It's Raining Money, Hallelujeh!

I say it all the time to my clients, but I want to make sure I pass the information along here too: The East Bay Municipal Utility District will pay you, yes I said pay you to upgrade your old, ineffiencient, water and energy-wasting appliances and systems.

They operate a rebate system where you may receive several hundred dollars for changing out your toilets, clothes washer and even landscaping, and replacing them with models or systems that incorporate water conserving elements. Go to their website now and read about how you can reduce your water use and maybe even your utility bill!

By the way, EBMUD is an amazing resource in other ways: they offer free water-saving devices like low flow shower heads and faucet aerators, just because you ask! Are you a teacher, or would you like your child's school to incorporate conservation education into their curriculum? Visit this page to learn about the classroom materials and school garden programs they offer.

I could go on, and I will (but later!), about everything you can find on the EBMUD site that will make your conservation efforts at home easier and your utility bills a little smaller. I hope you learn that when you take a few simple steps to actively conserve our natural resources, you feel good about it, and pass the information along to friends and colleagues.

Coldwell Banker Weekly Market Watch

August 19, 2007

Larry Klapow, Coldwell Banker Northern California President says:

This will be a brief report due to a holiday week and the fact that I was on vacation.

Media reports regarding the condition of the mortgage industry continue to have a confounding effect on buyers. Some potential buyers aren’t even attempting to qualify for loans for fear of rejection, or because they are simply confused by what the media is reporting and think that loans don’t exist any more.

The reality is that credit tightening has only affected a very, very small percentage of buyers. The fact is that they could be missing a good buying opportunity by waiting, or not trying to qualify.

Savvy buyers are recognizing that working with a solid, well-capitalized multi-source lender, such as our partner Princeton Capital, allows them to remain educated and helps them to enjoy a successful real estate transaction. This remains a great time to buy a home, and working under the guidance and expertise of a top-notch lender provides the buyer with the chance to leverage the many opportunities now available.

In areas of the East Bay and North Bay, sellers are beginning to lower their listing prices meaning that there are bargains to be had. In other areas, multiple offer situations and tighter inventory render it absolutely crucial for buyers to be working with a strong, solid lender.

Traditionally, this is vacation time. The kids are getting ready to go back to school, and things slow down a bit in the housing market. While our offices witnessed a slight dip in activity overall, many were surprised to see that our more than 500 open homes were well attended by potential buyers.

San Francisco and much of the Peninsula continue to enjoy multiple offer situations and homes that are selling for as much as 20 and 30 percent over asking. Inventory levels do continue to impact both areas, however an influx of fresh homes after the Labor Day weekend should help mitigate their tight inventory situation.

Buyers have more leverage right now than they have in years. Armed with good credit, a Coldwell Banker sales associate, and an expert multi-source lender like Princeton Capital, right now is the ideal time to consult with the experts, and buy that dream home.

Have a great week!

From the Mouth of the Money Man: Interview Part 2

"...guidelines have been changing daily, and banks have been closing weekly."

How does it affect current sellers?

"If a seller is reviewing an offer with a buyer’s pre-approval, it is a good idea to get a second opinion from not only the realtor, but also a loan consultant. As for the buyers, they should call me (chuckles) to get a pre-approval. Sellers should always have the offers with a pre-approval double checked, especially if the offer is less than 10% down.”

Why is that?

“Because many programs that require less than 10% down payment that are no-income qualifying have disappeared in the last month.”

And what is a no income qualifier?

“A no income qualifier is when the lender doesn’t require income verifications such as w2’s, pay stubs or full tax returns.”

Why is it important for buyers to be pre-approved prior to writing an offer?

“Lender approval means a true pre-approval, not a “pre-qualification”. “Pre-qualified” means nothing has been verified, “lender approved” means income and assets have been verified and the loan is pre-approved, the only condition is to find the house and have it appraised.”

Should buyers be afraid to be buying in a market like this?

“Absolutely not. Conforming loans (under $417K) are aggressively priced, and current values are perfect for buyers."

Our Coldwell Banker President has this to say:

Coldwell Banker Weekly Market Watch

It has been an interesting week! The market reacted to the tightening of credit in the mortgage industry and the resulting stricter qualification criteria. Therefore, it is imperative to thoroughly review and understand the financing qualifications and terms for each potential home buyer. In order for any transaction to be closed successfully, buyers will require a real estate professional that is fully informed, knowledgeable and able to provide expert guidance as it relates to the financing aspects of the transaction. It is also important to ensure that buyers are working with a well-capitalized, established lender such as our partner, Princeton Capital.

In the Bay Area, the start of August shows numerous bright spots in what is traditionally a slower month for real estate sales. Many areas have seen an increase in activity as sellers have adjusted their pricing, and for qualified buyers this remains an excellent opportunity to invest in some great real estate deals. Working with an experienced Realtor® remains the savviest means for buyers and sellers to navigate the muddy mortgage waters. As one Sebastopol agent succinctly put it, “they need us more than ever.”

In Sonoma County open houses were well attended and there are reports of a few multiple offer situations. In general the market is holding steady with inventory continuing to build slowly. The Marin market remains mixed. The high end continues to outperform the lower priced properties. Mill Valley and Corte Madera are well into seller market territory for well priced and attractive properties. San Rafael and Novato are indicating more of a balanced to buyers market this past week. The East Bay markets remain stable from last week with price reductions showing good results on existing inventory. The Fremont, Livermore and Tri Valley areas are showing inventory building. The high end is performing well and well priced properties are needing aprox. 60 to 90 days to see offers.

