The week in numbers:

• 18 homes were listed this week, 15 single family homes and 3 condos.  It is 2 less than last week.  Same week last year 15 new homes were listed.  The inventory of homes available for sale slightly increased from last week reaching 66 units.
• 17 new contracts were accepted this week while a year ago 15 homes went into pending state.
• 12 escrows were closed this week wand 14 homes change owners same week a year ago.
• Only 2 homes failed to sell and were taken off the market.

If you are planning to sell your home in 2012, now is the time to plan to prepare your home and pick the best sales strategy for you.  Contact Elena or Michael Talis at 650.766.6100 for professional advice and consultation.
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*DOM - Days On Market
**COE - Close Of Escrow

From entry-level homes to the luxury estates, the Bay Area's housing market gained more momentum in March, according to a number of recently released industry reports.

March home sales in the region were at their highest level for that month in five years, the result of lower prices, low interest rates and an improving economy, according to DataQuick, the La Jolla-based real estate research firm.

Some 7,694 new and existing houses and condos sold in the nine-county Bay Area in March, up 34.9 percent from February and 9.1 percent from March 2011, DataQuick reported. Last month’s sales total was the highest for the month of March since 8,317 homes were sold in 2007.

The strongest sales gains were in Solano, Sonoma, San Mateo and San Francisco counties with 13.2 percent, 12.1 percent, 11.4 percent and 11.3 percent increases, respectively, from March 2011.

“This is the time of year when buying patterns usually start to normalize," said John Walsh, president of the research firm. "And while the changes we’re seeing are incremental, they’re incremental in a positive direction."

Having said that, DataQuick cautioned that there continue to be potential bumps along the road to a normalized market. Walsh said he's watching closely the number of distressed properties coming onto the market, as well as the ready availability of mortgage financing - or a lack thereof.

The median price paid for all new and resale houses and condos sold in the Bay Area last month was $358,000, according to DataQuick. That's up 10.2 percent from February, and down fractionally from $360,000 in March 2011. The decline on a year over year basis was the smallest since October 2010.

The luxury end of the market also turned in a strong performance in March:

• In Marin County, both sales and the median sale price of million-dollar homes rose. A total of 48 high-end properties changed hands, up from 44 in February and 33 in January. The median sale price of a luxury home also soared 15.3 percent from the previous month to $1,525,000.
• In Silicon Valley, 110 homes sold for more than $1.5 million in March, nearly double the 58 transactions in February and up from 86 in March 2011. Of the total sales, there were 50 multi-million-dollar transactions compared to 36 sales over $2 million during the same period a year ago.
• In the East Bay, luxury sales soared 23 percent from a year ago and more than doubled February's totals. Some 111 million-dollar properties changed hands, up from 49 in February and 90 in March 2011.
• And in San Francisco, a total of 55 homes sold for more than $2 million during the first quarter of 2012 compared to 50 sales during the same period a year ago. At the same time, the median sale price rose 2.7 percent from last year to $2.8 million.

The market will continue to face some headwinds in terms of the economy, distressed properties and even mortgage financing. And it's likely that the economies of Europe and China will continue to factor in to our recovery. But it’s clear that locally, we are headed in the right direction regarding housing. Our biggest challenge isn't a lack of demand; it's not enough homes to sell. So if you've been thinking about listing your home, there couldn't be a better time than now.

It seems like every day I see national headlines decrying the “struggling” housing market and questioning when things will finally turn around. And then we get to work and read the reports from Bay Area cities showing sales jumping and multiple offers for many if not most homes in a number of areas, and I wonder if we’re on the same planet.

The disconnect between the Bay Area housing market and what’s being reported on a national basis is getting stranger every day. In other parts of the country, agents and government officials are trying to figure out creative ways to rid their markets of a huge backlog of housing while buyers show little interest in jumping in to help. Then there’s the Bay Area, where the housing market is just the opposite.

Take, for example, a few of the reports this week from local agents on the frontlines:

• From Marin: “Multiple offers continue to be the name of the game, but the difference from the past markets is we are now seeing multiple offers in all price ranges, not just REOs and Short Sales.”
• One $1 million-plus Mill Valley home in Strawberry garnered 11 offers last week, and another priced at $1.35 million had six offers. Both are rumored to be in contract for almost $300,000 over list price.
• “Buyers are getting frustrated over not getting the property in multiple offer situations, even when going substantially over the list price.”
• From Los Altos: “We are selling more than we are listing in most price ranges. We had a healthy increase in the high end this past week with a $12 million and $7 million sale, several sales above $3 million and a dozen over $2 million.”
• “Inventories are at historic lows and the market continues to heat up!”
• From Walnut Creek: “We’re seeing multiple offers on most every listing that comes on the market. A condo in Walnut Creek received seven all cash offers!”

The same stories are being echoed in all parts of the Bay, from San Francisco and the Peninsula to San Jose to the East Bay, and not just the more expensive markets. Buyers are pounding the pavement, cash in hand and looking for good properties to buy – now, if not sooner.

