Lamorinda Real Estate — Climbing Out of the Canyon

24 02 2012

As I’ve often written, you never know that you’ve reached the bottom of a market until its on the way up.  In recent months, I’ve strongly suggested that we had hit bottom in the world of Lafayette real estate, as well as the greater Lamorinda area, and would maybe see some upward trajectory to the market in 2012.  For what its worth, it now appears that the national media is coming to a similar conclusion with the fictitious “national market”, and is starting to run positive stories on the resurgence of real estate markets across the US.

According to a Wall St. Journal article from earlier this week, “Sales of previously owned homes in the U.S. rose last month to the highest level in nearly two years, and the inventory of unsold homes contracted to a level considered healthy by economists, positive signs for the housing market.”  Additionally, Guy Berger, U.S. economist with RBS Capital Markets, wrote that some of the recent growth in home sales may have been the result of the mild winter. “But for the most part, it seems that the housing sector may have turned the corner.”

It’s too early to see all of the positive indicators reflected in the housing statistics for the Larmorinda real estate market.  Sometimes it’s simply the intangible, subjective factors that one has to run with to anticipate a turn in the market.  A week ago I was working with our client on the evaluation of 4 offers received on a Lafayette home priced just under $1M.  While I can’t yet share where the offers came in, the quantity of offers and their financial strength certainly was a quick litmus test for the market.  Furthermore, as part of my due diligence, I spoke to the respective agents and gained further insight into the buyers’ motivation level.  Clearly, the experience reinforced my positive outlook for the market.

We have another Lafayette home that is just about a week away from closing escrow and was purchased before completion by a reader of this blog.  Ironically, within about 2 weeks of going into escrow, we received several online inquiries about the property via its website — from both agents and buyers.  One buyer said that she found it by searching for “Coming Soon” real estate in Lafayette!  She is highly motivated to buy and frustrated by the low inventory in her price segment.

Sometimes, just talking with other brokers can yield insight to the market and a feeling for what lies ahead.  While viewing new properties to the market on Tuesday,  we had numerous agents ask us what sorts of properties we have on their way to the market — all telling us that they have many buyers with unsatisfied needs based upon current inventory.

If you’ve ever been at the bottom of a canyon, you know that the climb out can be slow and sometimes fraught with some setbacks along the way.  I think we’ve begun our journey out, and will soon be able to look down and see some of the scattered debris left in the tracks of the market below.


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Lamorinda Real Estate 2012 — Where the market is now, and what lies ahead — Part 1

21 01 2012

As we commence 2012, we are about 6 years into the current real estate cycle that saw prices hit their peak in Contra Costa County around June 2006, and then begin their well-documented decline phase.  Much has transpired on the economic front lines over the last year that has impacted consumer confidence, ranging from the European financial crisis on the negative side of the balance sheet, to the positive impact of a fourth quarter resurgence in our domestic stock markets.  Although one never knows for sure that the real estate market has bottomed until historical data shows that it has already turned up, we believe that it is doubtful that we will see any further erosion in Lamorinda real estate prices.   The bottom may have already been reached, and we think that 2012 will bring price stabilization and perhaps some slightly improved property valuations over recent years.  The downward leg of the cycle may be broken.

Although our micro-market of Lamorinda often behaves much differently than the overall Contra Costa market, and profoundly different than the “national market”, it is worth evaluating the encouraging trends we are seeing on a county-wide basis.  Keep in mind that an enormous proportion of the county sales data is comprised of Antioch and Pittsburg which have been at the forefront of the national foreclosure market.  As a result, strong positive movement in the county inventory and sales statistics serve to make an even more significant statement about the improving conditions of our market.

The December 2011 market data showed a profound 44% drop in inventory from the same period in 2010, while pending sales grew by 17%.  This resulted in reducing the 3.2 months of inventory in December 2010 to only 1.8 months in December 2011.  It’s a very significant improvement in the market, and we believe it signals price stabilization and perhaps even selective shoring up of prices in some areas.

Within our Lamorinda real estate market, the inventory decline tracks with the county, experiencing a reduction of 46% over December of 2010.  The statistic that we didn’t really expect to find is that inventory levels for December 2011 dropped to the lowest level we have seen for 5+ years!  To underscore the apparent health of the market, closed sales for December 2011 were up 36% over the previous December.  Pending sales, the leading edge of the market, were up slightly over last year.  This was likely due to the depletion of inventory and the shortage of homes in many price segments.   Prices decreased 4.7% in Lamorinda when evaluating the 2nd half of 2011 over the same period in 2010.

