After almost 4 years: Rebound!
Is a seller's market returning?
Oh, my! We're seeing rapidly changing conditions in our local real estate markets! Reports from around the Bay Area show quite remarkable changes. The term "multiple offers" is back again in a big way! Buyers seem to have surmised this might be the "bottom" of the market price-wise, that the economy may be perking up and are pleased interest rates are still at amazing lows. Some of the national press are noting improving conditions in other parts of the country and there are lenders who are rumored to be loosening credit.
However, there's two problems! The first is, where is the inventory? Demand right now is way up and supply (inventory) down. That is signaling a transition from a strong buyer's market to signs that a seller's market is starting to appear. Let's hope that sellers realize this and decide to enter the fray. That should give buyers more to choose from and sellers may have a window of great opportunity to take advantage of increased buyer demand.
Locally, the low inventory has caused the market to really heat up. One local agent shared that there were 7 offers on one listing and 3 on another, 6 offers on another listing, and 3 coming in on even another! Prices are affected by the competition and often are going over asking (sometimes by a large amount) although not always.
Reports show multiple offers are also plentiful in many other parts of the SF Bay Area, including Marin County, San Francisco, the Peninsula, and Alameda County. Some buyers are waiving contingencies (not recommended) and others are paying cash to avoid appraisal issues in order to be more competitive in multiple offer situations.
The other problem, yes, is appraisals! Appraisers are looking at their comps over the recent months and can be very slow at understanding this rapid turnaround in market values. This market calls for very good negotiating skills, in-depth market knowledge to support the values, patience, creativity and persistence!
Local Market Activity: March 2012 & March 2011 Single Family Detached Homes
Some communities are starting to see increasing closed sales, some seeing prices moving up. All 15 surveyed communities showed increasing numbers of pending sales compared with last March. Pending sales are always a leading market indicator. If our hot market conditions continue, we will most likely see increasing prices in other communities also.
Here's the Big Story:
Above shows both February and March. Note the decreasing inventory in every
community surveyed compared with
the same month last year
Bank Properties represent the number of bank mediated properties.
There may be other foreclosures or short sales that were not reported to our MLS and therefore not included in these calculations.
According to DataQuick Information Services, "Foreclosure activity remains high by historical
standards but below peak levels reached over the last three years..." in the SF Bay Area.