Given the surging demand for housing you’d think sellers would be rushing to list their home, right? Guess again. The inventory of homes for sale is the lowest it has been in years, maybe even a decade, according to long-time industry observers. The result is that buyers are fighting it out for the few homes on the market listed by savvy sellers.

So what’s keeping the other sellers away when homes are going for great prices once again? Two things, both of which could come back to bite sellers who try to time the market:

1. A misunderstanding of the state of the housing market.

Perhaps they are reading the national headlines and still believe the market is in the doldrums, prices are still going down, and they don’t want to sell at bargain-basement prices. If so, they’re missing an incredible opportunity. We’re having a honest-to-goodness house party with lots of anxious buyers. But somehow, sellers never got their Evite.

2. They’re waiting for the Facebook IPO.

The thinking goes that once Facebook goes public, hundreds of employees will receive lucrative stock options which – eventually – they will be able to cash after the lockup period and then rush out to bid up prices for local homes. Wow, talking about betting on the come.
I’m not questioning the “Facebook effect” on the Silicon Valley housing market. Far from it, I think it certainly will have some impact on pricing at some point in some communities in the heart of the valley. But this strikes me as something like trying to time the stock market. I don’t know about you, but I’ve never been able to get that right. And I don’t think many others have as well.

The fact is that the real estate market has always come down to two simple factors: the law of supply and demand, and consumer confidence. Right now, both of those are telling me it’s a sellers’ market in the Bay Area. Consumers are feeling pretty darn confident as the economy picks up steam and the stock market presses higher. And the scales of supply and demand are tipping heavily in favor of sellers.

Smart, strategic sellers get that, and they’re making their moves now – not six months or a year from now. They’re the ones receiving multiple offers over their asking price because there just isn’t a lot of competition for buyers’ attention. They’re out there now, well before everyone else joins the party, tipping the scales back in favor of buyers once again.

If you are planning to sell your home in 2012, contact Elena or Michael Talis at 650.766.6100 for professional advice and consultation.

Those of us that have lived in the Bay Area for years know that this region has always been a little different than the rest of the country. And most of us are glad that’s so! The state of the housing market is one more example of the Bay Area running counter to national norms.

Anyone who watches the network news or reads a national publication can’t help but come away feeling that every housing market in the country is suffering equally, thanks to a glut of inventory and a lack of qualified homebuyers.  And while that’s true in some outlying areas of the Bay, it’s generally incorrect in most of our region.

To the contrary, we continue to see growing demand by very serious buyers looking to purchase homes. And while some are scouring the landscape for bargain basement distressed properties, many are seeking good, well-maintained homes at fair prices. And there continues to be a very strong demand for properties in the middle and upper ends of the market, including million-dollar homes.

The real problem we’re facing here in the Bay Area isn’t a lack of buyers; it’s a lack of sellers. Many homeowners who would like to sell their homes have been sitting on the sidelines, still believing that the market is in the depths of a recession. They still fear that they will have to take drastic price cuts in order to sell.

I’m afraid that the news hasn’t gotten out to them that things have changed for the better over the past year or two. Sellers no longer must sell their properties at fire-sale prices to get buyers attention. In fact, fairly priced homes that are well maintained and in good neighborhoods are not only being sold fairly quickly these days, but in some cases with multiple offers.

What makes the Bay Area different from the rest of the country, which is still battling a very sluggish housing market? It starts with our strong economy.

As a result of vibrant high-tech, biotech and social media industries from Silicon Valley up the Peninsula to San Francisco, the Bay Area is home to some of the best-paid knowledge workers in the country. These are well-educated engineers, programmers, financiers, and other highly educated professionals with money to invest and a desire to own a home. Add to that the supporting cast of back-office and headquarters jobs that have been created by thriving tech companies over the years and it’s easy to understand why demand for the Bay Area’s limited housing has never been stronger.

Local Market Monitor, a national firm that analyzes housing markets for the banking industry, recently issued a three-year forecast of the best and worst housing markets in the country out of the 100 largest markets that it covers. Ranking second in the nation – the San Jose-Sunnyvale-Santa Clara housing market.

A story on the study in MarketWatch noted that home prices in Silicon Valley “are close to a bottom…and there’s already a good recovery underway in the job market, driven by high-tech manufacturing and technology services. Income levels are high, and population growth is slightly above average.”

During the housing boom (between 2002 and 2007), home prices rose 43% followed by a 21% drop, the report showed. “The San Jose recovery is clearly connected to the high-tech sector...and during the recession, 30,000 tech jobs were lost, but 16,000 have been regained since 2009. These are high-paying jobs that affect the housing market,” Local Market Monitor added.

While no one’s predicting an immediate return to the red-hot housing market of years ago, clearly things are looking up for much of the Bay Area.