When this series continues… you’ll find out about the strength and weakness of particular segments of the Lamorinda real estate market, and what we believe lies ahead!


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Lamorinda Home Sales — Common Mistakes When Selling a Home

5 01 2012

As we start the year, we’ll also be heading closer to the prime selling season of the year in Lamorinda real estate, and working with our seller clients in preparing their homes for sale.  Most of our clients are wonderful, reasonable people who make the psychological shift from “living” in their home to “merchandising” it for sale.  There is a distinct difference.  Very few of us “live” in our homes in a manner consistent with optimizing its opportunity to be sold for the highest price available in the market.  That requires presenting it as a product that appeals to the broadest possible segment of buyers.

I attended graduate school in business more years ago than I’d care to admit, but the person synonymous with marketing back then still lives on as the present day authority… Dr. Phillip Kotler of the Kellogg School of Management.  Considered to be the “guru” of modern marketing, Dr. Kotler is famous for his “4 P’s of Marketing” — the only four variables that can be controlled when bringing a product to market:

1) Product – What is presented to the market.

2) Price –  It’s price point.

3) Promotion – How it is promoted in the marketplace.

4) Place –  Where it is brought to market.

Ultimately, the seller of a property has the final control over 2 or 3 of the 4P’s… product, price, and place.  This leaves promotion in the hands of their selected real estate agent.  A quality agent will also be highly involved in helping to “shape” the home (product) prior to it going on-market, but only to the extent that the seller cooperates in the process.

The following are the most common mistakes we see sellers make when putting their home on the market:

1.  “The Stalker”:  This is seller that believes that he/she is the best spokesperson for their home, and therefore follows other agents and their buyers around the home when it is being shown — trying to “sell” them on it throughout their visit.  Yes, believe it or not, this happens here in Lamorinda!  Nothing turns a prospective buyer off more than this behavior, and it inevitably leads to the buyer and their agent becoming very uncomfortable — leaving the home as quickly as possible.  The best advice is to take a walk, go shopping or visit a neighbor… and, give the buyers space to mentally “move into” your home.

2.  “I just want to ‘test’ the market”:  This is akin to being partially pregnant.  Either you are on the market with the intention of selling or you should be waiting until you are truly ready to engage in the process.  ”Testing” the market at an unrealistic price point serves no real purpose.  Today’s buyers are highly informed, and no one in this market will over-pay for a home.

3.  ”I’m waiting for the one ‘right’ buyer” :  Most agents have heard this comment at least once per selling season, and its usually emanates from the seller who thinks that their home is worth more than the market suggests, or doesn’t adequately prepare the home for market because they believe that the “one right buyer” will overlook its flaws, cluttered rooms, etc.  Rarely is there the “one right buyer” who will make an offer on a significantly over-priced home, or want a home that the majority of the market chooses not to purchase.  The best advice is to prepare your home for market in a manner that will have it appeal to the broadest possible base of potential buyers.

4. “If I price my house closer to market, I’m afraid I’ll get ‘low-balled’”:  If the feedback from showings of your home is that its “over-priced”,  then the above concern seems a bit illogical.  As a seller, you WANT an offer.  You can always counter it, say “no” to it, or even ignore it.  Assuming that there aren’t other corrective actions you can take to make your home more appealing, addressing a clear over-pricing issue is the most logical move.  Studies have clearly demonstrated that a home that is properly priced from the beginning will sell faster and for more money than one that is initially over-priced.

5.  “My home doesn’t need to be staged.  It wasn’t staged 30 years ago when I bought it!”  Times have changed, and it’s important to make the psychological break from “living” in your home to “selling” your home.  Once it’s on the market, it becomes a product, so why not make it as appealing to buyers as possible?!  The incremental investment for staging will yield a positive return in the increased appeal of your home to potential buyers and the shorter market time.  Remember, the longer a home is on the market, the more the market discounts it.  At a certain point, buyers and agents begin to wonder “what’s wrong” with the home, and showings dramatically drop off.


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Categories : Lafayette CA Real Estate Market, Lamorinda Real Estate, Uncategorized

The Case for Stabilized Prices in Lamorinda Real Estate

18 12 2011

My post from earlier this week displayed statistics suggesting a favorable relationship between inventory and demand across most price segments in the Lamorinda real estate market.  Since markets are driven by the relationship of supply and demand, the local stats seem to be suggesting that we may have reached the point of price stabilization in Lamorinda.  This past week, national data was released that is very supportive of what I’m seeing in our market.

