high-end sales of late, as the inventory of REOs is dwindling and the expected onslaught of new REOs has not yet materialized. Great mortgage rates we’re seeing right now may encourage another surge of sales.
• North Bay—The San Rafael office reports the under $300K market in San Rafael has slowed due to lack of inventory. In Novato the $300-600K price point is steady and the under 300K price point holding steady over the past few months. Cash is still king in bidding wars. Southern Marin reports listings are slowing down considerably. Sebastopol reports buyers are kicking tires at open houses. Listing activity is very slow.
• Peninsula—Burlingame reports appraisal problems are becoming more common and buyers demands are becoming excessive. The Agents are working so hard to hold their transactions together. The number of sales have picked up however and hopes are high for a strong Q4 finish. Half Moon Bay reports the price point is the only thing that matters in receiving offers on listings. Over the $1m mark is still very quiet. Menlo Park El Camino reports buyers are absolutely out there but come out of the bushes only when lured by a great house at a great price. We had nine offers, 25 offers, 6 offers – where are the 8 and 24 and 5 buyers that didn’t get the house? They will buy when the right house gets to the current market price. Redwood City/San Carlos reports one of the multiple offers was our listing and it was priced at $775,000—in San Carlos. There were five offers and it went $55,000 over list price. Three out of the five offers were very close. Moods seem positive. Woodside reported buyers are still on the fence for anything over $4 million. Almost nothing will lure them out. Under that level, it is price, price, price.
• San Francisco—Lombard reported truism reinforced this week: “Price it right, right out of the gate.” Buyers are writing right away if they see value and sense competition. But not returning to see the stale listings with the multiple mini reductions. Many sellers are still not getting this. Market Street reported that there was a lot to do around San Francisco over the weekend so open houses were a little less well attended than past weekends. However, those who attended were especially eager to buy before the end of the year. Van Ness reported both large and small deals are moving well. Activity level is picking up again.
• Santa Cruz County—The lower end market below $600K continues to dominate the lion’s share of sales. Agents are working really hard to keep deals moving forward and at times buyers continued interest in the property if escrows drag on. The Agents are still doing a lot of short sales, some taking months and months. The REO market especially south County – Watsonville – is almost completely dried up and those few actives are getting multiple offers – with cash buyers winning the bids.
• Silicon Valley—Cupertino reports we typically have a lot more sales than listings. Last week the numbers were just about even. Open house traffic was insane! Los Altos reports buyers are trying to find an affordable home in most cases and are competing in multiple offers with cash investors. Mid tier buyers have more time to consider and the upper end is slow. San Jose Almaden reports the market is tapering off a bit on the sales now, not by much but a little. Open houses remain very busy still. With rates as good as they are and inventory shrinking and tax credits ending I would expect more sales. Perhaps the upcoming weeks will prove this to be true. All sales made this week were multiple offers. Willow Glen reports multiple offers are still the norm and many of the Agents in this office have clients that are losing out. Inventory is somewhat down as well.
• South County—Morgan Hill reports each local market is unique and comes with its own set of challenges. Here in South County offerings on the MLS range from one-bedroom condos to huge estates on acreage. We have horse properties, PUDs, single-family developments and attached housing and everything in between. The buying public, for the last six months, has zeroed in on entry level housing (those homes listed under $500,000). That segment of the market is thriving.

MONDAY MORNING MARKET UPDATE WILL RESUME NEXT WEEK

“The patient is out of intensive care, but still has a very long road ahead to a clean bill of health.” 

by Rick Turley, Bay Area President, Coldwell Banker Residential Brokerage

Those were the words last week from Fannie Mae Chief Executive Officer Michael Williams.  The CEO went on to say, “Anyone looking objectively at the economy and the housing market sees hope.”

Another good solid indicator of what I’ve been saying in my weekly updates.  The U.S. housing market still has a long road ahead but we are making some definite moves towards a housing recovery.  So what’s the challenge?  Well for starters, rising unemployment numbers aren’t helping.  The United States Department of Labor reported in its September 4 Economic Situation Summary that the number of unemployed persons increased by 466,000 to 14.9 million and the unemployment rate rose by 0.3 percentage point to 9.7%.  Just to give you an idea, since the recession began in December 2007, the number of unemployed persons has risen by 7.4 million, and the unemployment rate has grown by 4.8 percentage points.

