SocketSite’s Residential Real Estate Outlook For 2009

Is this the entire 2009 forecast? Is there a doc to download, etc – or just this blurb? Appreciated – just assumed given the hubbub re: “working on it” for last several days that I’m being dumb and probably missing something.
Thanks for all the great work – great site.

Just checked the MTD sales volume at the MLS. Total sales (condos + SFH) so far this month stands at just 96. No surprise of course – but this is really low – maybe the lowest in post-WWII history. Here are the Jan sales counts for the past five years: 08-225, 07-308, 06-295, 05-352, 04-371, 03-335. Forget the Mendoza line (200), we’re setting a new low bar.

It’s nice to see a statement like this one linking RE market shifts to broader patterns in the economy. Thanks SS.
What I’d like to know: who do SS editors consider to be analysts capable of spotting trends that would indicate substantive change in the market?
I’d be curious to know, as part of a statement like this, what signs SS editors would consider to be the most robust indicators of a shift in trend.

David – I have been very surprised at how resilient Berkeley and Rockridge have been as I have been tracking those areas for almost 2 years now. I also don’t quite understand why Montclaire took such a disproportionate early hit versus Rockridge, they are very similar neighborhoods. It will be interesting where these places end up.

FSBO,
January’s closed deals are reflective of what has been to this point, the nadir, November 2008. The market improved since then. Now let’s see what happens post Obama bounce, post further jobs losses. The spring will be interesting.

eb_dude
I know many families that live in both and I am not all that sure that there is much of a difference between Montclair and Rockridge for families. I agree that the SFH market in good school districts will be the stickiest, but both Montclair and Rockridge have top elementary schools (though no real solid options beyond that) plus they are right next to each other and both with solid bay views. My only guess is that being a little closer to College Ave makes people pay a premium, but most people in Rockridge have to drive there anyway, so I just don’t get why Montclair has been beaten down as it has when compared to Rockridge.

I think Rockridge is resilient (more so than Montclair) because people can walk to BART and all other amenities. Just like in SF, people are willing to pay for convenience. Montclair is suburbia, Rockridge is not.

Sorry, I don’t want to look a gift blog in the mouth, but I kind of agree with Clay above…was expecting a little more. You know – maybe some charts, some numbers around the predictions, etc.
But I guess I understand that with so many moving variables interacting, it’s tough to make any specific predictions today.

The strangest economic indicator I have run across:
In December 2008, Rolls-Royce sold ZERO cars in North America, period.

redseca2 – that is really disturbing news. Clearly we need to divert TARP funds to the Rolls-Royce dealers and perhaps have a no-down payment, no-interest buyer assistance program. Maybe even special tax credits for bankers whose bonuses were reduced from 2007 levels.

Does anyone know how Napa prices have been doing lately? It’s one area that I don’t hear much discussion about. I’m wondering if this is the best time to be looking up there.

Very well stated Adam. I particularly liked this statement:
“Historically low interest rates will continue to benefit those who buy”.
I’d just like to add that we are starting to see a fair bit of this type of reasoning popping up in the marketplace. Buying now is not for the faint of heart tho, but buyers do have negotiating power we haven’t seen. You have to be confident in your future geographically (as in you don’t ever want to leave SF, what you’re buying will suit you for years to come, and your wife is not pregnant with triplets), and financially (20-25% isn’t going to break the bank, and if you lose your job or significant income, you’ll still be fine) to buy in this environment, let alone get a loan. You also need to buy and move on from checking comps, reading sites and tracking the market. It’s going down, so why torture yourself? It’s last call, get your drink and come back for the next happy hour.

