Response to Client question re: Market in the California Bay Area

Here is my response to an investor’s question regarding market activity and pricing in the California Bay Area. I received this buyers question via my Plaxo (social networking) site. It will give you a general idea of the Bay Area market. As I mention below, Real estate is a local regional market. If you have questions on a specific city or neighborhood, please let us know.

 

It depends which market you are looking in to invest. Trends and data are different in each local/regional area. In the areas hit hardest with REO's (foreclosures) we are seeing sales volume increase. The prices in these areas have gone down 20, 30 and 40% from their '05 highs. There are now multiple offers and some go over asking. Prices are low...range from about $150K-$400K avg for a newer single-family home. Rents are stable. In the areas with good job infrastructure we have seen prices roll back about 5%-15%. There are some REO's (foreclosures) but not a lot. Houses tend to sit on the market for 3 months or more--it depends on how they are priced. The good priced homes go faster. Investors are out in the market now. There are 2 large funds purchasing $20MM-$50MM in housing inventory in Northern California. The bottom will be seen soon. Of course we don't know it is the bottom until it has already started to go back up. Investors feel that they get the best pick of the homes now even if the bottom is not for another couple of months.