Why the time may be right in Lamorinda Real Estate…

7 06 2011

The national media jumped all over last week’s Case-Shiller data announcement that real estate markets had dropped to 2002 pricing levels and that we were entering a “double-dip” period of the housing market decline.  Bad news sells, and the media hounds were all over this one.

It’s important to look at matters like this with a sense of proper perspective.  When the tide goes out, all boats ride lower in the water, but that does not mean that they all sink equally low, nor that that some won’t rise to higher levels when the tide comes back in. The current downturn is being driven by a glut of foreclosures in the broader market, and an employment market that is still weak due to the vastly improved efficiency of America’s private sector employers.  The foreclosures are artificially lowering “the tide” in Lamorinda real estate, even though we have relatively few of them within our immediate market.

According to CoreLogic, national residential prices dropped 7.5% in April over April 2010 levels, yet stripped of the foreclosure sales, prices were only off one half of one percent (0.5%).  In Lamorinda, the April 2011 median price was down just 2.5% from April 2010 — a much healthier performance level than the “national” markets.  Ah… remember, there is NO such thing as a “national” real estate market, yet that is what the media keeps referring to in the myriad of bad news real estate articles.

It’s refreshing to see some balanced perspective in the press, for example in this past weekend’s Wall St. Journal article “Why It’s Time to Buy“.  According to the article, there are numerous reasons to buy now:

  • Mortgage rates at near 50 year lows, dropping to an average of 4.55% last week.
  • Moody’s Analytics reporting that the ratio of home prices to income is now 20.9% lower than the 15-year average through 2010, and 12.5% lower than the 1989-2004 average.
  • Nationally, Moody’s is predicting that the glut of foreclosure homes will subside by 2013, and that prices will begin edging upward then… sooner in areas such as the land of Lamorinda real estate where we have not been severely impacted by distressed properties.
  • Demographic indicators such as “household formation”—the number of new households each year—are on the rise, and will take a sizable “bite” out of housing inventory… helping the “tide” to rise.
So, what does the future hold? Once the foreclosure mess begins to clear up, say housing economists, the traditional drivers of the housing market—demographics, affordability, loan availability, employment and psychology—should take over. According to CoreLogic’s chief economist, Mark Fleming, “The regular housing market is hanging tough.”  With a highly diversified economy surrounding Lamorinda, record low mortgage rates, and foreclosure levels FAR below those found in most parts of the country, it’s hard to imagine a better time to buy for the long term.  Just remember, you’ll never know when the market has bottomed out until its on the way up.

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Time to Jump into the Lamorinda Real Estate Market!?

27 05 2011

It’s easy to be negative about the economy and the real estate market.  After all, we’ve traversed economic territory over the last several years, previously unseen by anyone since 1929 and the Great Depression.  Our recovery has been sector-specific, and many people are still unemployed or under-employed.  If you were to spend time down in the Silicon Valley’s tech economy, you would never know that we are at the tail end of a recession.  Jobs are abundant and vast troves of venture capital dollars are searching for early stage investment opportunities.

I just returned from a short trip to NYC to attend our son’s graduation from NYU’s Finance MBA program. Judging from the employment opportunities available to the graduates and the over-flowing restaurants, shops and bars of Manhattan, the finance sector of our economy is booming, too.  John Paulsen spoke at the graduation.  Both he and his $4B+ are doing fine.

So… the economy is a mixed bag.  There are reasons to be concerned, yet equally compelling reasons to be positive about its outlook.  We are a nation of innovators with a history of large swings in our economy as we go from boom to bust.  I’m choosing to be positive about the long term prospects and the upcoming generation of entrepreneurs who are creating new growth opportunities in areas that we never contemplated before.

As an example, here’s a shameless plug for a company co-founded by my son while he attended NYU’s full-time Finance MBA program: SKILLSLATE.  Frankly, I don’t know how he did it since founding a startup company is a 70-100 hr/week undertaking.  It’s innovative, extremely well-received in NYC, and the company is moving to SF — hopefully launching in the Bay Area in the months ahead. Companies and innovation of this type are why I’m personally bullish on our long-term economic growth prospects.  Wealth can be created where there was none before.

