But the Market is warming up . . .
Tuesday was 1/11/11 (kinda cool) and there was just one state in this whole United States of America that DIDN’T have snow on the ground (it was Florida, not Hawaii)!!
I had a new listing on Broker’s tour this week and I was shivering the whole time with the door continually opening and closing as a steady stream of local Brokers and Agents came through to view the home. Those of you who know me, or have been working with me over the past few months know that for most of 2010 I’ve been COLD!
This was one of the coldest summers I’ve ever experienced in Northern California – and we all know what our weather was like – COLD! (Please forgive me my few East Coast readers – I know that we really don’t have anything to complain about here – still, below freezing at night is COLD!).
But . . . the Real Estate Market in our little world is definitely not cold – in fact I see it warming considerably. 2010 was my best year since “the crash” and I am expecting to more than double my business in 2011. So am I the anomaly? I don’t think so. We had our first office meeting of the New Year this morning and it was packed and full of energy! We had more new listings, sales and “Coming Soon’s” than we’ve had in months – maybe years!
So inventory is beginning to pick up (thank goodness!) and many of the “fence sitters” are hopping off the fence as they see interest rates creeping up (still historically crazy low – but definitely inching UP, not DOWN).
As you may know, I have a love/hate relationship with the variable “price per square foot” value when it comes to Residential Real Estate. After twelve years in corporate real estate where that tool was THE TOOL – I’ve learned that in Residential Real Estate, it’s a start – but there is much, much more to the picture in home pricing.
Still when it comes to looking at Year Over Year (YOY) data – price per square foot is one of the most basic, reliable tools in determining which way the market is going.
Alamo is going up – teeny tiny up, but up. From the top of the market in 2006 ($504 a square foot) to 2009 ($376 a square foot), we saw a drop of 27% in the average price per square foot. By the end of 2010 we were at $380 a square foot – almost a 2% increase from 2009.
This puts us back at 2002 / 2003 pricing – which is about what I was expecting. Some nay sayers claim we will land closer to the 2000 / 2001 level – but that would represent almost a 40% drop from the top of the market – and I just don’t see that happening.
The problem with all of this is that our little world (Alamo, Danville, Diablo, LaMorinda and Walnut Creek) isn’t cookie cutter and will always have homes that sell at extreme ends of the spectrum, thus skewing the data. While we have continually held over the past three years at about ten foreclosed homes in Alamo (this week there were just 6) – those that do come to market are BAD – and sell WAY below market bringing the average price per square foot down.
But we have many more great homes, priced right that are selling quickly – one on the Westside sold recently for $606 a square foot – and it appraised at that value!! To say it’s complicated and confusing is an understatement!
Next week I’ll write about the “shuttering” of eleven markets for Zip Realty and how I could have called that one; why this complicated market demands smart dedicated Real Estate professionals to shepherd buyers and sellers through this crazy mine field. But that’s for next week.
Spring is the traditional time for the market to pick up, so some of this may just be seasonal. But if my Real Estate gut is right (and it’s been pretty good most of my professional life☺, we’ve seen the worst of it in our little world and we will hold steady for most of 2011. Prices have stopped dropping, and interest rates are going up – hmmmm, I think it’s time to buy or sell.
I can only hope that as the Real Estate market warms up, the weather does too – or maybe I should just put on another sweater!