We also need to couple that with the challenges in the mortgage industry.  Bloomberg reported, “The mortgage market is still dependent on government-affiliated programs, with private banks providing just 10 percent of loan liquidity, down from about 60 percent in 2006.  Fannie Mae and Freddie Mac are responsible for about 70 percent of all new mortgages, while the Federal Housing Administration accounts for about 20 percent.”

Before we can be truly reformed, we need to get into a position where there is more of a balance between private bank loans and Fannie Mae and Freddie Mac loans.  In all actuality, we probably won’t see that for some time.

Having said that, U.S. mortgage applications surged last week with demanding rising to its highest level since late-May as consumers sought to take advantage of the lowest interest rates in months, according to Reuters.

The Reuters article reported, “While home refinancing loans dominated demand, the appetite for applications to buy a home, a tentative early indicator of sales, hit its highest level since early January.  The overall trend bodes well for the hard-hit U.S. housing market, which has been showing signs of stabilization.”

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications which includes both purchase and refinance loans, for the week ended September 4 increased 17.0 percent to 648.3, the highest level since the week ended May 29.

These are all very positive indicators that showcase that we are on the right track…it’ll probably be a slow track…but we’re on the right one.

Now let’s take a look at this week in real estate:

• East  Bay—Berkeley reported a slow week compared to our brisk start to September.  Castro Valley reported our local micromarket is full of challenges.  Not enough inventory, hungry buyers with lots of cash, Agents who must navigate the challenges of appraisal problems, short sale bank frustrations and stiff competition for limited inventory.  We are seeing more listings out there.  They are selling quick, though, often within a week or so of listing.  Danville reported a spurt of activity the first week of September and then it got quiet.  Inventory and sales activity is down both in our office and in our service area.  Fremont reported it seems that the recent Wall Street financial information has made buyers more comfortable and motivated to purchase now that prices are starting to increase and the first time buyer program is ending in November which is another motivator.  Walnut Creek reported sales activity has really slowed down.  Fewer REOs coming on the market though there is an increase of short sale listings.  Multiple offers on most every sale. Orinda reports lower attendance at recent open houses, but the Buyers who do show up are more serious and ready to make offers.
• Monterey County—REOs and Short Sales are continuing on at steady pace, but we are seeing more “traditional” sales than over summer.  We’re getting lower on inventory in the hot REO market of Seaside; however, we keep hearing that the release of a large number of REOs there is imminent.  With Labor Day holiday last week, our closings were weak, though had one over $1 million and one over $2 million, but had good week for new escrows.
• North Bay—Petaluma reported lots of movement in the $500,000 and above range. Under $300,000 continues to be a frenzy with double digit multiple offers. Cash is king.  Santa Rosa concurred noting, too, that cash was king though the Sonoma County market did also note that open houses weren’t as well attended last week as they have been in recent weeks.  Sebastopol reported lots of folks out despite the weather.  Good attendance in all price ranges but most offers remain in the low end.  San Rafael reported the market has slowed in the past few weeks.  Inventory is still low.  78 people came through a new listing held open for the first time in Novato in the mid $700s.  An offer came in the next day.  Greenbrae reported (San Rafael & Corte Madera) had two $1 mil properties come on for the first time last week and had multiple offers by Monday.  Activity not as robust as we hoped but lots of new properties coming on the market so perhaps buyers need a chance to digest the new investors.
• Peninsula—Menlo Park El Camino reports Agents are busy.  The job of being a real estate Agent right now is very hard but the Agents see some deals are being made.  Big loans are still like apparitions.  Menlo Park Santa Cruz Avenue reported good activity following the Labor Day Holiday.  One Hillsborough listing ($6,500,000) was ratified after one week on the market!  Redwood City-San Carlos reported open house activity has definitely picked up.  Buyers seem more ready to make offers.  Woodside reported Woodside and Portola Valley are extremely difficult markets (especially Woodside).  The price point is so high that buyers will not buy and those who are selling are only selling because they have to.  EX: just closed a house at $5.6 mil that the owners paid $13 million for in yr. 2000.  Very few homes on the market representative of the usual Woodside market.
• San Francisco—Lombard reported the number of houses going pending look OK but mostly entry level prices. Labor Day listing surge is happening in the City: 165 new listings entered. The lower the price the more offers. One REO we got in Hayward yielded 33 offers.  The Market Street office reported open house activity was brisk last weekend with 60 groups going through a listing in District 5.  2/3 of the ratified offers were for new construction where good deals are still to be had.  This week the only multiple offers came in on a short sale.  Prices varied from $300K to $940K.  The Noriega office reported Agent activities are high but it’s tough to get deals ratified.  Even after deals are ratified, it takes a lot of work and negotiations afterward to keep the deal alive.
• Santa Cruz—August was slower than 2008 in terms of number of sales and overall prices have dropped within the office about $100K since last year at this time.  Open house activity is still good and there continues to be a pent up demand for properties as the inventory levels remain low.
• Silicon Valley—Cupertino reported it’s busy and an ever increasing challenge getting those deals closed.   Los Altos reported activity is picking up as we head into the normal fall home buying season.   San Jose Willow Glen reported things are slowing up a bit. Open houses still draw a lot of crowds. A couple of the sales that have been turned in, have sold over the asking and it appears that the listing prices were set low to attract buyers.  Saratoga reported  a steady increase in average sales prices over the last six months. Instead of the sales consisting of REOs and Short Sales we’re seeing brisk sales activity up to two million.
• South County—Hollister reported we are seeing great opportunities in establishing client relationships with office floor calls and walk ins this past week.  Inventory is still low and first time homebuyers are struggling trying to secure a contract.  Some REO Listings have received up to 20 offers.  Morgan Hill reported the South County market continues its same scenario–lots of potential buyers and very low inventory.  This week the number of total listings in all of Morgan Hill fell to 125 units–an all time low.  Employing simple “supply and demand” economics, this situation should result in prices beginning to rise–though none of us has witnessed this phenomenon yet.