So much uncertainty….seems nobody wants to make any specific predictions. Well, I’ll dust off my crystal ball (and tin foil hat) for some hair-brained macro predictions of my own:
1) The Fannie and Freddie foreclosure moratorium will soon be extended for the rest of the year, if not longer. Furthermore, zombie banks such as Citi and Bank of America will be partially or fully nationalized. Wrapping them (along with Countrywide, formerly the largest mortgage lender in the nation) under the Fed umbrella will put a stop to foreclosures entirely. Other banks will be pressured to do likewise via bad PR, bully pulpit, or witheld TARP money. Bitter homedebtors will be allowed to live free until the financial system is near collapse. Which brings me to prediction #2.
2) The new administration will go to the world to borrow trillions to fund all this, as well as other projects and jobs programs. With a global recession, no one will be willing to lend at current Treasury rates. So Treasury rates will rise sharply to finance the bailouts, forcing other rates up as well and stifling recovery. Double whammy.
3) With rates already rising, the Fed will give up the controlled, sterilized approach, and we’ll see massive money printing, i.e. inflation, to burn off the debt the government has assumed from corporations and citizens.
4) Home prices will continue falling until at least 2012. But in 2013, The Greys will make official first contact. Diplomatic relations will be established, and it will turn out their entire home world is overcrowded, “world class,” and more expensive than even real SF. They’ll get visas to come over here, and will start buying up real estate everywhere. Prices will rise at 30% a year for decades, with most humans being priced out forever.
5) Sometime around 2045, space travel will become commercially viable, and terraforming technology will improve to the point where we can colonize Mars. Of course it will all be developed here in Innovation Mecca, where a 10 square foot studio will cost 12 million Republic Dataries.
6) At that time, the Red Planet will become the biggest land rush in galactic history, with life forms of all types rushing out to stake claims on primo spots with crater views. The speculative bubble in Terran real estate will collapse entirely, crippling the galactic economy, and resetting everything to step 1 again.
I’m pretty sure at least some of this may happen, barring intervention by sentient robots or the development of time travel (so ceteris paribus). But I welcome any criticism.

Smiling Millionaire,
Fluj took a day off today, but he seems to have found a worthy stand-in (alex @ frontsteps).
“You also need to buy and move on from checking comps, reading sites and tracking the market” translation: why bother with the ugly reality that makes you not want to buy? put on your cheerleader hat and jump in. Trust me, you’ll be happy (and help the economy in the process, specifically, RE agents employment)
Thanks, but… no thanks!

probably just one of those “Phineas has grown weary” sort of days

asiagoSF:
Agreed! Investing in an asset class at the very beginnig of its free-fall to support the Starving Real Estate Agent Fund is not my idea of a party. This is just the beginning, folks. I find staying on the sidelines while I actually ENJOY my hard-earned money much more entertaining.

For those curious, the three counties with lower unemployment rates than SF (per Jake’s post) are Marin, San Mateo, and Orange County.

The sales figures FSBO posts are the key player in the SF story IMHO. Not even at triple digits with only 5 days left in the month? Buyers have simply stopped buying (or they cannot buy) while sellers continue to bring out listings. Only one thing will get sales moving — much lower prices (I suppose the govt could give free money away again to individual home buyers, but I don’t see that happening).
I’m curious, what are the numbers for homes at the $1m, $1.5M, and higher price points? My sense is that we may be barely into double digits in January. That is where the real price pressure is being felt. Also, what are the prospects for closings in the near future — i.e. what are the numbers like in January for units going into contract (rather than closing)? My guess is that number is also low, and a fair number of places are falling out of contract to boot. The demand curve clearly has moved a lot, and I just don’t see that changing for a long time. Sellers will move prices down to meet this curve or they simply won’t sell.

Dude I was with you up until #4.
and –
Alex – thank you..yes, purchased now must stop reading comps etc. you may have freed up a lot of my time.

Redseca, where did you see that Rolls Royce stat? Thanks…

“what people think the impact of the FHA maximum of $625,500 on pricing?”
Problematic.
I personally was rushed to do a refi with the 725k limit by end of year, thankfully was successful. Could have swung it without the higher limit but overall it was much better relative to qualification, affordability, security, etc.
Having bought a few month prior the banks were not yet set up to fully deal with it’s protocol so it really was only open for a window of about 4 months of the year. We tried to get it the first time around with Wells (same bank that eventually made it happen) but they were not geared up to accomodate the changes yet.
If I had not bought and was looking at getting in now with the limit down to 625k and jumbo where it is I would rent.
It really does make a difference on the “$800k to $1.1m or so props because getting more buck on the lower rate obviously helps DTI, etc.
Another catch is the increased temp conf. is really a Jumbo – so now that I am in on the 725k if I want to refi if rates go even lower and it makes sense I have to put the overage on a 2nd, or come to the table with a check to drop to 625k. The banks will not honor the old limit with the new temp conf. int. rates.

eddy wrote:

The only thing missing here are the external market forces that will be thrust upon our market as a whole; specifically what Obama and his team plan to do over the near term to prevent natural market forces to occur.

It’s not just the federal government. From California homeowner defaults slow as new law kicks in”:

Notices of default against homeowners in the state — the first step toward foreclosure — dropped to the lowest level in more than a year between October and December, down 20% from the previous quarter and 7.7% from the same period in 2007 to a total of 75,230, according to MDA DataQuick.

