Glen's East Bay Housing Numbers Through September 2010
October 6, 2010 by Glen Bell · View Comments
The September East Bay Housing Numbers are in and inventory continues to rise in Contra Costa and Alameda Counties as sales remain sluggish.
• We have seen a 114% increase since the beginning of the year on the amount of homes that are now for sale. Typically, we see a drop as the summer ends.
• Pending sales, (homes that have gone into contract), are on the decline, down 22% since 4/30/2010, (the federal and state incentives deadline).
• Sales are down 8.5% since the end of May.
• Months supply has increase from 1.7 months at the beginning of the year to 3.8 months now.
• Finally our Pending/Active Ratio of .78 now indicates that we are, on the whole, back in a “buyer’s market.”
This week I wanted to bring in some recent news sources to help make some sense out of what we’re seeing here in the Bay Area.
1) CAR (California Association of Realtors) released their 2011 California Housing Market Forecast on Oct 4, 2010. They forecast that we would see a small increase in sales and median price for California in 2011 at 2% each.
Here’s a quote from their article that I felt was very relevant;
“The situation in the California housing market continues to be a tale of two housing markets,” said (C.A.R. President Steve) Goddard. The segment of the market under $500,000 has been driven by distressed sales, while higher-priced areas of the state have been constrained by restricted financing options, and increasingly have experienced an increase in the number of distressed properties. Sales in the low end have been constrained by a lack of inventory, putting upward pressure on prices. Multiple offers on lower-end homes have been very common, according to Goddard.
“A lean supply of available homes for sale will drive prices up at the low end, but larger inventories and limited, less attractive financing will cause continued softness at the high end,” said Appleton-Young. “There’s some indication that lenders will accelerate the number of foreclosures coming on market, further adding to the housing supply, but we do not anticipate that lenders will flood the market with distressed properties,” she said.
2) From another article found in the Wall Street Journal blog yesterday, by Dawn Wotapka, titled “Housing Inventory Climbs Again in September;”
“Housing inventories, which typically dip as the summer ends, rose for the ninth straight month in September, indicating that sales remain weak as the downturn drags on.”
“More inventory is the last thing housing needs. Current sellers face a bleak picture: Despite record-low interest rates and falling prices, some home shoppers remain fearful of signing contracts as unemployment remains elevated. Those ready to buy may think that prices will fall further, providing little incentive to act quickly. Given tightened lending restrictions, others want to buy but cannot. Some sellers, meanwhile, can’t trim prices any further without selling for less than they owe. And the foreclosure crisis continues–and some banks have halted foreclosures, further gumming up the works.”
3) A final quote from a DQNews article, Bay Area Homes Sales Drop to 1992 Level; Median Price Slips Again;
“The magnitude of the sales slowdown suggests that, among other things, many would-be buyers are holding off for further price cuts, which would be most likely where an inventory spike meets slackening demand. The trick is to keep one eye on mortgage rates. If they jump, it could erase the benefit of a modest price drop.”
As always, I’m available if you want to talk about the market, or explore your options for buying, selling or investing in East Bay real estate. You can reach me directly at 510.333.4460.
You can also download the entire copy of Glen’s Numbers Through September 2010 here
Glen’s July East Bay Housing Numbers
July 9, 2010 by Glen Bell · View Comments
Here are the Glen’s Numbers for the San Francisco Bay Area as of June 30, 2010.
Normal seasonal influence has inventories continuing to rise, up 7.3% over the last month, and up a whopping 76% year to date. Also typical, we’re showing an increase in sales, up 15% over the last 4 month period. What is not typical is that pending sales have actually fallen 5.4% over the last month, and by a total of 10.3% over the last two months.
We would have to assume that in part, this was due to the federal and state incentive programs ending 4/30/2010. Fewer buyers are going into contract now. Keep in mind that the extension is only for buyers who were already in contract by 4/30/2010 allowing them to close at a later date. This will ultimately result in a drop in the number of sales in the coming months resulting in further concerns about the state of housing market here in the Bay Area.