So… back to real estate.  Our market has reflected the weather…quirky, sleepy at times, and sometimes wild.  As of this morning, there are 214 Active properties on the market in Lamorinda, and 112 Pending in escrow.  That’s a pretty healthy relationship of pending sales to available inventory.  Clearly, buyers are carefully evaluating the market and making buying decisions when they see strong value propositions.  Here are some additional reasons why I think it’s a good time to jump into the market:

  • Interest rates are headed up.  It’s inevitable, and it may be accelerated by the changing conforming loan limits at the end of September.  With the reduced Federal support of the mortgage market, rates will likely click up.
  • We might see the end of the 30-year loan?  It’s speculation at this point, but certainly possible as private lenders seek to reduce their mortgage portfolio risk.  I don’t see this as likely in 2011, but we certainly see a trend in this direction late this year and in 2012.
  • Mortgage qualifying requirements will become more stringent.  This is an inevitable piece to lenders reducing their portfolio risk.  I expect to see higher credit score thresholds for the best loan rates and perhaps slightly higher minimum down payment requirements.  This is a work in progress.  Stay tuned.
  • The alternative to buying is renting.  Rents are going through the roof!  It’s all supply and demand driven, but rents are getting to be outrageous in locations within the US where people really want to live… San Francisco, Lafayette, Orinda, and yes, Manhattan!  I probably get 4-5 calls a month from people hoping that I might know of a home to rent.  Its because they can’t find one through normal channels, like Craigslist or the MLS.  The overall cost of buying vs. renting may have tipped to the former, especially if you believe we’ve reached the market bottom.
Food for thought.  What do you think?

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The Lamorinda Real Estate Market – Spring 2011 – April Sales

7 05 2011

We’ve officially got the first real month of the typically vigorous Spring market completed, and the sales data has just been released. Let’s take a look at it’s overall performance within the Lamorinda real estate community:

The Lamorinda April 2011 Market April 2011 inventory is down about 18 percent from April 2010, however sales are down about 20 percent, too.  The leading edge of the market, “pending sales”, shows about an 8 percent reduction from April 2010, likely due to the absence of the powerful influence that the first time home buyer credit had last year.  Arrayed against a significantly reduced inventory, the important relationship between supply and demand is shifting toward the firming up of Lamorinda home prices, also reflected in the nominal 2 percent reduction in median price from 2010 to 2011.

Let’s take a look at specific price segments, beginning with the sub-$1M price point:



Clearly, this is where the action is!  Inventories are down and the leading edge of the market, pending sales, are up.  This has clearly been reflected in our experience this past month, with a very clear high level of demand for attractive homes in the sub-$1M price range.

The picture changes dramatically as we move slightly up-market and look at the $1M – $1.5M price segment:



Inventories are down about 11 percent, but the “pending” sales are down a significant 37 percent!  It’s surprising that this follows a very robust March where pending sales in this segment were up about 31 percent over the prior year.

To show you how unpredictable statistics can sometimes be, you’ll be surprised by the following look at the $1.5M – $2M segment where sellers experienced the best market conditions of any segment:


Inventories dropped close to 37 percent in this segment over 2010 and about 44 percent of the available inventory went pending last month!  Some of this demand may have come from the annual 6 percent drop in median price within this upper-mid market price segment.

Finally, let’s take a look at the $2M+ segment:

For potential home sellers in this segment, this chart must be disturbing.  Inventories are climbing and demand was non-existent in April, following an almost dead month of March.  As I’ve written in numerous posts over the last couple of years, this is the segment that was initially the least impacted by the recession, but it is now the segment that will see the largest price adjustments to rekindle demand.  For those with the financial ability to purchase in this upper market segment, you are clearly in the driver’s seat.


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The Jury May Still Be Out on the Lamorinda 2011 Spring Real Estate Market

29 03 2011

Whereas my last post was quite optimistic about the performance of our market based upon the February stats, it may be too early to predict a robust return to a “normal” Lamorinda real estate market.  The national press continues to be rather pessimistic, and inevitably that can wear off on consumers.  According to today’s Wall St. Journal, prices nationally slid from August of 2010 through January of this year, hitting lows not seen since 2003.  March was also not a good month for consumer confidence based upon a report released today that showed gloomier expectations about the economy and labor market.  Escalating petroleum product prices and the world-wide impact of Japan’s tragedy aren’t helping matters.

“These data confirm what we have seen with recent housing starts and sales reports,” said David Blitzer, chairman of S&P’s index committee. “The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing.”  Even with the microeconomic uniqueness of the Lamorinda real estate market, and its display of strength, it cannot separate itself entirely from what is happening on a national basis.  As Mr. Blitzer has pointed out, we are clearly not yet at a point of resurgence in the housing market.