According to Corelogic, an independent provider of financial and market data, “many housing statistics are basically moving sideways.”  The Corelogic stats suggest an emerging trend of price stabilization when one removes distressed sale transactions from a given market area.  In the case of the Lamorinda real estate market, there are very few distressed property transactions, therefore even a stronger case can be made for the stabilization of our market.

Early in the housing downturn, non-distressed properties were falling in price at at the same rate as bank-owned, distressed properties.  Not wanting to hold inventory longer than they had to, banks quickly cut prices to move foreclosed homes.  The downdraft in prices took non-distressed properties along for the ride.  That appears to be changing as consumers differentiate between distressed and non-distressed real estate.  In fact, according to an article in the Wall St. Journal, “…while price declines are resuming, they are not yet falling from one-year ago for non-distressed homes. In fact, during the first nine months of 2011, prices of non-distressed homes remained relatively stable, with year-over-year declines between 2% and 3%.”  This is on a national basis, and analysts at Barclays Capital called this “the most important trend in the housing industry right now.”

Taking this a step further, Barclay’s housing analyst Stephen Kim stated, “a distressed home is increasingly being seen as a poor substitute for a non-distressed home….bifurcation between distressed and non-distressed homes will only widen with the passage of time.”  To a large extent, I have seen this in the Lamorinda real estate market, with buyers shying away from the small handful of distressed properties that we’ve seen hit the market.  They are often in poor condition, and with a bank’s limited disclosure obligations, the buyer must be extraordinarily careful during their due diligence period.

The greatest stabilization in Lamorinda real estate will be found in the sub-$1.2M price segment, with progressive softening as one moves up-market.  Once the market re-awakens from its seasonal winter hibernation, I am expecting a fairly robust spring market.


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Lamorinda Real Estate Market Forecast For 2012

13 12 2011

I’m quietly stirring my healthful cup of green tea this morning as I carefully read the tea leaves and try to carefully craft my predictions for 2012 Lamorinda real estate.  Let’s begin with the broader economy and work our way to greater specificity:

1.  Volatility will persist in the US financial markets:  Volatility is driven by uncertainty, therefore we will continue to see broad swings in the market as we work our way through financial recovery and the winds of change in world markets.  The volatility will impact consumer confidence, potentially in both a negative and positive manner as 2012 unfolds.

2.  The Bay Area economy will significantly outpace overall US economic recovery:  We are most fortunate to be living in such a dynamic area of the US — rich with cultural and business diversity.  The foundation of net job growth in the Bay Area has its origin in entrepreneurship and the creation of new businesses.  According to the Ewing Marion Kauffman Foundation research on this subject,  about 3M jobs are created annually across the US from new businesses.  Within the Bay Area, there are approximately 470 entrepreneurs per 100K in population, with a resulting significant positive impact on job growth all around the bay, including within our world of Lamorinda real estate.  A strong job market bolsters consumer confidence, and in turn, strengthens our housing market.

3.  There are clear signs of improvement ahead in Lamorinda real estate:  For those poised to pounce on my words, don’t misinterpret them to mean that prices are going to start heading up, or that 2012 won’t have its real estate challenges.  I am going out on a moderately strong limb and suggesting that the Lamorinda real estate environment will be better in 2012 than it has been in the last several years.  Let’s take a look at some empirical data that seems to support my conclusion:

Lamorinda Real Estate Through Nov 2011

The chart shows:

A.  A significant drop in inventory from 2010 to 2011.

B.  A historically healthy relationship of 2-4 mos of inventory against pending sales throughout most of 2011

C.  Improved strength in the market during Nov 2011 when the market is normally sluggish.

4.  The strongest market segments will be homes priced under $1.5M:  Once one crosses the threshold into Lamorinda real estate’s “upper” price ranges of about $1.5M+, the market changes dramatically, as vividly shown by the following chart:

The following facts apply to this segment:

A.  The upper market segments were the last to be impacted by the housing downturn, and will be the last to recover.

B.  They are the least affordable homes in the present market, therefore simple supply and demand relationships suggest that it will be softer than more affordable segments.

C.  ”Shadow inventory” held by banks may still impact this segment.  We really don’t know how many homes the banks are holding in various states of foreclosure.  Until this inventory is cleared, the market cannot fully recover.  Fortunately, Lamorinda real estate has been only lightly affected by foreclosure properties.

