Record NorCal Sale

While we're not in the habit of promoting other listings ahead of our own, we also understand the importance of good cocktail party conversation, especially around the holidays. With that in mind, we thought you'd enjoy reading about the recent $65 million sale in Belvedere. If any of you want to be notified if it falls out of escrow, just shoot us an email.

Local Market Continues to Cool

Check out this nice short article from the Chronicle. Sometimes we look for complicated explanations for market movements when the real explanations are fairly simple. In short, money is harder to get, buyers are more hesitant, inventory is low, and the market is cool. Simple as that...

North Bay Home Search

A while back, we offered up access to our CleanOffer account as a free perk to our friends and clients. Many of you took advantage of this. 2008 is shaping up to be a very good year to buyer real estate. For those who would like to track the market on their own, we've reposted our original invitation below...

Next Generation Real Estate offers CleanOffer to all clients and friends. This site tracks the North Bay MLS (including Marin, Sonoma, Napa, and Mendocino) and allows users to create custom searches, track listings, and review property details. We feel it's the most useful local site for buyers, sellers, and those who just like to keep up on the market in their area. CleanOffer is a pay site. Fortunately, Next Generation Real Estate has purchased an unlimited subscription that allows all our clients and friends to use the site for free. Simply register as our client and you'll get unlimited access. Registration instructions are below:
Click on the link above. (There is also a permanent link in the "Links" section of our blog.)
Click on “Buyers & Sellers Register Here.”
Click “I Agree” on the Membership Agreement page (assuming you do agree).
Fill in the registration form. Type “Jess Pearson” when they ask for agent’s name.
Click “Jess Pearson.”
Click “Submit.”
Click “I accept.”
Click “Submit.”
You’re done. Happy searching!

Who's The Victim?

It's been interesting to listen to the various politicos and economists talking about who's at fault for the "mortgage meltdown." Was it predatory lenders or naive buyers, bad lending rules or bad borrowing habits?

Either way, it's natural to assume that the now-foreclosed-upon borrowers somehow deserved a better fate. Even if they should have read their loan documents more carefully or considered the impact of an inevitable rate hike, there something about a hardworking family losing its home that tugs at the heart strings.

It turns out, however, that not every "victim" of the lending crunch was an "ordinary American homeowner" just trying to get by. According to the Chronicle, "More than one-fifth of 6,557 Bay Area properties that fell into foreclosure from January through September this year were owned by investors." House-flipping, as it's known, had become such a popular regional investment strategy that these small time real estate moguls now account for over 20% of our foreclosure "victims."

Read the whole article to see just how common this has become.

True, it's never a happy story when someone goes belly up, but it's a lot harder to believe that someone who owned eight investment properties didn't know the risk.

Tasty Freeze?

The unfortunate comparisons to drug addiction aside, this SF Chronicle article on the potential fallout of a rate freeze for subprime borrowers is worth a read. As someone currently parenting a three-year-old, I have to wonder if the proposed freeze is a way of rewarding bad behavior. "Since you didn't eat your vegetables, you only get one scoop of ice cream instead of two." Time will tell...

Supply & Demand

A recent Q&A from the Marin IJ featured the following information:
"Between 2000 and 2006, California's population increased 7.6 percent. During the same time period, housing units increased 6.3 percent. When you are talking about a population of 30 million people, a discrepancy of even 1 percent in available housing means there are 300,000 more people competing for a place to live.

"Again according to the Census Bureau, in California we have an average of 2.9 people per household. If you call three people a household, there were still 100,000 more housing units needed..."

While we at Next Generation Real Estate are not census takers, we believe it's safe to assume that the population growth rate will continue to be strong. If anything, however, housing starts have fallen off dramatically in 2007. Normally this would be a sign of broader economic decline. But that's what makes this market downturn so unusual.

Historically, real estate suffers as a result of broader economic troubles. Layoffs, inflation, and high unemployment cause corrections in the national real estate market. This time around, however, those traditonal problems were not the driving force behind the correction.

So we're left to wonder...with interest rates, inflation, and unemployment all relatively low, how long can the correction last? With the decline in new construction, is it possible that demand may outstrip supply by an even greater margin than before? Could the national market come roaring back to its 2005 heights? Stranger things have happened.

Holiday Happenings

The lead is buried half-way down this SF Chronicle article, but it's worth reading for anyone wondering what goes on in the market. It echoes what we're experiencing, especially in the City. Namely, that the market is more active over the holidays than it has been in recent years. Admittedly, not everyone wants to move over Christmas week, but the article makes one solid point: any buyer or seller out there right now is a serious buyer or seller.