With that said, let’s drill down a bit and see where the strengths and weakness lie in our present market.  Based upon the published February 2011 data, the median price of a sold home in Lamorinda was $836,000.  That should tell you a lot about the present market.  After all, it wasn’t that long ago that people used to joke about anything under $1M being sold for lot value alone.  Looking at the market’s leading edge, of the 43 “pending” sales in February;  a whopping 25 were priced at under $1M; 10 were priced between $1M – $1.5M;   only 4 were priced between $1.5M – $2M; and just 4 priced over $2M.  With some quick math… almost 60 percent of the sales were under $1M.

March looks like it’s been a very strong month based upon homes that are presently pending as of today.  In fact, it looks much stronger than the same period in 2010. Since the official stats won’t be released for about another 10 days, we’ll see how they look upon publication.  If you are interested some additional diversity in opinion on the local market, you might want to read the recent feature article in Diablo Magazine, “Boom, Bust, Bargain”.   You’ll see a photo of one of our beautiful, and now “pending” listings on page one, and you’ll find me quoted on pages two and three.   Stay tuned for what lies ahead in the Spring market!


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

Steep Discounts in the Lamorinda Spring Real Estate Market? Perhaps.

26 03 2011

A flurry of reports emerged this past week indicating that we still have a ways to go before we see a resurgence in a healthy national real estate market. New home sales were sharply down, and the National Association of Realtors reported that February home resales were down 9.6%, with the median US home price dropping to its lowest level since February 2002.  Many economists are stating that the extremely low housing prices, coupled with low interest rates, and a recovering job market may finally spur people to jump into the housing market this year.  As reported in the Wall St. Journal,  ”The job market is getting better and that will make people feel more confident about their income-earning prospects,” said David Berson of the PMI Group. “You need that confidence to buy a house. Household formations are also very important. …”

As I’ve tried to communicate for years, among the doom and gloom… the hype and the celebration, it’s important to look at individual markets, not just the “national market”. In fact, there really is no “national market” for real estate.  No one moves to the US with an open mind to living anywhere within the “national market”.  People move and live in well-defined markets, each with its own specific set of market dynamics, economic structure, geography, and a myriad of other important attributes.  Case in point, the Lamorinda real estate market has behaved MUCH differently than the “national market”. Let’s take a look.

Whereas the “national real estate market” numbers were horrible for February 2011, the Lamorinda market saw the following… inventories decreased by 8% over February 2010; closed escrows (sold) increased by 4.3%; and the number of homes going into escrow as “pending” sales increased by a whopping 38.7%.  These statistics don’t even remotely mimic the national look.  Case closed! Don’t apply what the media says about the “national market” to our local Lamorinda real estate market.

So, are there steep discounts in the market?  On a historical basis, the answer is an unequivocal “YES”.  Even with all of the activity in Lamorinda during February, the median home price rose by a mere 1.7% over February 2010… one of the weakest months in recent years.  In fact, for those of you who still remember a few years ago when you barely find a habitable home in Lafayette or Orinda for under $1M, the median Lamorinda home price for February 2011 was a mere $836,000 !!

Stay tuned for next time when we’ll dive into the market and really take a look at where the action is.


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2011 Lamorinda Real Estate… Hitting Bottom and On Its Way Up?

9 02 2011

If we assume that Lafayette real estate and the surrounding Lamorinda real estate communities mimic the overall trends of 47 other national markets, we have officially hit bottom.   Moody’s Analytics tracks the ratio of median home prices to annual household incomes in 74 markets. Based upon that data, the affordability of housing has now returned to or surpassed the average reached between 1989-2003 in 47 of those markets. Most economists believe the housing boom took off in 2003.  ”Based on incomes, this is as affordable as it gets,” said Mark Zandi, chief economist at Moody’s Analytics. “If you can get a loan, these are pretty good times to buy.”

Naturally, it’s not all good news.  The price declines are leaving more borrowers underwater, or in homes worth less than the amount owed.  As reported in the Wall St. Journal, nearly 27% of homeowners with a mortgage were underwater at the end of the fourth quarter, up from 23.2% in the previous quarter.  The statistics for Lamorinda real estate aren’t nearly as ominous, but the financial distress sales will have a bearing on 2011 prices… likely keeping them moderated this year until such time as this inventory makes its way through the pipeline and gets cleared in the market.