ABSORPTION RATE
Absorption Rate is the number of months it takes to sell the current inventory at the present rate of sales.
6 months supply is a blanaced market.  Less than 6 months supply is a Sellers market.
More than 6 months supply is a Buyers market.
Still a Buyers Market – HALF MOON BAY through MONTARA, CALIFORNIA with 17.5 months supply.

Active Listings are back down this week.  Still, the number of active listings has not been at this level since the first of the year.  This is a very encouraging sign for Sellers. 55 of the listings are listed at over 1 Million. 16 between $999-$900,000 and 37 homes listed between $500,000 and $800,000.  Of the 8 new Pending Sales this week, 3 were listed between $975-$995,000.  Very encouraging for the end of August.

Active Listings-130  Single Family Homes with 55  listed at $1 Million or more.
6 New Listings this week with 3 under $800,000.

Pending Sales-38 Single Family Homes with 8 listed for under $500,000 and 5 over 1 Million.  The bulk of the pendings/17, were listed between $500-800,000.  8 Properties went Sale Pending this week.

65 Homes Closed since January 1, 2009 with only 11 that closed over $1,000,000, 8 between $900,000-$1 Million, and 29 that were listed under $700,000. 5 homes closed this week. 4 were listed between $600-$699,00 and closed within 5% of the list price.  1 home closed over 1M and was listed at $1.5Million and closed at $1,275,000.

 
Sellers Market with few Homes for Sale – PACIFICA, CALIFORNIA with 1.58 months supply.

This week, 6 new listings with one listed over 1Million and 3 listed between $500-$600,000.    Of the 4 new pending sales, 2 were listed under $600,00.  Statistics remain consistent another week with the current number of Active Listings divided by the average number of homes sold YTD, there is 1.58 months of inventory of Active listings. Sales look like they are going to slow considerably unless more listings in the lower price ranges come on the market.  Most of the short sales have been sold. 

Active Listings-40 Single Family Homes.  9 listed at $800,000 or higher and 7  listed under $600,000. 6 new listings this week.
 
Pending Sales-51 Single Family Homes with 2 listed over $1,000,000 and 21 listed under $500,000.  
4 Properties went Sale Pending this week with 2 listed under $600,000.

158 Closed Sales since January 1, 2009 with 5 that were listed for over 1 Million. 68 sales were from homes listed at $500,000 or less. 68 sales were from homes listed between $500,000-800,000.  8 homes closed this week.

Considering the decreasing inventory, few new listings and higher prices for those remaining active listings, we expect to see the sales activity continue to slow down.

Generally speaking the Bay Area real estate market has seen a bit of a bounce this summer with sales increasing in all categories—from the entry level homes and condos to the high-end market. 