In September, the number of default notices dropped for the first time in three years, and housing experts credited a new state law that took effect that month and forced lenders to make more efforts to contact borrowers before initiating foreclosure proceedings.

By December, though, the default notices were back on the rise, nearing 40,000, where they were before the law.

“The law in California briefly slowed it down. Now you are going to see an echo effect where those homes that were in default are now in foreclosure,” said Dean Baker, the co-director of the Center for Economic and Policy Research in Washington, D.C. “On top of that, people have been losing jobs at an incredible rate. That’s going to create more foreclosures.”

I’m not a Peter D. Schiff type like some folks on SocketSite, but I do believe that government interference is only delaying the much-needed and inevitable..(say it with me)…Price Discovery.
Prices need to come down dramatically, a lot more people with mortgages they can’t afford need to get foreclosed on and put out of their McMansions in Mountain House, and then and only then will buyers return in “normal” numbers.

@ex-SFer– I think you are too quick to discount the possibility of a V shaped recovery. I have heard economists from leading business schools predict a V shaped recovery in the 3rd quarter. I share your skepticism about that, but some very financially literate people believe it is going to happen.

@ NoeNeighbor – As a guy who works daily with retailers can tell you that noone is planning for anything other than 18 mos of suckage.

Gowiththeflow – thanks for the insight.
I agree with Willow and Clay – the recovery is looking less like a “V” and more like an “L” – perhaps because people thought the boom period an “r”.

“As defined by analysts, not sales agents or the industry.”
Are these analysts that we are relying on to forecast the recovery, the same analysts who didn’t see the downturn coming in the first place?

I would be really interested to see a separate analysis on something that’s a key part of San Francisco housing stock: TICs.
Given the current environment,
-People who own TICs cant sell them because no one will finance the purchases affordably, no first time (SF) buyers have a 20-25% downpayment anymore due to losses on prior property or in the stock market.
-This removes current TIC owners from the buyer pool because they can’t “step up” to a house or larger condo.
-The sudden disappearance of TICs from San Francisco’s truly “available” housing stock may be artificially propping up condo prices due to the sudden shift in the supply/demand equation. TICs may be on the market but they’re not “emotionally available” for sale.
-I am starting to see some BIG ($100k, which is huge at that range) price reductions on TICs.
Again, the TICs make up a huge swath–probably close to half–of the entry level owned property in this town. Kick that leg out from under the chair and there’s an interesting domino effect.
Is there a break-out anywhere of how many TICs are still selling and for how far under asking?

Couple responses:
1) Montclair has dropped more than Rockridge because yes, it’s less walk-able, and less convenient, and less established. Montclair, looking at distressed sales, had a lot more houses bought in the bubble years with young families “stretching” to get into one of the 4 good grade schools in Oakland (Thornhill being one of them)
2) “Bad parts” and less desirable areas of Oakland are already bottoming. Why? Because there are investors, yest investors, coming in to buy, and those “working class” folks are going back to what they should have been all along–renters.
3) 1996 pricing? Heck, we’re at 1994 pricing in East Oakland. You could buy blocks of houses at $75-$115K/pop and rent each of them out for $1000-$1400/month. With the excess cash flow you could hire two burly bodyguards and a pit bull and collect rents just fine and have profits to spare. Even if rents drop, are they going to drop to 1994 rents? $500/month? Heck, you’re still cash flow neutral at that. What else am I basing my bottom call on — well, in San Leandro especially, ANY house that drops to around $300-$350K is getting bought. Quickly. Even if it needs work. Why? it’s cheaper than renting. (even with very conservative assumptions, i.e. my house is cheaper than renting the same house as long as prices appreciate 1.8% annually over 15 years, and assuming a 6.25% tax free investing rate for my down payment–which is higher than any muni bond I could get and equivalent to 8-9% annually in stocks)
4) In summary, I’m basing my bottom call on the fact, yes, observational fact, that houses in the areas I described are either at or below the price levels that support cash flow, or in a owner-occupied situation, make more sense than renting. In the other areas that have not hit bottom, those numbers are generally the drops required to bring house prices to that level.
Check back in a year and see if I’m right.

