An Expert Opinion!                                                                      10/10/2007 Livermore, Ca

Just heard a presentation by Gary Watts, Real Estate Economist....He's more optimistic than most! Finally. Gary is saying the media version of our current real estate downturn is overstated and out of context. Lot's of statistics were presented in contrast to the media prognostications. Here's an example. "Only 3.23% of all sub-prime loans have entered the foreclosure process while the experts forecasted 7+%." Does that mean our market is only half as bad as we thought? Maybe, maybe not but the big important trends that have fueled buyer demand through the first half of this decade appear to be still intact according to Gary. They include: Strong home buying by immigrants specifically Latinos and Asians, (the falling dollar doesn't hurt), A continued influx of baby boomers to our warmer climate, A continued expansion of our job market (buyers now sitting on the side lines continue to have their incomes grow) and a continuing supply/demand imbalance.
He closed by saying while most our lamenting the ailing real estate market, the smart cookie is buying or getting ready to buy. Why? .....Because this downturn is a short detour in a market with continued strong economic underpinnings. Exploit the current situation. Buy and don't follow the crowd and wait for the market to advance. If you do you'll have less buying power, less selection and probably caught up in a multiple offer headache!!!! Larry 925 216-5869

 

Are We Seeing Any Light? - Livermore, Ca - 9/21/07

OK, foreclosures continue to rise, but the Fed's finally cut rates. Some jumbo lenders ($417,000 & above) have reentered the market this week but property sales are still relatively stagnant. Are we starting to see the light at the end of the tunnel? Or ..are we just being wiped side-ways in real estate market that continues to writhe in pain? The truth is we just don't know, but let me give you some perspective.

This slow down was inevitable with or without the Sub-Prime mess. The sub prime implosion accelerated the market drop and victimized those who could least afford it. Although the percentage of non-traditional loans in California is relatively small compared to total outstanding loans, they did comprise over 60% of the new mortgage loans in 2005/06. This is a first and one might say (follow me on this) that this is a non-traditional strain on the market and once it's over the market may surface as relatively healthy. It's true the market was getting to frothy and buyers were starting to through up their hands in disgust but there were plenty of buyers out there and most of those buyers are still out there waiting for a better time to buy. Yes, I know you can't time the market but when you stand little to loose in waiting, buyers will at the very least, search at a more leisurely pace. That's where we are at. Now, most adjustable rate resets like those in the sub prime loans will take place by late April 08 and that could be the beginning of the end to the negative media bias towards the real estate market. This would be a big event because the most negative part of the current market is market psychology. Unlike past downturns, the underpinnings of our local economy are strong and buyers sitting on the side lines biding there time. Keep in mind there still exists a huge shortfall between the amount of new housing being built and the formation of new households in California. Like the South, this market will rise again. For now though, don't miss this buying opportunity if you are a buyer. The market bottom is perceptible only after the fact and buy then you could be playing the multiple offer game. We've been there, and like all market activity….It's A Cycle!
Larry Waelde, Assocaiter Broker 925 216-5869

A Market in Retreat! 9/15/07
OK, the Real Estate market presently stinks especially if you're a seller with no buyer prospects in site! So why has the San FranciscoBay Area median sales price edged up to a new peak of $660,000 recently according to DataQuick Information Systems. Therein lies the problem with a "median price" focus. It's just not an accurate measurement of short term price movement in housing. The median price is easily skewed up or down when a disproportionate volume of high end or low end homes sell in a given month. Currently, most local submarkets are not selling well, in part because banks are tightening qualifying standards due to the sub-prime meltdown. No, the average home is not appreciating, contrary to the median price advance. Bay area homes are selling at their slowest pace in 12 years and sales are down by about 21% from this time last year. However, not all sub-markets are behaving the same. In Pleasanton the ratio of available listings to pending sales is 8.4 to 1. Here in Livermore the ratio is 10.6 to 1. San Ramon ratio is 5.4 to 1. Dublin ratio is 5.8 to 1 and in Fremont the ratio of listings to pendings is 4.97 to 1. "The current rout for California homes sales is worse than the downturn in the first half of the 1990s and recovery could take as long as 18 months" according to Robert Kleinhenz, an economist with the California Association of Realtors. Many buyers are waiting for the market to worsen before they strike. If you are a buyer you should be actively looking, defining your neighborhood of choice and picking a qualified buyer's agent. You'll only see the market bottom in your rear view mirror...don't miss this buying opportunity!

 I continue to be impressed (and relieved) to see how consistent many real estate investors deal with the changing real estate landscape. Even though it is fairly obvious that we are in the "bumpy bottom" in the Bay Area market,, the "old timers" continue to prudently acquire real estate and invest in real estate funds. Yes the current short term market is a bit nerve racking. HOWEVER, it is my continued belief that Bay Area real estate is a very solid long term bet. I've been in real estate my entire working like starting as an appraiser in the 70s and my only regret is that I hesitated to buy in uncertain markets. Please don't hesitate to call anytime you have questions on the market, your property's value or where's the best place to invest. Larry 925 216-5869

I remember when it first hit for me - in 1980. The prime rate hit 21.5% (currently at 8.25%) and the country was experiencing double digit inflation. Mortgages got as high as 17.5%. As you all know, Bay Area Real Estate bounced back with a vengeance. It happened again in 1989, and guess what - same outcome. Why .. Because it's absolutely the best place in the World to live and work…..That's Why!

 So where are we today? Well, it's not over…. And I am still watching and waiting for final outcome, but if history serves us…. And the current data stream continues , we are in it every day, all day and we track sales in the Bay Area like there's no tomorrow.

Thinking about buying? Do it now. Ok Ok, it may not be the perfect bottom….but all indicators that we see are showing that we are there. Yes, there are still problem areas like Stockton but I can happily say if the trend continues, that we do believe that worst is behind us!! Larry