With all of this said, there is clearly a sense of energy that I’m hearing from our buyer clients and from other real estate agents in our market that I haven’t felt in years.  As an example, we placed a home on the market yesterday in Lafayette and had 6 showings by agents during its first day on-market!    It was almost reminiscent of 2005-6 when agents would be seen calling their clients from homes on the Brokers Open, telling them to start baking cookies for the seller and to bring their checkbook!  I don’t think we’ll see anything that approaches that behavior for a very long time, but it certainly was a nice way to kick-off the official post-Super Bowl real estate season!

Would you like to see the video presentation of the Lafayette home that received 6 showings during its day on-market?  Here it is:

3620 Madrone Drive, Lafayette

 

 


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More Predictions for Lamorinda Real Estate and Beyond for 2011

7 01 2011

If the calls and emails this week are any indication of what 2011 is going to look like, it should be a busy year in real estate.  Having weathered 2009 and 2010 without too many lasting scars, the question in my mind and everyone else’s seems to revolve around what to expect for the year ahead.  Will the market be much of the same… a little stronger or perhaps a little weaker?  One thing for sure, it’s way too early to tell.

With that said, it’s always interesting to hear from the “experts”.  As one of my Cal Berkeley professors once said, “If you line up all of the economists in the world, they’ll all be pointing in different directions.”  Well, the same may be generally true for the so-called real estate “experts”.   Let’s take a look at an article that just appeared in the LA Times, “When Will Housing Come Back In California?  Five Experts Offer Their Views.”

  • Richard Green, director of the USC Lusk Center for Real Estate, predicts home prices will remain flat in 2011. Professor Green suggests drawing a line on the map from El Centro to Sacramento, and then states that all of the areas along that line will unlikely ever see their peak prices again in his lifetime.  Dr. Green’s academic credentials are impressive, but the USC website doesn’t give his age, or the dates of his degrees.  Based solely on his photo, I’m guessing he’s got at least another 20+ good years left, so his prediction for the central valley housing market is a strong statement of its condition.  On the other hand, Dr. Green states that the recovery will be all about “location”.  He goes on to say, ”Now, places like La Jolla, Malibu, Laguna, Huntington Beach, Atherton, Palo Alto, the city of San Francisco, Marin County, those are places where within the next five years I could easily imagine prices returning to their peak.”  He doesn’t mention Lamorinda real estate specifically, but perhaps he might include us in the Bay Area market areas specifically noted.  I think that one of the most important quotes from Dr. Green is the following:  ”The more a property is a commodity that you can easily substitute for something else, the less the chance it will ever come back to its peak. The rarer a property is, the more likely it’s going to come back quickly.”
  • Leslie Appleton-Young, chief economist for the California Assn. of Realtors, predicts home prices will rise 2% in 2011. Well, this may not win me any more friends within the inner circle of the CAR, but I think Ms. Appleton-Young is a bit off-base with her prediction.  I was also one of the many who shook my head on the sidelines as I saw the market begin its dip, yet the CAR and NAR (National Association of Realtors) economist continued to predict relatively strong housing markets.  Both organizations do a lot of good for the industry, but I think their economists are a bit too tightly tied to the trunk of the tree to be objective.
  • Bruce Norris, president of Norris Group in Riverside, expects home prices to fall 5% in 2011. Well, I’ve never heard of this person, and he’s from Riverside where no one with a sane mind would choose to live.  Gosh, I hope that my oldest and best friend who is a physician in Riverside doesn’t read this post!  If I lived in Riverside, I’d be pessimistic, too.  Maybe he’d prefer to buy some Lamorinda real estate. In all seriousness,  ”You’ve had a slew of programs trying to prevent inventory from showing up, and that prevents reality from happening,” Norris said. “It’s definitely standing in the way of the natural process.”
  • Emile Haddad, chief executive of FivePoint Communities Inc., expects home prices to “stabilize” in 2011 but declined to make a specific price prediction. Haddad used to be the Chief Investment Officer for the large developer, Lennar.  In case some of you haven’t followed the tales of Lennar, they went bankrupt principally on betting long on the central valley real estate market… Sacramento, Elk Grove, etc.  I’m sure Haddad has learned a few things since past mistakes.  He states, “We are bumping along the bottom, and that is a good thing, because that is the first thing that you need in order to start seeing a housing recovery.  He goes on to say, ”Affordability is something I look at, and obviously that is a very attractive metric right now…. There is a value proposition out there right now that is very attractive, that we haven’t seen in four decades.”
  • Christopher Thornberg, founding principal of Beacon Economics, predicts home prices will remain flat in 2011. Once a senior economist for the UCLA Anderson Forecast, Thornberg was one of the first to predict the housing crash, pointing to prices that were way out of line with what people earned.  In that vein, he views the plunge in home values as its own recovery of sorts “because that is when prices went from stupid-high levels to levels that made sense again,” Thornberg said. “Now we are in a post-recovery recovery, if you will.”