I think you are too quick to discount the possibility of a V shaped recovery
I don’t.
The only way that I see a “V” shaped recovery is if there is some sort of massive govt intervention with severe subsequent monetary inflation (dollar devaluation). However, it is improbable that the govt could intervene on a long enough time scale to complete the end of the “V”, thus you fall into a “W”
I have pointed out several times that a “W” shaped recession is in theory possible. At first, a “W” will look like a “V”. Overall, I still see a “U” or “L” as more likely, but the “W” probability cannot be ruled out. I cannot discern which is most likely at this time due to govt intervention.
As example: it looks as of today like the “bad bank” idea may be floated again. we also may see a $850B+ stimulus. there are other govt forces at play as well. If the velocity of money increases it would not be unreasonable to see what looks like a “V” shaped recovery initially. But I have a hard time believing that this type of recovery is sustainable given the debt we will need to achieve this. (UNLESS we see significant inflation/dollar devaluation). however, inflation out of control will quickly feed on itself, and I don’t see how the bond market will accept this, so interest rates will need to rise making the Govt intervention more costly over time… thus we fall back down into the “W” shape recession.
I’ve said this before: my personal crystal ball is very cloudy right now. Too much government intervention, and we’ve just seen a sea-change in govt. I don’t really know what Obama will bring to the table. Thus far it looks like more of the same. Geithner. Bair. “Bad Bank” (basically what TARP was originally going to be). Refusal to outright nationalize quickly.
In my opinion a “V” shape is in theory possible, just like spontaneous combustion. but highly unlikely. I have not seen a single intelligent investor that I trust say otherwise.
However, I do hear this “V” rediculousness from many of the CNBC cheerleaders, those in govt positions who don’t always speak the truth, and those who had no idea what was happening in the first place. (The same sorts of people who told us that AIG would make the taxpayer money, and told us that our issue was “just a subprime” problem that was “contained”)
A “V” shaped recession after a major credit event would be a first, as far as I know
A “V” shaped CONSUMER-led recession would also be rare, to my knowledge.
we’ve seen Great Depression-like events the last 12 months. I”m not saying we’ll have GD2, just saying that it’s grim. hard to imagine we catapult from GD events to a recovery quickly.
As I acknowledged earlier in my CONTRARIAN post, the credit markets ARE starting to thaw. But only small segments (such as some of the commercial paper market) and it is at a snail’s pace. But that will take a LONG time to translate to the market. (just like the initial credit shock took a long time to affect the “real” economy). and we haven’t seen any prolonged thaw. things start to thaw, then plunge into catastrophe at a moment’s notice.

I agree with gh @ 4:11 p.m. I, too, am disappointed with this post. It offers nothing new or particulary insightful. It’s just summarizing what has neen echoed on SS for the past seeral months, if not years, and is just restating the obvious.

David – that makes sense. I like your thinking. And in some places it may be true that units are getting snapped up and purchased. Indeed, sales numbers are up in some areas. But in SF, from the controller’s Economic Barometer (thanks again Jake) we see average rent for a 1 bedroom apartment is $2,142. If you figure 6% over 30 years is about, the PV is $357,268. Let’s simplistically assume a 3% FHA downpayment of $11,000. For renting to be on par with selling, the average one bedroom apartment in SF would be about $370,000. There’s a long list of places in the Bay View and Silver Terrace for that price, and a few studios in the Tenderloin, but that’s about all I see.
So a “rent v. purchase price” analysis, even at the bottom tier in SF which is typically thought to be “closer” to hitting bottom, may still have a way to go. (But I’ve gotta admit it’s closer than I thought.)

Regarding the TIC/condo question, it looks like the ratio of sales between TICs and condos has been relatively constant. Here are sales for TIC’s and condos (inc loft condos & coop) by period:
Jan 09: 10 TIC sales, 34 condos, 23% of total are TICs
Dec 08: 32 TIC, 106 condo, 23% TIC
Year 08: 432 TIC, 1,856 condo, 19% TIC
Year 07: 722 TIC, 2,349 condo, 24% TIC
Year 06: 652 TIC, 2,549 condo, 20% TIC
Current active count: 184 TIC, 588 condo, 23% TIC
So the TIC % of the category has been relatively constant – including for active current listings. Note the months of supply implied by the active count: For December’s sales volume, it’s about 5.6 months of supply (for both TIC and condo). But based on the current low January sales volume (which will continue to rise somewhat with new reportings), the implied months of supply may be approaching 15.

Here is my prediction:
The Arizona Cardinals will win on Sunday versus the Pittsburgh Steelers if they can score more points.
And in other news, the sky is blue (stole that fromk some tipster, forgot who.)