For sellers who have been holding off listing their properties, I would strongly urge them to reconsider. Right now the math is in a reluctant seller’s favor. Interest rates remain near historic lows, the economy is gradually improving, and the Bay Area has more than its share of anxious buyers trying to purchase a home – but not enough homes to meet that demand.

The sum of these conditions mean that the balance between supply and demand is actually tipping in many homeowners’ favor, as hard as that is to believe after what we went through in recent years. This could very well be a surprisingly good time to sell a home, before everyone else catches on to the real story of the Bay Area housing market.

It has certainly been a rough August for the financial markets, and we still have more than a week to go! Wall Street has taken us on a wild rollercoaster ride with volatility spiking to its highest level since the end of the recession. One day the Dow’s down 400 points, the next its up 400, then down again. Much of the turmoil is due to worries about the U.S. economy and whether we’re headed for a double-dip recession, as well as the political infighting in Washington over the debt ceiling, and the European sovereign debt concerns.

The troubled economic backdrop has many people wondering if this is 2008 all over again. And more specifically, what impact will all of this have on the nation’s housing market, and our local markets here in the Bay Area?

Without glossing over our current economic challenges, I strongly believe that we are in a very different place today than we were three years ago. At the depth of the recession we had a liquidity crisis. Today, banks aren't lending as much as we'd like, but their balance sheets are strong with enormous cash reserves. Top 500 corporate earnings continue to be very strong, and capital investment is increasing. Although GDP growth rates are lukewarm, we've nonetheless had eight straight quarters of economic growth.

Nationwide, foreclosures have declined for a 10th month in a row. We have not seen the end of the foreclosure pipeline, but these declines are still a good signal to the public. There is no doubt that structural issues remain in our economy. But they are not fundamentally different from two weeks ago, before the S&P downgrade of U.S. debt. As such, there's little justification for the current reaction other than issues of confidence and perception.

Real estate has always been a very local business. And while the national headlines may frighten us, it’s important to remember that the Bay Area has consistently had a stronger economic base and thus a more resilient housing market than most other parts of the country. That’s especially true with Silicon Valley, the Peninsula, and San Francisco.

Why is it that the Bay Area seems to fare better than many parts of the U.S. when economic turmoil strikes? One reason, of course, is the rapid growth of new Silicon Valley companies, and along with them, high-paying jobs. Another is the booming social media sector, which is also being led by Bay Area firms (Facebook, Twitter, LinkedIn). We’re also the center of the rapidly expanding biotech field and the burgeoning “green” technology industry.

According to the Bureau of Labor Statistics, seven of the nine Bay Area counties saw year over year employment growth. Additionally, the jobs being created tend to be much higher-paying positions than elsewhere in the U.S. Santa Clara County recorded the highest average weekly wage in the state, as well as the nation, at $1943, more than twice the national average, followed by San Francisco ($1573) and San Mateo ($1564).

A couple of recent reports by the Bay Area Council underscore why our local region really is at the forefront of job creation.

According to a report released by the Brookings Institution, in partnership with the Bay Area Council Economic Institute, the San Jose-San Francisco-Oakland Bay Area now leads the nation in clean tech jobs, with 11 percent of all US clean tech jobs located in the region. The Bay Area exports more than $1 billion in clean tech products, including building control systems and electric vehicles. 

What does this translate into as far as hiring? The Bay Area now supports 70,679 clean tech jobs (51,811 in San Francisco and 18,686 in San Jose). In San Jose, the largest segment is wind energy with 3,000 jobs, and the fastest growing segments were Fuel Cells, where employment grew 24.7 percent in the past seven years, and Wind Energy, where employment grew 17 percent. In the San Francisco-Oakland area, the largest employment is Professional Energy Services with 7,532 jobs.

Likely due to the passage of the Global Warming Solutions Act, and various tax credits and incentives, between 2003 and 2010, clean tech jobs grew by an average annual rate of 5.4 percent in San Francisco and 12.6 percent in San Jose, far outpacing the 4.2% pace of job creation for jobs nationally.

The growth of the clean tech sector in the Bay Area is one more reason why local hiring is one the rise, according to another study by the Bay Area Council. In spite of the economic headwinds at the national level, small and medium Bay Area businesses are still looking to hire over the next six months, researchers found. The business confidence index – the number that distills the survey findings – registered at 62. A reading over 50 signals positive economic times, while below 50 is negative.

“Despite all the national talk about a dreaded double-dip recession, the Bay Area seems to be weathering the recovery much better than other regions,” said Jim Wunderman, President & CEO of the Bay Area Council. While acknowledging the economic concerns, Wunderman said, “Confidence amongst business leaders continues to slowly build.”

All of this is not to sugarcoat our current economic problems. We’re certainly not out of the woods yet and we have a ways to go before we see a full housing market recovery. But we are making progress, even if it’s not at the pace we’d all like to see. And given our region’s track record of economic growth and leading the way in the creation of jobs for the future, I’m confident we’ll continue to see better days ahead.