5.  Investors and home buyers will seek investment in real estate as an asset class.  Real estate is a very attractive asset class given the volatility of the stock market, it’s seemingly unpredictable behavior, and our extraordinarily low interest rates.  As we saw happen in late 2001 and 2002, investment money flowed into real estate following the extreme volatility of the financial markets.  While I don’t expect a repeat of that volume of activity, I do foresee that confidence in real estate will increase in 2012, which will result in more people investing in the asset class for both cash flow, capital appreciation, and for home ownership.

6.  The imbalance of “power” will still reside with the buyer.   Just to be clear, sellers who have been “waiting out the market” hoping to get “their price” will be disappointed.  This is no time to be “testing the market” or looking for “that one right buyer” who will pay an over-market price.  We’ll be in a recovery mode in 2012, but that does not mean that prices will move up.  For buyers, interest rates will likely stay close to the present ultra-low levels throughout 2012, so your timing may never be better to jump into the market.

Let me know what YOU think!


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Categories : Lafayette CA Real Estate Forecast, Lafayette CA Real Estate Market, Lafayette, CA Real Estate, Lamorinda Housing Market, Lamorinda Real Estate Forecast, Lamorinda Real Estate Market Statistics, Lamorinda Real Estate Pricing, Uncategorized

Six Reasons Why the New HARP Refi Plan Will Be Good for Lamorinda Real Estate

24 10 2011

Since all markets are governed fundamentally by supply and demand, keeping unnecessary supply off the market is a favorable outcome when it can be accomplished.  This is exactly what the administration’s new HARP Refi Plan will accomplish in the Lamorinda real estate market, and across the nation.  The new plan will allow borrowers to refinance to today’s much lower rates, regardless of how far their homes have fallen, according to today’s Wall Street Journal.

1)  The borrowers will be able to do it in a much more streamlined manner, in many cases without the need for a new appraisal or extensive income documentation, as long as the borrower is current on their payments and can demonstrate a steady stream of income sufficient to cover the new loan payment.

2)  If you’ve got a second mortgage, the good news is that most major lenders have agreed to subordinate the second under this new program.

3)  Fannie and Freddie fees normally charged to riskier borrowers will be waived if the borrower refinances into a shorter term mortgage, e.g., a 15-year term from the previous 30-year mortgage.

4)  Lenders are expected to start taking applications for this new program in early December.

5)  There’s an easy way for you to find out of your loan is owned by Freddie or Fannie.  Just click on the links provided — Freddie or Fannie.

6)  Finally, allowing these borrowers to refinance to much lower rates will put an estimated $24B back into our economy AND keep many homes from drifting into foreclosure.  Going back to my original premise that markets are governed by supply and demand, keeping unnecessary supply down will help bolster prices which is always good news in the world of Lamorinda real estate!

 


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Categories : Lafayette CA Foreclosures, Lafayette CA Real Estate Market, Lafayette CA Real Estate Refinance, Lamorinda Foreclosures, Lamorinda Housing Market, Lamorinda Real Estate, Lamorinda real estate loans, Lamorinda Real Estate Refinance

It May Be About the Inventory in the Lamorinda Real Estate Market.

23 10 2011

A recent Wall Street Journal article raised several questions about supply and demand in the housing market, and it struck a resonate chord with what we are seeing in the world of Lamorinda real estate.  The Journal article raised the question about whether “it’s low demand or poor supply that’s hurting the housing market.”   Due to the fact that we tend to market a substantial number of homes in the Lafayette real estate market, we’ve received at least 5 calls from other agents in the last couple of weeks, asking if we have any new inventory that will be coming on the market.  The agents all explain that their clients simply aren’t finding what they want among the current Lafayette real estate offerings.  Almost all of the calls have have been in the $1.5M – $2M segment — an area of the market that has been one of the most negatively impacted over the last couple of years.

The Journal article discusses a number of factors contributing to the perception of poor quality or inadequate inventory, and notes that over-pricing is a significant factor.  We have found this to be true, particularly over the last few years as the market has been declining. In at least 50 percent of all of our interactions with sellers, the challenge for us is to help the client understand the state of the market and where their home should be priced in order to compete effectively.  It’s often as emotional as it is intellectually challenging, because it is sometimes very hard for sellers to grasp that the home they cherish so much has been impacted by the broader market conditions. They often want to believe that they’ve somehow been spared from the degradation in home values, or that “the right buyer” will come along who “will pay our price”, but ultimately they need to face the market realities.  In the end, over-pricing hurts them as the market discounts their price over time, and consumers begin to wonder “what’s wrong with that house”.