Now that the experts have spoken, I’ll leave the Lamorinda real estate interpretation up to you.  Personally, I’m in the “bumping along the bottom” camp, and agree with Dr. Green that desirable parts of the Bay Area could see their way back up within 5 years, albeit I don’t see us hitting our highs within that time frame.  Let the game begin.


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Watching the Lamorinda Market in 2011

5 01 2011

As an avid and bit compulsive market watcher, I’ll be following a number of elements in the 2011 market in order to gauge its health and provide informed counsel to clients.  One of the most obvious, but often overlooked indicators of market health is the relationship of supply and demand. Ultimately, this relationship reflects the state of a given market, and drives the direction of prices.

Instead of looking at the number of months of inventory there is in a given month, I tend to prefer looking at “absorption rate” — the relationship between total inventory and the number of homes that hasvegone pending.  This provides a true indication of demand in a given month, and may have a carry forward effect to future market performance. The official MLS numbers for December 2010 have not yet been released, however November was a very strong month for Lamorinda. With 50 homes pending against a total Lamorinda real estate inventory of 154 homes for sale, the absorption rate of 32.5% was the best monthly performance of the year!  It surpassed November 2009 by approximately 11%.

A timely Wall St. Journal article discusses “The Four Housing Issues to Watch in 2011“.   Succinctly, they are:

  • Jobs: This is so obvious it barely is worth mentioning.  If people are unemployed or unsure of their employment status, they aren’t going to buy a home.  One of the things not reflected in the employment numbers is the large number of people who have become self-employed — building new businesses, doing consulting, or other revenue generating activities that escape the official reported numbers.  This is much more common in the bay are with our tech innovation, and may be a factor in contributing to improvements in our local economies that are not yet reflected in official government reporting.
  • Foreclosure delays: Some lenders have suspended foreclosures due to possible technical errors in bundling and selling mortgages.  If foreclosures are more difficult and expensive to process, banks and investors could step up bulk sales of loans or foreclosure alternatives such as short sales.  The quantity of homes being held back in “shadow inventory” is important to the health of the market, prices, and ultimately when we see more normalization.
  • Washington: There are lots of variables here.  The administration wants to see Freddie and Fannie, as well as the broader mortgage market remade.  The mortgage interest deduction will certainly see some debate this year, although most feel that it will remain largely in place.  Will policy makers seek to be more aggressive with measures that will put pressure on lenders to rework mortgages to forestall some foreclosures?  Finally, if we really do enter into a double-dip housing downturn on a national level, then we may see some quick action out of Washington to shore up the market via tax credits — similar to what we saw in 2010.
  • Lending standards and rates: Fanny and Freddie are dominating the mortgage market with 9 out of 10 mortgages backed by them.  Policy makers could make room for more private lenders to enter the market by scaling back the expanded “conforming loan” limits in fall of 2011.  If rates rise this year, we’ll see greater pressure on prices.

As we forge through the first week of our new year, it seems like we are seeing a healthy balance of buyers and sellers in the market, and the couple of lenders we’ve talked to say they are getting lots of calls from people wanting to get pre-qualified for loans.  All-in-all, a good start to the year for Lamorinda real estate!


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Lamorinda Real Estate — A Look Back and a Look Forward Into 2011

30 12 2010

Emerging from the dark catacombs of the 2009 recession, we all began 2010 with uncertain expectations about the local real estate market.  The Lamorinda real estate market was propelled in 2010 by our most affordable housing inventory – principally homes in the $800,000 – $1,200,000 price range.  Much of the demand for these homes was artificially stimulated by the first-time buyer tax incentives that were in place during the first four months of the year… in many cases, simply advancing purchases that otherwise might have been made later in the year, or perhaps in 2011.  Most of 2010 saw our market running with about 2-6 months of inventory throughout the year – computed by dividing closed sales for a given month into the total number of homes available.  This segment finished 2010 by seemingly reaching a plateau of about 4 months of inventory over the closing months of the year.

The upper end of our market, homes priced at $1.5M+, performed much differently in 2010.  Tentative at first, we actually saw a very encouraging month of activity in April of 2010 when one in seven homes priced at $1.5M+ sold.  In fact, there were six homes in the $2M+ range within Lafayette that sold in April.  We were encouraged, and hoped that the memories of a very challenging 2009 were fading into the distance.

