In a recent Bay Area interview, Wells Fargo CEO John Stumph stated that our local economies had “begun to struggle back to their feet” following the long recession. He went on to say that “we are even seeing a bounce off the bottom.” Stumph shared that he worries about the Wells Fargo portfolio of home equity loans because of the fact that so many of them are “underwater” — meaning that there is little or no equity left to secure the loan. Finally, he shared that his biggest “worry” is jobs as we work our way out of the recession.
So, as we work our way out of the economic crater and approach the heart of the 2010 real estate market, let’s take a look at some quick facts and observations:
The Facts –
- Inventories are rapidly climbing. As of today, there are approximately 374 properties in the Lamorinda real estate market in the “Active” or “Pending” category. By any measure, there is a LOT going on in our market!
- Of the 374 properties, approximately 261 are “Active” and unsold, leaving about 113 as “Pending” in escrow.
Observations –
- Buyers are tentative, but willing to jump into the market when they feel the time is “right”. The only homes selling quickly, e.g., first week on-market, are the ones that are clearly underpriced to the market. There have been several recent properties go into escrow inside of a week on-market. In all cases, we felt that the property had been substantially underpriced and watched as agents scrambled to even get their clients to the home in time to see it and then potentially submit an offer. Quite honestly, we have wondered about whose interests were really served via this strategy… agent or client.
- Most homes, no matter how beautifully presented and compelling, are taking weeks to gain traction in the market. We have recently been involved in multiple offer situations on both sides of the transaction — once representing a buyer and another time a seller. Both properties had been on the market for 2 or more weeks. In one of the situations the winning bid was over asking price and the other it was under. Just a couple of years ago, we would have never seen a property with 3 or more offers end up under list price. In each of these situations, the buyers circled, and circled… then all decided to write offers once one of them mustered the courage to step forward.
Approximately one in four homes in the Lafayette real estate market, Orinda & Moraga are selling. This is encouraging. In upcoming posts, I’ll take a more indepth and telling look at individual market segments and the “anatomy” of some of the transactions.
