Though the Fed may have assisted the mortgage crisis a bit with its rate lowering and some policy changes, there haven’t been any significant changes in the San Francisco Bay Area market this past week that can be attributed to anything happening in the latest news. Perception is driving the market. The chasm between buyers and sellers seems to be closing a bit – but not quite enough in some communities.

Buyers are starting to realize that selling prices are not going to drop precipitously from where they are. Sellers, on the other hand, are starting to make the adjustments in condition and price that are necessary to remain competitive. Still, there are some sellers that refuse to lower prices to saleable levels, and buyers who are convinced they’ll be able to get an even better deal by waiting. We are seeing some sellers who don’t need to sell taking their properties off the market – if a deal is to be had, now is the time to negotiate it.

More than 640 homes were held open during the week. Attendance was spotty in some areas, while Half Moon Bay and other enclaves saw booming activity. High end properties continue to drive in the fast lane in our markets with exceptional open house activity, and multiple offer situations being reported. Palo Alto continues to report 100% of listings received multiple offers, however that enduring lack of inventory on the Peninsula continues to compel competition among buyers in the area. San Francisco and Marin also have booming high end markets. There are fewer multiple offer situations in the City, and a lower number of multiple offers when they occur, but a week does not go by when several agents in each of our San Francisco offices is involved on one side of a multiple offer situation.

Although the number of sales in San Francisco and the Peninsula is lower than YTD 2006, the median sales price continues to grow.

For the majority of the micro-markets within our San Francisco/Peninsula region, affordability at the entry level and available inventory at the higher end are our biggest concerns. Home Buyers and Sellers are not hearing this message from the media. Now, more than ever, it’s critical to know your market, and know just how local real estate really is.

The consensus seems to be that there are plenty of buyers out there, and that they are serious, qualified and eager to purchase. However, these same buyers are listening to media reports about the housing market and some are hesitant to commit to buying a home due to an erroneous thought that housing prices will plummet.

The reality is that in most Bay Area communities, housing prices are remaining steady, or seeing increases. In fact, DataQuick, a company that compiles data and reports on real estate trends each month, indicated this week that while median selling prices in Napa, Solano and Sonoma counties have seen moderate declines, every other county in the greater Bay Area saw an increase in median  prices ranging from 4 to 12.4%. This is not the time to sit on the fence. It is the time to commit, as our Walnut Creek manager eloquently stated, “to buying homes as opposed to houses.” Price and condition are always important deciding factors, but the deals are out there right now, so now is the time to decide!  And there may be even greater opportunity when we find out what happens after the Fed meet next week.

The upper tier market continues to hold strong in our region with most areas reporting exceptional activity. A $2 million home in Larkspur had a huge crowd for its open house and received three offers in one day. The inventory levels in the city and parts of the Peninsula are loosening up a bit and helping to spur activity. A condo in San Francisco received 11 offers, and a cosmetic fixer in the city’s Richmond district received 22 offers. Open houses were reported to be busy in most areas where our more than 600 homes were open for viewing. Listing inventory and sales activity were both reported as being steady among most offices.

Everyone wants to know the real story. It will be told, and powerfully so, next week when Southern California Economist Gary Watts presents “The Real State of Real Estate…What the Media Isn’t Telling You” on Thursday, September 20^th and Friday September 21^st.  Gary’s presentation is extremely timely, and dead-on. It will give you excellent facts and talking points with your customers.  He will be conducting three sessions -  in San Francisco, Santa Clara, and in San Ramon. Don’t miss this opportunity to be truly informed. I have attached the details, and I strongly encourage each of you to attend one of these sessions.

More than 250 homes were held open during the Labor Day holiday weekend and though many buyers were taking a home-hunting break to enjoy the fine weather, there was plenty of serious activity in most areas. Listing inventory and sales activity were both reported as being overwhelmingly steady in most areas. Offices are buzzing in anticipation of a busy September. There is pent-up demand for the new listings coming to the market this week.

As agents, buyers and sellers alike settle into the school year after refreshing vacations, let’s set the record straight as we move into Fall by rewriting the headlines from a new perspective. “99.2% of Mortgages are Not in Foreclosure.”   “Economy is Extremely Strong, with Many Business Sectors Reporting Huge Profits.” “The Global Economy is Exploding!”  “People Are Buying Houses.” Sadly, our media continues to focus on the negative and to create misconceptions in the minds of consumers about the housing market.

During our Coldwell Banker California Previews International Retreat in Monterey during the last week of August, more than 200 agents were treated to a speech by the renowned real estate economist Gary Watts. He handily dispelled the misconceptions and myths propagated about the current state of the real estate business, and made an excellent case for forecasting continued strength in the California housing market and the lending markets. Watts was so impressive that we have invited him to speak in all four of our regions in order to enlighten and energize you with a dynamic and informative presentation. Here are some excerpts:

“California is home to 36.5 million residents with a population growing over 800,000 last year. However, by 2025 our population will explode (nearly doubling) to 60 million people. With our large diversified economy, California will continue to prosper, the demand for housing will remain strong and as this housing downturn comes to an end, we will once again do very well!”

“The media will still report about massive delinquencies and huge foreclosures in the sub-prime market, but those reports will not be accurate because they don’t explain the difference between a delinquent payment, a notice of default or a foreclosure.”

“All you read and hear is that real estate is going down, yet last month, prices in the U.S. rose 3.4% from a year ago and California is up almost 1%. The Bay Area prices have gained 4.1% over last year and southern California median price is up 3.7%.”