@movingtoSFfromNYC
Define “somewhat desirable neighborhoods”. Somewhat desirable to me is where I can easily walk out my door and score crack or a date with a tranny hooker, but for others it is proximity to shops and restaurants!
Joking, of course. There are homes in the mid 5’s.
Here is a sample.
Here is the link to the district map. All of the homes on that list are in D3 and D10.
Whether those areas are “somewhat desirable” is likely now up for debate.

I wonder if it would make sense to buy a fixer upper in a nice neighborhood like Noe and then do a down to the studs remodel. I recall reading some cost breakdown for this type of scenario and the numbers were really high. However, given current market conditions and the fact that contractors are, my guess, looking for work. Maybe it is possible to get a good deal? I don’t know, just throwing it out there.

The minute people started called Noe Valley prime is when I knew we were in a bubble.

With the market declining 2% per month, a better strategy than buying a fixer and spending 6 months fixing it up is to just rent for 6 months to a year for half the price of buying, and then buy a completely remodeled home for the same price as a fixer 6 months prior, and save yourself all of the trouble.

With the market declining 2% per month, a better strategy than buying a fixer and spending 6 months fixing it up is to just rent for 6 months to a year for half the price of buying, and then buy a completely remodeled home for the same price as a fixer 6 months prior, and save yourself all of the trouble.
If you truly believe that, why doncha take that advice and tell us what happened in a year’s time?

Some of you RE Bulls on here will not want to hear this…. but read this interesting article about where RE prices are heading from here.
http://www.huffingtonpost.com/dave-johnson-and-james-boyce/double-bubble-double-trou_b_161357.html

Moving to NY and all the commenters to him;
1) There is a lot of time to do a remodel, but you don’t need bribes, or illegal labor.
2) Good contractors are busy so mind who you hire
3) A decent architect can get you through the permit process just fine.
4) Your neighbors have no say on a “down to the studs remodel” if the work is interior. So, don’t worry about the plaster.
But, 5) and most important the cost of the fixer in good neighborhoods has not come down as much as the cost of everthing else. (see Douglass $1.1M place that went into contract in a week).

MovingtoSF: San Francisco is a combination of different neighborhoods, each with a different feel (I imagine NYC is the same). If you’re moving here for the first time, I would rent anyway just to give yourself a chance to see which shoe (neighborhood) fits better.
As for getting back on topic, I’m starting to hear a lot of activity on the (extreme) low-end of the market. What have others heard?

Good to hear that investors are buying up REOs. That means less money to compete with when the buying gets good.

