Bay Area Real Estate Market Update Nov 2008

Silicon Valley Weekly Market Update from Monica Manocha @ Coldwell Banker

What we are enduring is no longer a national economic crisis. We are full swing in a global financial crisis that has affected at least 11 countries around the world. Brazil, China, Germany, Iceland, India, Japan, Russia, Saudi Arabia, South Africa and the United Kingdom are now all reporting economic declines and many experts agree that their woes are a direct result of the U.S. housing decline.
World leaders gathered in Washington on Friday to talk about what is needed to get the global economy back on track. Leaders from the Group of 20, which includes the United States, members of the European Union, China, Saudi Arabia and Brazil, agreed to the summit late last month at the height of the global financial crisis.
Though regardless of the outcome of that meeting, changes won’t happen quickly as reports show that any major change will have to first wait approval of Obama, once he is sworn in as President.
The government continues to struggle with finding a solid, coherent way to help the housing sector. The administration is still working on the best way to deploy the remaining money in the $700 billion financial rescue plan passed last month. Treasury Secretary Henry Paulson said Wednesday that the government will no longer buy troubled mortgage backed securities—the original intent of the legislation—and will mainly focus on injecting money into the financial sector.
The debate amongst policy makers continues until they choose a strategy that makes the most sense for the economic well-being of our country.
While we anxiously await their next step, all we can do is continue to move forward, continue to conduct business and stay motivated in this ever-changing business climate.
One interesting piece that—I think will help you do just that—I wanted to share with you; it is a look at the housing forecast for 2009. CAR’s Leslie Appleton Young recently conducted her 2009 forecast presentation (http://www.car.org/newsstand/2009forecast/). I encourage you to watch this important (though long) presentation so you may be aware of this valuable information.
Specifically, Leslie shares how California compares to the rest of the country, noting that while we decreased further and faster than the country as a whole, we are also rebounding at a much faster rate than the rest of the country. It is an important fact that consumers should be aware of.
She also shares the importance of local forecasting noting that it really is a mistake to paint the California real estate market with a broad brush. For example, markets like Central California were hit much harder than the Bay Area yet are often lumped into California real estate stories which make our local numbers seem worse than they actually are. When in fact, our numbers are showing some compelling positive signs. Our sales in the Bay Area, according to DataQuick, have increased 45% since 2007. While we do know that much of this is related to bank owned property sales, the positive side of this is that the buyers are out there and regardless of the price point, the fact is that homes are selling. As we weed through the bank owned listings, inventory will decrease which will eventually cause the price point to increase.
With this week’s economic update in tow, let’s take a look at this week in real estate:
San Francisco—The market seemed to take a slowdown this week, though consumers and Realtors alike share the same positive outlook. Open houses were well attended with a lot of buyers. People who have been sitting on the fence for a while were writing offers this week. Our Van Ness office noted that while there are still sales happening, buyers seem to just want to hover to wait and see which direction the market will go in the upcoming months.
Silicon Valley—Morale remains high under challenging conditions. Properties under valued often receive multiple offers signaling that the buyers are still hanging around for the best values. Our Saratoga office experienced a slight increase in sales in the non-Previews market. Also, listing activity has slowed as expected given that we are approaching the end of the year.
The question I am asked most from people I meet is “how do I stay motivated in today’s economic climate, where we’re all struggling with today’s rollercoaster economy?” My best recommendation to you is to continue to stay positive—focus on the opportunities available in today’s market—and shift your focus on the encouraging aspects in your life and work. And there truly are quite a few positives: attractive interest rates, generous inventory, motivated sellers, economic stimulus benefits and more. This remains arguably one of the best opportunities to buy a home in decades. A Great time to buy investment property too! We need to focus on those positives and rejuvenate ourselves, so we continue to remain on top.

Have a great week!
Monica Manocha
P.S. Remember that I am always here to help you, your friends and family with all their real estate needs.