Market Flash from Coldwell Banker

Last year at this time they said, “For all our regions, February to March sales activity rose by 15% at least, almost 40% at most.” And we saw a similar trend again for March 2008 as sales rose in many of our Northern California counties. Now the question is whether this is the start of a pattern leading us into the late spring and summer months?
In Santa Clara County: Sales are down year-over-year, however, that is while contrasting a particularly strong March 2007 with March 2008. We learn more from Santa Clara’s numbers by looking at an 11% increase in sales since February, or a better-than-most 10% decline in median for the year.
Interest Rates: The Fed seems to be on the right track. New York Times’ columnist Paul Krugman said recently, “I believe we’ve been lucky to have Ben Bernanke as Federal Reserve chairman during these trying times. He has thought long and hard about both the Great Depression and Japan’s lost decade in the 1990s, and he recognized, more quickly than others might have, that we were in a situation bearing a family resemblance to the great banking crisis of 1930-31. His first priority, overriding every other concern, had to be preventing a cascade of financial failures that would cripple the economy.”
Do we have a crippled economy? No, we have an economy that is not what we are used to. Do we have “easy” credit? No, but if you can qualify, 30-year fixed is at 5.72%, 15-year fixed is at 5.29%, 5/1 ARM is at 5.31%. These are remarkably nice numbers and much lower than we thought they might be this spring.
Inventory: It is spring and because of it, many counties are seeing increased inventory in their marketplaces. However, at the very high end, you might not find the selection you have enjoyed for the last year or so. This means the market is recovering, and that is a good thing.
Overall Assessment: Guarded but certainly not gloomy. Prices have adjusted downwards in many areas but interest rates have stayed quite moderate in exchange for tightening the criteria on qualifying borrowers which is helping buyers. If you are getting ready to sell your home, price your home competitively and be sure it shows well; and if you are getting serious about home buying, be sure to get pre-qualified first. You may discover that this spring and summer are the most rewarding seasons in a couple of years.