The Month’s supply of homes that are for sale has increased from a low of 1.7 months at the beginning of the year to a 3 month supply now. The long range average for California is 7.2 months as stated by C.A.R. (California Association of Realtors). However, the San Francisco Bay Area tends to fair better than the rest of the state with a long range average considered to be closer to a six month supply of homes for sale.
This is in line with what we are seeing in the ratio between actives and pending. The ratio at the beginning of the year was at a high of 1.66, (low inventories with a high number of buyers going into contract indicating a stronger seller’s market). We are now looking at a ratio of 1.04. This is an indication that our markets are once again approaching what is considered to be “normal,” or what may be referred to as a state of equilibrium, or roughly having the same amount of buyers as sellers.
The question I would have to ask is whether we’re seeing an actual correction back to a “normal market, or are we seeing the beginning of a trend that will witness a move back to a slight buyer’s market with higher inventories and fewer buyers going into contract.
C.A.R.’s indication is that we saw our “trough” in February 2009 for the San Francisco Bay Area. Median prices have increased by 46.2% as of April 2010. Will we be seeing a “setback” in this “recovery?” Let’s see how this pans out in the coming months.
Update: Click here to download an entire copy of my numbers through June 30th
Glen’s East Bay Housing Numbers (through April 2010)
May 5, 2010 by Glen Bell · View Comments
April is done, the Federal Home Buying Tax Credit has finally expired and the latest edition of Glen’s East Bay Housing Numbers are in.
While there are no drastic changes to report, housing inventories in the East Bay have continued to climb and are up 54% since the beginning of the year. Even with that rise, we’re sitting at 2.6 months supply of homes for sale in the Contra Costa & Alameda counties. This is still well below normal inventory levels in the area and translates into fewer opportunities for buyers.
A flurry of activity prior to the expiring tax credit caused Pending sales to rise even faster, outpacing new listings coming onto the market by almost 2 to 1 over the last 30 days (592 vs 318). It will be interesting to see the effects of the expiring federal tax credit next month in the May report.
The Pending/Active ratio ticked upwards slightly from 1.28 last month, to 1.31 this month, which essentially means that we’re still in a moderate sellers market in the East Bay.
As for distressed sales, the percentage of REOs continue to drop, comprising only 15% of the active listings , down from 17% at the beginning of the year & 35% of the sales over the last 4 months, down from 37% at the beginning of the year.
The percentage of active & pending Short sale transactions also continues to drop. They currently comprise 28% of the active listings, down from 31% at the beginning of the year & 53% of the pendings, down from 59% at the beginning of the year. Closed Short sale transactions as a percentage of the total has increased from 17% at the beginning of the year to the current 20%
If you’re interested in talking more in depth about the East Bay housing market, feel free to call me directly 510-333-4460.
-Glen
Click here to download a copy of my East Bay housing numbers through April 2010
Glen's East Bay Housing Numbers (through March 2010)
April 5, 2010 by Glen Bell · View Comments
East Bay Housing Inventory Increasing.
For the third month in a row, we’ve noticed an increase in inventory. While this is normal for this time of year, the increase of nearly 46% is not; especially in comparison to the last 2 years. Last year we saw a drop in inventory over this same period of time of approximately 20%, while the year before was about even.
Although pending sales, (homes that are in contract) are also increasing, they are not keeping pace with the rise in inventory, (new homes coming onto the market). Months supply has increased from 1.7 months to a 2.5 month supply of inventory.
East Bay Housing Market Driven by Distressed Sales
What is significant is the amount of distressed properties that are still in this market. 57% of the sales in the last 4 months are distressed properties (37% foreclosures and 20% short sales). 72% of properties that are now in contract, (pending sales) are distressed properties, (16% foreclosures and 56% short sales). 47% of properties that are currently listed are distressed properties (17% foreclosures and 30% short sales).
This will vary from city to city, but overall, we’re seeing that distressed properties still play a large role in this market. However, fewer foreclosures have been coming onto the market. Short sales, on a whole take longer to close if at all. This is why we show so many as pending, and less that convert to an actual sale.