Unfortunately, it didn’t play out as we had all hoped.  Europe’s economy hit the skids in May, US GNP numbers were weak, and employment numbers were disappointing.  We weren’t out of the woods.  Federal support that underpinned the lower end of the market through the tax credit was gone.  The “shadow” inventory of foreclosure properties was a “wild card” variable, and it appeared the housing recovery would be a much longer road than many anticipated.   At its most advantageous point of supply/demand for sellers, the “upper end” of the Lamorinda real estate market dropped to about 4.5 months of inventory in August, but finished 2010 at about 15 months of inventory.

The #1 question we are asked is, “What will the 2011 Lamorinda real estate market look like?”  The economy certainly seems to be showing slow signs of recovery, reflected in the recent run-up in the stock market.  American corporations have learned how to run more efficiently, and many are now benefiting via greater demand for our exports by virtue of a cheaper dollar.  Regardless, the benchmark of economic progress for most people is the employment numbers.  Without substantial, long-term gains in employment, we are not going to see meaningful improvement in the US housing market.  It’ll just sort of bump along until more people can afford homes.

Another variable involves financial distress sales – short sales and foreclosures.  How many will hit our local markets in 2011?  Will the banks liberalize their loan modification policies forestalling some potential financial distress sales?  There are many unanswered questions that simply cannot be answered at this juncture in time.  Recently reported in the Wall Street Journal, the latest S&P/Case-Shiller home index is not encouraging.  It shows that home prices have dropped nationally for the third straight month in a row, suggesting a “double-dip” in housing prices. Proving that it’s foolish to make generalizations, the San Francisco bay area market, (a composite index), was one of only four market areas that showed year-over-year  improvement from October 2009.

We believe that by the end of 2011, we’ll see stabilization in our housing market and reductions in inventory.  The Lamorinda real estate community is rather well-contained, without the present or future ability to build significant new inventory.  It is well-placed geographically within a balanced area of business diversity, close proximity to major transportation corridors/rapid transit, and with an excellent educational system.  The national business climate is improving with encouraging retail sales numbers, manufacturing expansion and growing optimism among business leaders.  This community is well positioned to benefit from these economic trends.  Missing so far is major improvement in employment numbers which is critical to a sustained housing recovery. We are fortunate to have not sustained as hard a fall as some communities, and we believe that we are well positioned to be one of the first areas to rebound as the economy heals.  For buyers, there will continue to be strong value propositions in 2011.

 


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Emerging from Summer — A Look at the Lamorinda Market

9 09 2010

Although some would suggest that with this year’s weather, we never had a summer.  We have, indeed, just emerged from the summer real estate season and the market statistics have just been officially published.  Let’s take a look.

It is encouraging that we saw some absorbtion of inventory in August, either through net sales activity or withdrawal from the market.  The number of months of inventory across the entire market stands at almost 5 months.  Let’s drill down and look at the various segments to get a more detailed look, beginning with the sub-$1M market:

As we’ve seen all throughout this market cycle, the sub-million dollar market is very strong as numerous young buyers have seized the downturn and record low interest rates to get into our community at price points that haven’t been seen for many years.  There is about 4 months of inventory in this segment, however about 30 percent of available inventory went “pending” during August — a very good showing of strength.

Moving up market, let’s evaluate the $1M-$2M segment:

With just 3.7 months of inventory, this has been a very active and relatively healthy market segment in Lamorinda real estate.  With a forward view, approximately one in four homes went “pending” in this segment during August.

Let’s now look at the Lamorinda upper-end market at $2M+:

The graph speaks for itself.  It is the most challenging area of the Lamorinda real estate market with 9 months of inventory — a net reduction from July due to several homes being taken off the market by their owners.  August showed some encouragement with about one in five homes going “pending” during the month.  It is a segment that we know and understand well.  One of the three homes that sold in this segment was our listing, and we are well aware of the limited pool of buyers and their expectations in the present market. 

Looking ahead, there are some encouraging economic indicators, reflected in this week’s stock market performance.  There are  also outstanding variables that could have a very positive impact on the economy and consumer confidence — proposed acceleration of capital equipment write-offs for business, as well as what might end up being the extension of the “Bush” tax cuts.  There’s a lot at stake in the coming months.  Markets can turn quickly, and we never know we’ve hit bottom until we’re on the ride up.


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Categories : Lamorinda Housing Market, Lamorinda Real Estate, Lamorinda Real Estate Market Statistics

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