Bay Area housing market slows as summer vacation season takes hold

As summer gets into full swing, the Bay Area housing market appears to be taking a bit of a vacation break. While buyers are still out in the market in some communities, in many parts of the Bay we’re seeing the usual summer slowdown with modest open house attendance and fewer sales. Some of this softening is attributed to the time of year and some of it is perhaps due to the end of the federal tax credit.

But the summer hiatus hasn’t impacted all communities equally or even all neighborhoods within those communities. While many offices report very quiet activity, agents in other offices are seeing continued strong interest by buyers looking to capitalize on attractive pricing and record-low mortgage rates.

This schizophrenic market is exemplified by Menlo Park’s observations: “One day, we see a sale and think ‘Wow! How did they ever get that price for this house?" And then the next day we’re saying, ‘I can't believe that house is still sitting there; it’s a great value." Down the Peninsula, high-end properties between Palo Alto and Atherton are still selling– some even before hitting the market, with about a third of sales attracting multiple offers. Cupertino declares that sales activity is up with listing inventory decreasing. Similar brisk activity was reported in central Marin County.

In general, the buyers – those who haven’t jetted off to Hawaii or trekked up to Lake Tahoe – are still out looking but they’re being very, very cautious about taking the next step and making an offer. Homes that are well maintained and perceived to be a really good value are indeed selling. But buyers want to make sure they’re getting the best deal, and often are making offers well under the list price.

It’s understandable that buyers are being cautious and are looking for direction, given the macro-economic issues all around us. The economy appears to be on the mend, (depending on the economist, and the reports released on any particular day) but the recovery is slow. The jobs market is still grappling with stubbornly high unemployment, as evidenced by Friday’s jobs report. Some 131,000 jobs nationwide were cut last month, though that was primarily tied to layoffs of temporary census workers. The unemployment rate remained unchanged at 9.5 percent.


Overly negative news media reports haven’t helped the housing market. The press seems to focus primarily on the negative and ignore the overall improvement we’re seeing – the fact that corporate earnings have rebounded significantly, home sales have steadily risen over 2008 and 2009 levels, the credit markets have grown stronger, and the stock market has recovered nicely from last March’s low, making most 401k’s quite a bit healthier. The grim tone of the financial press may be frightening some potential buyers into inaction.

Nonetheless, there are still savvy buyers out in the market. They understand that while we have economic challenges and uncertainty, things have indeed gotten better. And they know that we’re seeing a rare window of opportunity right now with homes priced at very attractive levels and mortgage money available at rates we haven’t seen since…ever. Mortgage rates hit a fresh record low this week with 30-year fixed-rate mortgages averaging 4.49%, according to Freddie Mac. Those who are buying now realize the strong, long-term investment potential of real estate, especially in the Bay Area at today’s price level.

Call me today and let us talk about your real estate situation. 408 399 1495