National figures showed June with an 11% increase in home sales and the Bay Area seemed to share that trend with July sales up 15% over July 2008.  As the number of sold units continues an upward trend, price recovery is a bit of a mixed bag depending on the area. The entry level median price is increasing in all counties, due to very little supply against a healthy demand.  The just-under, just-over $1M mark seems to be holding its own, with a few multiple offers out there for the right property in a sought-after community. The higher end properties over $2M have, in the past 30 days, seen more activity than at any time this year, but price remains a critical factor as to which properties seeing this activity actually go into contract.  It seems the higher the price-point, the more critical it is for a very attractive list price.  Sellers who are selling are very realistic about marketing price, and Buyers who are buying are recognizing good value when they see it, and are taking action swiftly. For cash buyers or those with large down payments, this could be a great time to pick up a bargain in the luxury home market. 

This week the National Association of Realtors released its monthly existing home sales report (http://www.realtor.org/press_room/news_releases/2009/08/strong_uptrend?LID=RONav0021) noting “For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors®.”  The report went on to note, “Existing home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted rate of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008.  The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.” 

Lawrence Yun, NAR chief economist, said he was encouraged.  “The housing market has decisively turned for the better.  A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said. Ultimately these are all very positive signs for our market and are a strong sign that we are moving in the right direction towards a housing recovery.

A few other interesting articles of note for the week: 

• Home Prices On An Upswing In The Second Quarter Of 2009 According To The S&P/Case-Shiller Home Price Indices; Case-Shiller
• New Home Sales Blast Past Expectations; CNNMoney.com
• The Housing Market: Has It Turned the Corner?; TIME Magazine
• Mortgage Applications Increase In Latest MBA Weekly Survey; Mortgage Bankers Association
• Home Market Shows Signs of Life as Declines Slow; Bloomberg 

Now let’s take a look at this week in real estate: 

• East  Bay—Berkeley reports some buyers are still not prepared to compete in a multiple offer situation and may not believe this market until they’ve lost out on a few properties.  Castro Valley reports there is very limited inventory in our local market right now.  We had nine homes on Brokers tour during the course of this week, and Agents are hungry for homes to sell.  We had a few properties that hit the market this week and went pending in a matter of days.  Multiples, multiples, multiples.  There is an increase in the number of buyers calling our office looking for agents to help them buy.  We have gotten a lot more floor activity in the past week, despite the drop off in activity due to kids going back to school.  Danville reports all market activity is strong.  Lack of inventory is holding down sales.  Prices at the bottom are firm – prices at the top are still correcting.  Oakland reported we had three nice sales averaging $2 million for the week.  One of them was the property that we had marketed for a year and a half.  The buyer came to an open house (we had over 100 groups through) and bought it all cash for over $2 million dollars and a very quick close.  Everyone feels there is momentum in the market.  We had more open houses last weekend than previous weekends  and they are well attended
• Monterey County—The steady beat of listings and escrows continues the Monterey Peninsula.  We are seeing sales in all price ranges, except the very top over $10 million and those are slow even in the best of times.  One third of our new escrows last week were for properties priced between $1.2 million and $1.9 million.  We see sales in that $1-2 million range really picking up of late. 
• North Bay—San Rafael reported cash is king when it comes to winning the multiple offer game in the entry level market.  Nearby Southern Marin reported every deal requires heavy negotiating and seller concessions and last minute delays in removing loan contingencies.  Sebastopol noted open houses remain well attended. Every escrow has its own special demands, lender conditions, low appraisals, and Agents on the other side that won’t play nice.  Santa Rosa noted REO listings are starting to appear in increasing numbers. A noticeable increase in open escrows from $500,000-$900,000.
• Peninsula—Burlingame noted that activity has picked up a lot, many buyers are getting involved in multiple offers and are beginning to understand that the market has changed and they need to step up to the plate when that perfect property comes along.  Half Moon Bay reported activity has picked up on the coast as seller’s are pricing their properties to sell within one or two weeks, along with the moving of some stagnate listings requiring many counter offers.  Menlo Park Santa Cruz Avenue reported two homes sold last week with multiple offers however neither went over the list price. Open houses were busy averaging 20-25 groups.  Palo Alto reported Inventory is slow to come on the market. Listings and sales are seasonally slow. Looking forward to a brisk after Labor Day market.  San Mateo reported there has been some more intense movement in the $1.2-1.5 range – Hooray!!!
• San Francisco—The Lombard office reported a slow week except for the entry level and REO markets which remain hot, with multiple offers, including a surprising number of all cash. Major price reductions on the upper-end bringing mixed results. More hints of a listing surge post Labor Day.  The Market Street office reported lots of activity the last two weeks.  Back-up offers being elevated, properties that have been on the market for a while getting into contract, and buyers who want to get in to a home before prices go up and be assured of their $8,000first-time home buyer credit. There has been more activity than a normal August with fewer agents in the office taking time off.
• Santa Cruz County—In last four months, the median price in the county has risen 23% or about $100,000 which is a very good sign.  Prices are still down about 14% from where they were a year ago at this time but it is definitely going in the right direction.  Inventory levels are down from a year ago with a 5.5 month supply of single family homes on the market as compared to 8.5 month supply in July/August of last year. Overall, there is improvement which is wonderful!
• Silicon Valley—San Jose Almaden reported a hot low end market continues to fuel sales.  Highest sale last week was $550,000.  Two-thirds of the sales were under $300,000!  The Willow Glen office reported we are seeing a lot more multiple offers on our listings.  Saratoga reported our Previews (luxury end) market is still slow.  REOs and short sales still dominate the market; however there is a slow steady increase in our office’s average sales price. I think this is due to a much healthier market in the $750,000 to $2,000,000 range.
• South County—Sale prices are exceeding list prices on sales under $400K due to lack of inventory.  On REO listings it is typical to have 5-10 multiple offers in that price range. Contingency time frames are usually shortened to strengthen the offer.  Short sale listings are increasing with back up offers in place.  Open houses are well attended and floor calls have been on the rise!  Morgan Hill reported the market remains unchanged for the past several weeks.  There is great demand for entry level homes–multiple offers happen and then there is just one successful buyer. 

