If the activity in my office is an indication of county activity, then we appear to be heading in the right direction. Happily, I have been very busy these last five months, as have most of my office colleagues.
Although numbers never tell the complete story, they are good. The 209 home sales in November are a 53% rise from the dismal 160 sales in November 2008. Even though they were down from the 237 sales in October, this can largely be attributed to the seasonal slowdown from Fall into Winter. What’s really a positive sign is that November actually outdid September, which had a respectable 199 total sales.
This is not to say the housing market has turned around. There are still a number of potentially damaging scenarios that could have an adverse effect on this glimmer of a recovery that we are experiencing.
The most notable of the negative triggers is an expected wave of new foreclosures from defaulted homes. These are homes held back by banks amid pressure from WashingtonD.C. to work with distressed homeowners. If you’ve been following the news, instead of using the federal money to make loan modifications easier, most of the banks have held on to the cash as security against default. Modifications are no easier than before, and the time it takes has not been streamlined in the least. Bad as that sounds, this glut of foreclosures is not a foregone conclusion. While there may still be an abundance of foreclosed on the books, it is not in the banks’ best interest to flood the market, an action that would simply depress the prices even further.
Add to the foreclosure scenario a secondary bit of bad news: the lagging sales at the high end. The slow sales above $1,000,000 has created downward pressure on the average sales price, the result being that the once invulnerable neighborhoods of southern Marin are feeling the pinch.
Even with the distressing tone of the previous two paragraphs, there is the good news. I need to drag out that word “optimism” again. I’m not sure if realtors feel it sooner than the rest of the populace because we track the numbers more closely, or simply because we have to feel it in order to survive. Whatever the reason, we are certainly feeling more bullish at the moment.
Looking at the key indicators of Sales Activity, the numbers are red hot. Marin is almost edging into a Sellers market with 35% in contract, albeit only at the lower price points. Meanwhile, Novato and San Rafael are still on fire with 49% and 40% in contract respectively. Add to that a glimpse at December and the numbers are even better
Down the road? First-timers still looking aggressively for that first home at a great price; people wanting to stay ahead of interest rates. Interest rates…Now that’s a topic on its own. What happened to the rise we were expecting at the end of the summer and into the fall? It never happened, There were bumps, but they were momentary, and then the rates settled back down. The only explanation is that the Federal Reserve, under pressure from Washington, is keeping the rates down as long as they can in the hopes of getting a robust revival in the market. We may even be starting to see it, with the first rises in the rates of new construction. While that doesn’t affect Marin as much, we do benefit from the residual effects of the gradually improving confidence. However, with rates at near-record lows, they can’t stay there forever. Buyers: If you want a house below $750,000 and it’s priced well, you might have to fight it out. On the other hand, if you’re above that mark, you can wield some significant leverage, providing you find the right home. Sellers: if you need to sell a home and you’re willing to let go of that unrealistic pricing from 2006 and get aggressive, there are serious buyers out there. If you don’t need to sell right now, relax and wait, even though you might not see any real rise for a while.