A Coldwell Banker perspective:
Earlier this week, the National Association of Realtors reported that in December, existing home sales rose unexpectedly while inventory declined, led by a surge of sales in the West.
The national real estate organization reported, “Existing home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December from a downwardly revised pace of 4.45 million units in November, but are 3.5 percent below the 4.91 million unit pace in December 2007.”
In the West, existing home sales jumped 13.6 percent to an annual rate of 1.25 million in December and are 31.6 percent higher than a year ago. However, the median price was $213,100, down 31.5 percent from December 2007.
Here at home, CAR reported this week that home sales increased 84.9 percent in December in California compared with the same period a year ago. No, that’s not a typo. 84.9 percent. On the flip side, the median price of an existing home fell 41.5 percent, a continued symbol of buyers taking advantage of the large number of distressed properties currently available.
So why the sudden, so drastic surge in sales? There are a few reasons:
A lot of people who were previously priced out of the housing market can finally buy
With interest rates under 5%, a buyer’s purchasing power is at its best in more than three decades
After months of increasing or stable inventory, we are finally starting to see the numbers fall
Increased consumer confidence (of late) based on the new administration
We’re seeing a lot more investors coming into the market in addition to first time buyers. Consider the fact that this week alone, one Gilroy Agent represented 10 properties that went into contract. Almost all were investors and the properties were condos in the under $100,000 price range.
So is it too early to call it a trend? Probably. In all honestly, we still have a lot of distressed properties to move through before we can begin to see prices stabilize. At least for the foreseeable future, buyers will probably have the edge but with an 84.9 percent increase in sales year over year and inventories on the decline, we’re finally moving in the right direction. The key to all of this: buyers are ready to buy when they perceive a good value. Until then, they wait.
Now let’s take a look at this week in real estate:
East Bay—Our Castro Valley office reports multiple offers still seem to be the trend for REOs and offers are being accepted over asking. One Agent reports that her recent offer on an REO property in Hayward was rejected, with the winning bid accepted at approximately 12% over asking. In an interested trend, especially in Castro Valley which was one of the hardest hit by REOs, Agents are reporting that there seems to be less REO inventory available. Is it possible this market is going to be one of the first to rise from the REO short fall? Danville reports almost all of our sales are bank owned. Open houses are well attended and with the media talking about REOs, buyers are looking for bank owned bargains. Walnut Creek is feeling the same effects with 90% of its sales being REOs or short sales. On the contrary, Oakland reports it needs listings. Great listings in this market are getting multiple offers. A new Montclair listing on the market (listed at $678,000) had its first open on Sunday and had 200 groups through. We had requests for 11 disclosure packets.
Monterey County—While the market on the Monterey Peninsula is a spotty one, Agents are writing lots of offers. Buyers are being tough and we have put 43 properties into escrow since the first of the year. An interesting fact, Carmel has had eight properties listed over $2 million go into escrow in January.
North Bay—Greenbrae reports that sales all over central Marin are weak, though new homes that appear to be priced well are coming on the market. San Rafael notes that many of the condos listed under $200,000 in San Rafael are seeing multiple offers and are selling over asking. Petaluma notes that inventory is building in all price ranges, especially in the $600,000 plus range. We’re seeing multiple offers in the under $500,000 range. All but one of our open escrows for this week were multiple offers. Santa Rosa also reports some good news noting that a new Agent helped an REO that is old to the market and had 38 groups through. A veteran Agent helped a similar property and picked up a cash buyer looking to buy three properties in the next 60 days!
Peninsula—Burlingame notes that after last weekend’s very busy open houses, buyers seem very enthusiastic. We are seeing some very attractive properties in the $800,000 range come on the market which should present opportunity to those buyers who have been sitting on the fence. Half Moon Bay notes that several offers are being negotiated and there were six new properties listed that are neither short sales nor REOs. One well-priced REO received at least four offers so buyers are ready to buy when they perceive good value. Palo Alto notes that open house activity has been slow (about 50% of the norm). There does, however, seem to be a bit of momentum in the entry level properties.
San Francisco—The Lombard office reports that January deals remain dominated by REOs, mostly under $650,000 but one at $1.6 million. The primary market challenges: financing fall-outs and buyer fence-sitting. Our Noriega office reports that sales exploded last week with 10 ratified offers. It has been busy on floor and via online inquiries so it appears that sales are following. City inventory remains at six month lows which is creating bigger demand for available listings. One example, as shared by our Market Street office is that one client lost out on three properties due to multiple offers. Our hope is that this is an indication that more offers are starting to be written and accepted.
Santa Cruz County—We have had two large sales over $3 million close within the last two weeks. There are still not many sales in the county over the $1 million mark. It is a combination of lack of buyers and lending issues. In the regular market, inventory remains about the same although certain areas of the county—like the west side—have seen significant decreases. Open house attendance is up and there is activity with first time buyers and investors.
Silicon Valley—Activity definitely seems to be picking up. Our Los Altos First Street office reports that buyers are attending open houses in good numbers, mostly in the lower price ranges. Some price adjustments of 10% create offers. Our San Jose Main office disagrees noting that while open houses are busy with traffic, it isn’t translating into sales. The office reports that many buyers are still sitting on the fence waiting for prices to drop further. Lower priced properties (between $250,000-$550,000) seem to be receiving the most activity.
South County—The Hollister office reports that list prices continue to decline and cash offers are on the rise. Morgan Hill reports that this week, one Agent put 10 properties into contract. They were all in the Gilroy area and most were under $100,000 condos. The Agent represented several investors who mostly offered cash for the properties.
The bottom line is that while sales are on the rise, we still have many distressed sales that must work their way through the system. With Wednesday’s controversial passing of the stimulus package (with a near party-line vote), we can only hope that the administration’s plan—in what we know is unchartered territory for our country—is successful. The administration needs to move fast to stimulate lending (and spending) in order to set the foundation for an economic recovery

I wouldn’t count on a long term price rebound. More like a Dead Cat Bounce leading to a few years of moderate decrease
Hmmm. “Moderate decrease,” huh? From this point in time, 5 or 10%, maybe 20% off desirable neighborhoods? And your metric is 100 to 150?
Why are you here again?

Your blog is very informative, I have learned so much from it. It is like daily newspaper :). Added to fav’s..
Deirdre G