Several offices are talking about a post Labor Day surge in new listings.  The Buyer appetite seems to be there, as long as the listings are priced right.  Typically August is the slowest of summer months with vacations taking priority, however this month has seen the best Buyer activity all year long for many offices.

 Please note that next week we’ll take a brief hiatus from Weekly Market Watch for the Labor Day weekend, but we will return the following week. 

Until then,

Make it a good one,

Rick 

Rick Turley

President, San Francisco Bay Area

Coldwell Banker Residential Brokerage

ABSORPTION RATE
Absorption Rate is the number of months it takes to sell the current inventory at the present rate of sales.
6 months supply is a blanaced market.  Less than 6 months supply is a Sellers market.
More than 6 months supply is a Buyers market.
Still a Buyers Market – HALF MOON BAY through MONTARA, CALIFORNIA with 17.5 months supply.

Active Listings continue to stay high and inched up this week again for the second week.  Still, the number of active listings has not been at this level since the first of the year.  This is a very encouraging sign for Sellers. 55 of the listings are listed at over 1 Million. 18 between $999-$900,000 and 27 homes listed between $500,000 and $800,000.  Of the 3 new Pending Sales again this week, all were listed at $769,000 or less.  This weeks activity was similar to last week and normal for the end of August.

Active Listings-133  Single Family Homes with 55  listed at $1 Million or more.
6 New Listings this week with 3 over $900,000.

Pending Sales-36 Single Family Homes with 8 listed for under $500,000 and 6 over 1 Million.  The bulk of the pendings/12, were listed between $500-700,000.  3 Properties went Sale Pending this week.

60 Homes Closed since January 1, 2009 with only 10 that closed over $1,000,000, 13 between $800,000-$999,000 and 24 that were listed under $700,000.  2 homes closed this week. 

 
Sellers Market with few Homes for Sale – PACIFICA, CALIFORNIA with 1.58 months supply.

This week, all 8 new listings were priced between $700-788,000.    The 5 new pending sales this week were for properties listed between $525 -$590,000.  Statistics remain consistent another week with the current number of Active Listings divided by the average number of homes sold YTD, there is 1.58 months of inventory of Active listings. Sales look like they are going to slow considerably unless more listings in the lower price ranges come on the market.  Most of the short sales have been sold. 

Active Listings-37 Single Family Homes.  4 listed at $819,000 or higher and 7  listed under $600,000. 8 new listings this week.
 
Pending Sales-58 Single Family Homes with 4 listed over $900,000 and 23 listed under $500,000.  
5 Properties went Sale Pending this week listed from $525,000 – $590,000.

150 Closed Sales since January 1, 2009 with 5 that were listed for over 1 Million. 66 sales were from homes listed at $500,000 or less. 

Considering the decreasing inventory, few new listings and higher prices for those remaining active listings, we expect to see the sales activity continue to slow down.