Taking the Market's Temperature

Before we get to today's City-centric post, just a quick reminder that we regularly update your favorite real estate blog with helpful info and links. Rather than bug you with an email for every new addition, we encourage you to check back often to see what's new. This week, without telling you, we posted a note about the impact of the Fed rate cut (see post below) and added new links to recycling resources in Marin (see link list to right). Lastly, don't be afraid to leave comments about postings that you found helpful, interesting, or even confusing. Your feedback will help us tailor your favorite real estate blog to your needs.

Now without further ado, some illuminating data on the SF market.

First, for those who don't know (and why would you?), the City is broken up into MLS districts (by numbers) and subdistricts (by letters). For example, the central part of SF is Disctrict 5. Noe Valley is district 5C. Click here to see a map of all City districts and subdistricts.

Second, one way we measure the temperature of a local market is by looking at the percentage of active listings under contract. In other words, how many listings have sold, but not yet closed? Generally speaking, when 35% or more of active listings are under contract, we consider this a seller's market. (This was widely experienced over the past five years.) When 25%-35% of active listings are under contract, we consider this a balanced market. When less than 25% of active listings are under contract, buyers are in the driver's seat.

On Friday, September 22, 2007, here's what the market looked like:

District 1 (Northwest) - 27% under contract

District 2 (Central West) - 32%

District 3 (Southwest) - 21%

District 4 (Twin Peaks West) - 29%

District 5 (Central) - 33%

District 6 (Central North) - 35%

District 7 (North) - 32%

Distrcit 8 (Northeast) - 32%

District 9 (Central East) - 29%

District 10 (Southeast) - 21%

Citywide, active listings spend an average of 48 days on the market prior to selling.

(Statistics include all single family homes, condos, lofts, and TICs. Multi-unit listings were not included.)

We will track this data over time so that regular readers can get a sense of which way the market is moving. Remember, markets are seasonal. Expect Decmeber to be cooler (read: more buyer-friendly) than September.

Comments welcome...

Fed Cuts Rates. Now What?

During today’s highly anticipated Federal Reserve Meeting, the Fed announced a reduction of the Fed Funds Rate and the Discount Rate by 0.50%.

What does this mean for home loan rates? Not as much as you might think. For now, anyway. To be clear, a cut to the Fed Funds Rate impacts the “Prime Rate,” which affects home equity lines of credit, credit cards, business loans, car loans and other consumer loan rates. This rate change, does NOT, however, have a direct correlation to home loan rates. That said, a reduction in the discount rate increases liquidity in the market. How this liquidity will impact lending rates is anybody's guess. Moreover, its impact on the gap between conforming rates and jumbo rates is unknown. As always, you need all the facts before making any decisions.

If a purchase or refinance is in your future, please contact us. We’ll be glad to put you in touch with a knowledgeable and reliable mortgage broker who can answer all of your questions.

Outstanding Online Resource

Next Generation Real Estate offers CleanOffer to all clients and friend. 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!

When Sales Go Down, Prices Go Up

Only in Marin...

Faithful readers of Thanks for Your Referrals, the occasional newsletter from Next Generation Real Estate, will recall an article from our January, 2007 issue, in which we encouraged nervous properties owners to maintain a long term outlook on their investments. To illustrate that point, we offer newly available data to support a buy-and-hold strategy.

These statistics strongly suggest that major fluctuations in the Marin real estate market have a greater impact on housing units sold than on sales prices. Translation: In "down markets," Marin County home owners simply stop selling, rather than selling for less. The first chart below tracks average Marin County sales price from 1975-2006.

This next chart shows average units sold per year in Marin County over the same period.

We find these two charts highly illustrative. When it come to stocks and bonds, we've often been told that trying to time the market is a fools errand. It appears the same edict applies to Marin County real estate, as well.

You Never Forget Your First time

Next Generation Real Estate is getting blogged down. And it's about time!

Welcome to our latest resource for clients, friends, relations, and people with too much free time at work. Check back often for timely reports on the state of the Bay Area real estate market, as well as updates on the lives of your favorite intergenerational real estate team.