Fall 2011 appeared to show a trend that had me holding my breath. When compared to the same months from fall of 2010, all three months of fall showed increases in the number of sales, with the biggest jump happening in November. Dare we believe that this is the beginning of a sustained turnaround? Maybe, but it’s really too early to tell.

Starting in September, single family home sales rose 7.1% compared to September 2010, but prices came up flat, dropping a nearly negligible 1%. Condo sales heated up with a big spike (21%), offset by a sharp drop in prices (24%), once again due to the prominence of short sales and foreclosures.

October was slightly better than September, with fractional increases in number of sales and prices for single family homes, counterbalanced by more of the same for condos, namely a big increase in sales and another drop in prices.

Finishing up the quarter in November, while the number of sales continued to increase for single family homes (10%), the median price stalled and fell 11%. Condos, on the other hand, did well in both categories, with sales rising 22% and prices moving up 8%.

If we take a step back and look at the three fall months as a whole, a number of things begin to stand out: buyers are starting to get off the fence in growing numbers, but foreclosures and short sales continue to bring the prices down.

You’ve heard this before, haven’t you? Distressed properties (mostly condos) push prices downward, which in turn fuel a big demand among investors and first time bargain hunters. Single family homes are certainly on firmer footing, but the skewed condo sales exert a continuing drag on the county’s overall prices.

Many of the “experts” say that the market for high end properties is determined by consumer confidence. Looking at the nation’s economic woes, you’ve likely read that large businesses are holding loads of cash, uncertain of where the economy is headed; well, so are the higher end home buyers. They may want to buy, but they’re just not willing to take a risk and spend quite yet. And so, while investors are continuing to move funds and purchasing homes for rental

properties, without similar moves in the high end segments of the market, we just won’t see any significant move upwards in prices. History repeats itself: when markets are scraping the bottom, the savvy investors are less afraid to jump in order to reap the eventual rewards, while in a booming market that same investor puts a cap on greed and gets out with a profit before the inevitable cycle begins to reverse itself and point downwards.

Result: there are very few homes for all those motivated buyers to buy. If there’s a positive, I suppose it’s that there’s going to be some upward pressure on prices. The negative, for buyers, is that there’s nothing new to choose from, which will certainly keep some buyers out of the market because they just can't find what they’re looking for.

To finish off this edition of my market update is this very interesting Bay Area fact, something that should make all of us homeowners with a bit of equity in their homes sleep better at night: the median price for a foreclosed property is 16% lower than the median for a short sale, which in turn is 43% lower than the median for a home with equity in it. So when you see that foreclosed home for sale in your neighborhood for a price that makes you want to gag, it does not mean that your home has a similar value. Makes sense? I hope so.

Predictions? None. December looks pretty good so far, but Decembers and winters as a whole are never really indicators of larger trends. But even as we sit astride a market uncertain of which way to go, there are always opportunities, so if you come across a friend or acquaintance who needs a realtor, whether to buy or sell a house or who simply wants some detailed information about the market or their own home, please give me a call and I’ll help them out!

 

 

 

Eduardo Gutekunst is a Marin County Real Estate agent and works for Frank Howard Allen Realtors, the top Real Estate Company in the area and a county fixture for nearly 100 years. Eduardo is about as native to Marin County as one can be, having first moved to the county from San Francisco when he was two years old. He has lived in Marin County all his life, and is familiar with its history and its communities ever since he was a child here in the 50’s. There’s hardly a nook or a cranny he isn’t familiar with, and he has walked or biked through most of its parks and open land. If you’re looking to buy or sell real estate, or you’d like to find out just about anything about Marin, give Eduardo a call. He’s available any day of the week. Try him at Frank Howard Allen’s San Rafael office, 415-258-4115, or give him a ring on his cell phone 415-939-2308.