As we look at the current Lamorinda real estate inventory, there is a fair amount of over-pricing in certain segments that is undoubtedly keeping buyers away, coupled with overall declines in inventory over the last year.  Some sellers have simply taken their homes off the market and are deferring plans to downsize until they see stabilization in prices.  That stabilization is already happening in certain price segments, and may spread to others if we see broader confidence in the economy as we move into the Spring market. Ultimately, that may solve our inventory problem.


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A Look at the Lamorinda Real Estate Market YTD 2011 and What Lies Ahead

21 10 2011

Let’s look at our local market as we work our way into the last quarter of the year and near the end of October.  Inventories have decreased significantly from this time last year… running about 25%+ below where they were last year.  In fact, we have been experiencing about 3 months of inventory in the Lamorinda market over the last several months – representing a very sound relationship between supply and demand.  This compares favorably to the 4-5 months of inventory that we were running at this time last year.  Absolute sales volumes have decreased from last year, particularly in August and September where we saw a reduction of about 20 percent from 2010.  This clearly reflects the uncertainty emanating from global financial markets, and the extreme volatility we’ve seen in the US stock markets.

As one would imagine, the most active markets have been those most approachable to buyers.  Approximately 70 percent of all Lamorinda sales this year have been at price points below $1M.  Other trends worth noting include the move toward more central, urbanized locations.  This began on a more macro basis as people began moving back to urban centers such as San Francisco several years ago.  It has been a function of rising gas prices; aging baby boomers selling suburban homes; and general movement favoring locations where one can walk to shopping, entertainment, and restaurants.

This trend has played out within our community, too, as we’ve seen distinct premiums paid for perceived central locations such as Lafayette’s “Trail Neighborhood” and Happy Valley.  In some cases, a 5 minute commute differential can command a 15% premium in the market.  As an example, we had a recent listing near the “Trail Neighborhood” get bid up by $100,000 in the sub-million dollar price range within 3 days of going on-market.   There have been larger properties in this area that were bid up several hundred thousand dollars during the peak of our spring 2011 market.  Other segments have been much slower, such as the $1.5M – $2M range where there wasn’t a single home that went pending in the month of September throughout Lamorinda.  Sales above $2M have been scarce this year, averaging about 1 per month in Lafayette.

So, what lies ahead?  As we enter the wet winter months, we will see normal seasonality seize control of the market, and overall transaction volumes decrease.  Typically, the market lies mostly dormant until mid-February when it seems to slowly come out of hibernation.  Interest rates will remain low for the next couple of years, so job creation and consumer confidence will play the most dominant role in dictating the performance of the housing market as we enter 2012.  Another “wild card” in the equation involves the disposition of bank assets… the properties in some phase of financial distress and not yet in the marketplace.   Recent bank industry announcements have suggested this process will accelerate — a necessary element to cleansing the market and creating more stabilization.  In the short term, it could increase inventories and put additional pressure on prices.

Finally, with immense amounts of cash on their books, we could also see significant hiring increases from corporate America in the months ahead if our elected representatives can find some common ground to provide the needed confidence and incentives to grow their businesses.  Should that happen, we could see better than expected improvement in consumer confidence and the housing market as we move through the coming year.


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Refinancing in Lamorinda? Some Tips to Think About…

14 10 2011

An article in today’s Wall Street Journal is providing the stimulus for today’s post, as well as some very recent and highly mixed interactions I’ve had with appraisers in the Lamorinda real estate market.   With so many people refinancing their existing loans, the potential pitfalls of the appraisal process becomes very relevant to the achievement of your objectives.

On a fundamental basis, there are wide swings in the competence levels of appraisers, and the lender has does not control who does the appraisal.

My list of appraisal imperatives:

1.  Screen the appraiser when he/she calls for the appointment.  Make sure the appraiser is LOCAL and EXPERIENCED in doing Lamorinda real estate appraisals.  Even though the lender may think that a San Jose, Fremont, or Vacaville-based appraiser is “local”, they are not and they won’t be competent in our market.  If the appraiser does not meet this initial criteria, do not allow them to start the appraisal.  Ask your lender to resubmit the appraisal order and insist on someone who is truly from this area.

2.  First impressions can make a difference.  Put your home in as close to “show” condition as you possibly can.  You want the appraiser to “like” your home and believe that it stands above the “average” home he/she sees in the community.  If it has obvious deferred maintenance, weeds over-grown in the yard, and the rooms are overflowing with 20+ years of accumulated junk piles — your appraisal will reflect this.