For sellers, pay close attention to the intended financing as offers come in. For buyers, there are still a lot of options for financing and some excellent deals out there if you do your homework. Now more than ever, having a well educated agent is the essential first step in the process.

A Weekly Update from My Boss

Here's what Larry Klapow of Coldwell Banker has to say:

Coldwell Banker Weekly Market Watch

July 29, 2007

An island of good news appeared this week in a sea of negative media regarding weakness in the housing market. The National Association of Realtors' pending home sales index jumped five percent to 102.4 in June.

The index was created to be a more forward-looking snapshot on home sales than NAR's existing home sales report, which charts sales at the time of closing. The pending home sales index tracks when a sales agreement is signed, generally a month or two ahead of closing. The nationwide report is good news in that it indicates that home sales could see an increase in coming months.

In the Peninsula and San Francisco markets, the tighter inventory levels are creating pent-up demand among potential buyers. In Palo Alto, multiple offers on one property went up to 26. Another transaction closed in less than one week for a $16 million property. In San Francisco, a home in the West Portal area listed for $999,000 and received eight offers.

Considering that our more than 500 homes held open last week saw a surprising amount of traffic in most areas, it could be that those buyers who are unable to move into to the City or the Peninsula communities are starting to look in areas with more available inventory and a wider selection. In the Tri-Valley area, higher inventory is starting to level off while pending sales have remained relatively steady. Walnut Creek notes an increase in the number of entry level and mid-range priced homes sold. A small Richmond home and a Berkeley property each received nine offers.

In the mortgage arena, the media continues to hammer us with bad news. Since when is needing documentation, a decent credit score and perhaps a down payment a bad thing? The lenders are attempting to get back to where we once were and clean up years of sloppy practices. This is not a liquidity crisis that the media would like to make it out to be. The fact is that the fundamentals of the housing market are still strong. Interest rates are still low and we have a decent economy and job market. The stock market took a haircut last week but is still very strong when you look at the whole year. In the upscale sector there continues to be great demand. For the starter and median price ranges, the market and buyers are going to need to adjust to new lending standards. If you are a seller in this sector now, get the price right the first time or reduce if needed because we will be dealing with media shock and an adjustment period for a while.

We Want Richmond View!

Just a quick note about what's happening in Richmond View this week: the home at 1826 Ralston Ave is receiving 7 offers today. Is the market cooling off? Not there. This property gained alot of attention in the past few weeks because it was a classic mid-century design in need of easy updating, and everyone loves a moderately priced easy fixer.

How to explain other moderatly priced properties in easy move-in condition lingering on the market? This is where the market feels unpredictable.

Hungry?

Well, our own vegetable gardens may not be producing anything edible yet (I should only speak for myself here), but fortunately someone has been thoughtful enough to grow some food for us so we don't starve, and it's out there at a local farmer's market, ready for our frying pans. Really, there is no good reason to buy a flavorless, mealy tomato from a giant food mart when you can find a place to buy fresh, locally grown food any day of the week, close to home. Besides fresh veggies, you will often find a variety of other goodies: hot prepped meals, local artisans & live entertainment; call a friend and make a date! -And just when I thought I'd have to compile the list of resources myself, I discovered this list, from SF Gate, an online version of The San Francisco Chronicle. Use this list to find a farmer's market near you.

Anyway, Back to Real Estate Updates

Another bit of weekly wisdom from our Coldwell Banker President:

Perhaps the long Memorial Day weekend gave both buyers and sellers the opportunity to reconsider their standoff positions. Sellers are starting to price realistically, and buyers are starting to write more reasonable offers, as evidenced by the fact that sales activity increased significantly during the week in most areas.

We held almost 400 homes open during the week and, while the lower-than-normal attendance level was anticipated, the conference rooms of most offices were busily engaged in negotiation and the closing of deals.

Still, the Bay Area market continues to be predictably unpredictable. In most areas, it is neighborhoods, schools, locations and streets that are generating the interest and buyer activity more so than the actual homes themselves. Berkeley, Oakland and El Cerrito saw multiple offers on homes in all price points. The Mission San Jose area of Fremont saw 10 offers on a listing that sold for 10% over list price. In San Francisco, two properties in the Sunset district received 11 and 22 offers respectively. An open house held over the holiday weekend by our Livermore office had 80 people through and sold with multiple offers after being on the market for six days. In Kentwood, a $3.95 million listing closed for $5 million after nine offers. Condition, price and presentation are, of course, crucial to a timely sale, however they are less important in highly desirable areas, or if the buyer perceives value.

In most areas we are still dealing with a split market. The high end is performing quite well while the first time home price ranges prove to be more challenging. You have heard it many times before but it is up to price and condition. Your property needs to be the best price in it’s class and show well also. Buyers in the entry level price range are definitely bargain shopping. As the old saying goes, if you want the property to sell fast, make it easy to buy. Instead of just using price reductions, you may want to look at offering other terms like closing cost assistance to make the property more attractive to buyers. As we start to move toward summer and schools let out, it will be interesting to see if this brings more buyers to the market. The economy looks strong and a recent report shows unemployment at very low levels. It takes jobs and increasing wages to keep prices moving up over time. The California affordability index sits at 25%, up from a recent 14%. This is due to price decreases in outlying areas but good news none the less.

Of the offices reporting, listing inventory remained steady for 16, increased for five and decreased for eight. Sales activity remained steady for 9 offices. It increased for 13 offices, and decreased in only seven.

Larry Klapow
President
San Francisco Bay Area