Trending towards Normal
There appears to be a developing trend. We seem to be swinging back to what would be considered more of a “normal market.” That is why the ratio between active and pending listings is dropping (from 1.66 to 1.28).
Typically, a ratio of one is considered normal, over 1 is considered a “seller’s” market, and under 1 is considered a “buyer’s” market. However, as you can see, this is not a typical market.
We may be seeing the beginning signs of a market stabilizing. Homes in the lower price range areas, especially in those areas that have taken the biggest “hits” seem to be reaching a “bottom” and are actually rising in some areas. However, with the weakness in the economy that remains, the jobs factor, and the increased number of homes that are in default, the housing recovery would appear to still be a long ways off.
If you’re interested in talking more in depth about the East Bay housing market, feel free to call me directly 510-333-4460
-Glen
Click here to download a copy of my East Bay housing numbers through March 2010
Glen’s Latest East Bay Housing Numbers
October 4, 2009 by Glen Bell · View Comments
Here’s a snapshot of the San Francisco East Bay Real Estate Market. I run these numbers monthly and have been tracking 38 cities since 2005. The spreadsheet indicates that inventories are still decreasing and are now at their lowest levels since I began this process (May 2005).
DOM (Days on Market) is decreasing, months supply in most areas have reached lows, and the relationship between what, on average, homes are selling for to list price support this. We’re seeing properties in many areas getting multiple offers and actually now, on average, selling at or above the average list price.
Areas that were hit hardest last year due to high inventories and downward pressure on prices due to the high number of distressed properties on the market, are now starting to see some recovery, especially in the lower priced areas. Examples would be in East Contra Costa along highway 4, (Pittsburg, Antioch, Brentwood, even Concord). More recently, in West Contra Costa in the San Pablo, Richmond, Pinole, Hercules areas).
Pendings have increased dramatically. However, this is due in part to longer escrow periods and a larger number of short sale transactions.
Call me if you’d like to chat more in depth about the San Francisco East Bay market.
-Glen 510-333-4460
Glen’s East Bay Housing Market Statistics for September ‘09
September 3, 2009 by Glen Bell · View Comments
- In some areas (San Pablo, Richmond, etc), the average sales price is exceeding the average list price.
- Inventory is the lowest I’ve seen since I started tracking inventory in July, 2005.
- Multiple offers are again the norm for well priced properties in desirable areas.
- REOs are becoming less of a factor, accounting for only 15% of the active listings, while accounting for 47% of the sales in the past 4 months.
East Bay Housing Statistics Show Dramatic Changes
May 5, 2009 by Glen Bell · View Comments
Local markets have been in transition for sometime in regards to REO inventory. However, it was a surprise to us on just how quickly the San Francisco East Bay market has changed in the last 30 days. Are we seeing the first signs of a market stabilizing? Are we hitting bottom in the San Francisco East Bay Housing Market? Some highlights on the attached ‘numbers’ spreadsheet.
- We’ve already addressed the influence that government and bank programs delaying the foreclosure process have had on new REO inventory coming onto the market. 2/3 of the sales since the beginning of the year have been REOs. Only 18% of Actives are now REOs. It’s obvious that this inventory is being depleted without replenishment.
- So what surprise has happened in the last 30 days? I’ve been tracking 38 cities in the East Bay over the past 4 years. I primarily look at two indicators, Months Supply and Pending Over Active ratios.
- Pending Over Active ratio relates to buyers and sellers. Basic Econ 101, Supply and demand. Actives (represents sellers), or properties that are still available, versus Pending (represents buyers), or properties leaving the market. That relationship often indicates whether we’re in a “sellers or buyers” market. A ratio of 1 (an equal number of Actives and Pending) is considered a normal market or in a state of equilibrium. Anything under (high inventory, few buyers), prices are flat or dropping. Anything above (low inventory, many buyers) is considered a seller’s market.
- The low point for the East Bay was October 2007, at .13 for the areas I track. A year ago we were at .39. We’re now at .98, near normal. The last time I saw a number this high was August, 2005.
- What’s really remarkable is the increase from .64 to .98 in just one month! I’ve never seen a jump even close to this in just one month.
