May Flowers...and Real Estate Sales

As we head into the heart of this year’s spring season, I thought it would be helpful to share what we are seeing from a national perspective in the housing market and point out a few reasons for optimism in the months ahead.
Bruce Zipf, president and CEO of NRT, our national parent company, said this week that our overall business results have managed to exceed expectations, thanks in large part to a surprisingly resilient high-end market, especially here in the Bay Area.
Normally, we judge the strength of the housing market by looking at current sales volume against the same time last year to gain a sense of how things are improving. But we couldn't properly compare data from this March and April due to the artificial stimulus effects of last year's Home Buyer Tax Credit. In May, these effects should lessen and give us our first true glimpse of the market's strength, if we continue to see improvement in our market as we head into the heart of the spring buying season.
Our Cupertino office is seeing growing momentum from buyers looking to take advantage of mortgage rates while they’re still low, as well as prices that remain affordable. In fact, we continue to have more qualified buyers than listings. This is resulting in multiple offers for many attractive homes. Buyers are coming in with a lot of cash or all cash to win out the competition. Because obtaining loans and appraisals is on ongoing problem, these all-cash offers usually take priority. We are back to having the majority of our sales involve multiple offers. A very original fixer-upper was listed for $988k, got 11 offers, and was bid up about $100K
This is not to say that every market around the Bay is experiencing the same strong buyer demand. Certainly a number of communities have more balanced markets, and some homes continue to sit while others sell briskly. But in general, we’re seeing well-presented, well-priced homes selling much better today than they did a couple of years ago.
Another reason for optimism is that mortgage rates are likely to remain affordable for some time to come. I know a lot of market-watchers were concerned that the Fed could raise interest rates soon in response to inflation fears and the end of the government’s bond-buying program. But Fed Chairman Ben Bernanke largely put those fears to rest in his press conference this week.
So as we look to May and the upcoming summer season, there are many reasons to be encouraged that our housing recovery will continue to gain traction – especially here in the Bay Area.