I attended a Real Estate Economic Update last week and it painted a relatively rosy picture for the Bay Area Real Estate market. Really?!? Are we (the East Bay markets) really different? And if so – why? We have always been about six to eight months behind The City (San Francisco), the South Bay and the Peninsula. They hit the bubble before we did, they crashed before we did and we are still lagging while they are hot, hot, hot. Multiple offers at very strong prices.
We know that is probably because high tech and finance drive those markets, and we have less of that here. The good news is, that economic element has helped to hold our prices, in general, lower. And don’t even get me started on how that has affected our schools (we have twelve years of great public schools because from financially struggling to insanely affluent, we have not abandoned our public schools – unlike most of The City, The Peninsula and South Bay).
So we are the East Bay Area middle class and our Real Estate values have always been better because of that. I suspect that is also why from a real estate perspective we lagged behind other Bay Area pockets.
So are we hot, hot, hot? No. This has not been a great year, which surprises me because last year was so strong for me. It may just be an anomaly – our board is full (how we track office activity) and transactions are up. Prices are down, but not dramatically, and interest rates are still amazingly low.
Perhaps it’s due to the lousy weather we’ve had, or that consumer confidence is still on the fence about our economic recovery. You’d think that everyone in the Mid West would be moving to California to escape the flooding there.
And look at the Bank Buster numbers (to the left)! Alamo Notices of Defaults, Auction and Bank Owned properties are all dramatically lower than last year (-13%, -19%, -44% respectively Year over Year). Danville is similar with -31%, -9% and -5% respectively. I think this is the first time since I’ve started tracking these numbers that those numbers have ALL been down, and ALL been down pretty dramatically! And when you look at the TOTAL number of distressed homes (in default, scheduled for Auction or foreclosed), it continues to be a fraction of our residential roof tops (about 1% in both Alamo and Danville).
Now don’t get me wrong – I am NOT suggesting that Real Estate is fat and happy in our little world. It’s a VERY tough market, the toughest I’ve been through in twenty years – but the wheels ARE NOT FALLING off. To hear the media we have “double dipped” and we are back in a recession. I just don’t believe it.
Regardless of what the economists say or what the statistics and trends point to, this is still a wonderful place to live. We have lovely, established communities, great schools, a temperate climate (usually) and a better than average standard of living.
So call me Pollyanna, and even though the market hasn’t rebounded as fast as I predicted earlier in the year, I still think it’s a great time (and place) to buy or sell a home. And remember that if you have any questions about the value or your home, or what’s happening in your neighborhood, just give me a ring. I’m here to serve you.