3.  Sell your improvements.  If you don’t tell the appraiser what you’ve invested in your home’s improvements, they’ll never know about them.  This is not to suggest that you’ll see a return on all of your investments in improvements, but the knowledge of them can help to make your home standout, and may tip the scale in your favor during the final determination of value.

4.  Help your appraiser with the “comps”.  Appraisers are required to find “like” properties, ideally sold within the last 90 days and within a 1 mile radius of your home.  It always helps to go online and to pull sales data on homes that meet this criteria.  Even though Zillow’s “Zestimate” of value has little grounding in reality for homes in Lamorinda, the site does allow you to search public records for the needed comp info.  Consumers can utilize a wide variety of other real estate sites to find this information, too.  Since appraisers almost never see the interiors of the “comps”, any personal knowledge you may have about these properties should be shared IF it helps support a higher valuation for your home.

5.  Rigorously scrutinize the final appraisal.  Do not assume that the appraiser accurately completed the appraisal.  Last year, I had an appraiser almost cost a client $50,000 in a contract renegotiation when the appraisal came in that far under the price agreed upon between buyer/seller in the purchase agreement.  The appraisal had been subjected to two levels of underwriting review, but no one caught the computational error that I found when I reviewed the appraiser’s work.  As it turned out, the appraisal should have come in OVER the contract purchase price, NOT under it.  The appraisal was corrected and the transaction proceeded to a successful close.

Last month, a “local” appraiser was sent from Concord to appraise a client’s Lafayette property.  The appraiser passed the initial screening, and we provided him with a detailed set of comps, including written explanations of each property.  The appraiser ignored our comps, and decided to go OUTSIDE the Lafayette School District for two of his six comps, and then threw in two bank foreclosure properties for good measure.  No valuation adjustments were made for these factors.

The appraisal was absurdly completed and came in $100K under the purchase contract value.  I ended up spending hours writing a detailed rebuttal to the appraisal which ultimately helped set it aside, allowing the transaction to eventually close at the contracted purchase price.  It was an incredibly frustrating experience that could have potentially caused a client to lose their buyer or up to $100K in their sales price.

In the final analysis, it’s important to be your own advocate in the process.  Never assume that the appraiser will see the value in your home, nor accurately complete a competent appraisal.  A set of watchful eyes on the process is imperative.


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Categories : Lafayette CA Real Estate Appraisals, Lafayette Home Sale Resources, Lafayette, CA Real Estate, Lamorinda Housing Market, Lamorinda Real Estate

Lamorinda’s July Defies National Markets

17 08 2011

I couldn’t resist the sensationalized headline to this post, especially since traditional media sources have been relying upon these types of headlines to broadcast how anemic the “national” real estate market has been.  If you are a regular reader of this blog, you KNOW there is no such thing as a “national” real estate market.  Until such time as someone can convince me that a Lamorinda real estate buyer is concurrently considering buying in some place like Oshkosh, WI, I’m holding firm to my belief.  No offense to Oshkosh, I’m sure it’s a lovely place, just not for me!

In recent days, we’ve heard that housing starts are almost non-existent and even that the “Bay Area market” took a dip in July with a decrease in sales over a more robust June.  Although it’s certainly not on fire, the Lamorinda market performed much better than most.  The leading edge of our market is always represented by our “pending” sales… those that actually entered escrow in a given month.  Looking at the transition from June to July of this year, we saw a 29% jump in pending sales in July.  That also represents a 24% improvement from July of 2010.  An amazing 63% of those July 2011 pending homes were priced under $1M, so it’s pretty clear where the action is!  Just think back to about 2005 when you could not find a habitable home in Lamorinda for under $1M.  Even moving up-market a bit, July was a pretty good month.  Seven homes in the $1.5M – $2M segment went pending, representing one-third of the total available inventory.  Finally, we reach for the life support systems in the $2M+ market where only 2 homes went pending against an inventory of 21 homes — both were in Lafayette.

Most certainly, we have interesting times ahead.  The Fed has committed to low interest rates, and has shot what might be their last economic bullet to infuse life into the economy.  With essentially zero to negative returns for cash positions, the Fed is trying to stimulate investment in the economy… either in equities or real estate.  Jobs drive housing, so we should keep a keen eye on those numbers moving forward.  The good news is that Lamorinda real estate continues to distinguish itself from other markets.


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Categories : Lafayette CA Real Estate Forecast, Lafayette CA Real Estate Market, Lamorinda Housing Market, Lamorinda Real Estate, Lamorinda Real Estate Market Statistics

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