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