- What is months supply? Basically, months supply is the ratio of inventory to sales. And what it tells us is how many months the stock of homes for sale would last, if sales continued at their current rate.
- A year ago we had a 9 months supply in this area. We’re now at 3 months. 6 months is considered normal or equilibrium.
- There are more multiple offers in areas. Offers are beginning to come in, on average, above asking in select areas.
- Markets are still very localized. Cities along Highway 4, were the ones that were hit first by REO inventories, showing the largest price reductions, and seem to be the first ones to be recovering. Antioch’s numbers even suggest a seller’s market.
- More affluent markets followed behind and are now appearing to have increased inventory pressure, kind of a second wave.
- One factor that may be skewing the numbers is that there are longer escrows now due to REOs and increased government loans.
- So, what does this all mean?
- With depleting inventory a lot more buyers have jumped into the market over the past 30 days. Investors are seeing opportunities, buyers are finding homes more affordable, interest rates are low.
- Is this market stabilizing? Maybe. Is this temporary with more REOs about to come onto the market? This will depend on what actions the government and lending institutions take in the coming months with foreclosures.
How To Buy a Bank Owned Foreclosure (aka REO) In 4 Easy Steps
January 15, 2008 by Norman · View Comments
We’re starting to get some calls from people looking to buy REO’s but need a little guidance on how to begin, so here is some basic info that you can use as a checklist to help you get things under way.
- Define your strategy. Cash flow vs. Appreciation. Let the math dictate the offer price and know how far you are willing to deviate from your baseline. Real Estate investing is too important to do based on feelings or hunches, if you don’t want to crunch the numbers, work with someone who will.
- Is your financing in place? Timing counts when buying REOs. There are other investors looking at the same properties so a deal for you is probably also a deal for a dozen other investors. There are bargain hunters in every market so you must be prepared to act when the right deal comes along.
- Don’t be disappointed by rejection or failure. It’s called a buyer’s market for a reason; other opportunities will come along as long as you aren’t too busy moping over the one that got away.
- Write clean offers, write clean offers, write clean offers. Put down at least 1 percent, have reasonable straight forward contingencies,(no contingencies dependent on your uncle’s cousin’s friend giving the final ok), and show you are willing to close in a reasonable amount of time.
Of course there is more to buying foreclosures than four simple steps so feel free to contact us if you have any further questions.
East Bay Bank Owned Foreclosure / REO Lists: NFL Divisional Playoffs Edition
January 13, 2008 by Andy Kaufman · View Comments
So another Sunday has arrived, and along with that comes another fresh set of active East Bay Bank Owned Foreclosure /REO listings. (REO Wikipedia)
In the past we’ve only publishing lists for Western Alameda & Contra Costa Counties, but this week we’ve added both Southern Alameda County &, Eastern Alameda & Contra Costa residential lists.
Sorry, no quick stats today. My notebook’s power supply konked out and I’m doing my best to get this to you right now via my old desktop & it’s running S L O W.
Anyway, thanks to everyone who downloaded the lists and checked them out. Although we had less total downloads, the volume of phone calls & emails continue to rise.
For this we thank you!
Remember that this is a community project. We welcome your suggestions to help us improve our services and hope that you’ll contact us when you want to talk to someone who’s actively working in the REO trenches.
Once again, I’ll also be posting the lists in the ‘relatively static’ Foreclosures / REOs section of the site, so if you miss a week and want to find an older one, look in there.
Same deal.. If you see something that strikes your fancy and you want more info, want to write some offers, or just want to talk about how we can do some business together, just call or email us (my info is on the top right corner) Cool?
So without further ado, here’s this week’s lists…
Download All the East Bay Foreclosure / REO Lists at Once (.zip file)
Northern Alameda Residential Foreclosure / REO List
Northern Alameda Residential Income Foreclosure / REO List
Western Contra Costa Residential Foreclosure / REO List
Western Contra Costa Income Property Foreclosure / REO List
Eastern Alameda & Contra Costa Residential Foreclosure / REO List
Oh yeah, while your at it, don’t forget to check out our REO listings here.
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