SubscribeWhat Happened To The Market? – A retrospective on June 2009
July 6, 2009
With the warming weather, June saw the market continue to heat up, as Buyers jumped back into the market aggressively, resulting in strong sales across the area, especially for single-family homes under $1.5 million. Homes that are attractive to the bulk of the market, with updates, attractive floorplans, and four bedrooms are commanding multiple offers again, with a few homes in Los Altos and Palo Alto recently receiving over ten offers and selling for cash.
A combination of continuing low interest rates, rising consumer confidence ( we are getting used to bad economic news), and the closing window for tax incentives, is fueling the current buyer activity, so we will see how long this will continue. The state is running out of funds for it’s tax rebate, but the US government has the printing presses running to fund its programs.
The Anderson School of Business at UCLA released its latest report for the California economy last week, and senior economist Jerry Nickelsburg writes “there is nothing happening in California that will help pull the state out of recession in advance of the nation.”
“The dire conditions surrounding the state budget will contribute to prolonging tough conditions in California, according to the report.
Yet that the real risk for California, Nickelsburg writes, is the possibility that there will be no budget agreement at all and that the chaotic and inefficient spending cuts that would likely follow would have an even more severe impact on the ability of California to stem the downturn in economic activity this year.
Overall, the forecast for California is for a very weak first two quarters of 2009, to be followed by very little growth in the last six months of the year. The economy will begin to pick up in 2010 and return to more normal levels of growth in 2011.
The expectation is that total employment will contract by 3.5 percent in 2009 and will not grow in 2010. Once growth returns in 2011, it will rise at 1.8 percent.”
The high-end, over $3 million continues to lag, as usual, but the lack of stock profits and the international economic downturn has really depressed the market for luxury homes over $5 million. Two noteworthy listings in Portola Valley and Woodside really symbolize the luxury market currently.
1990 Portola Road in Woodside has been on the market for two months, and just was reduced from $12,500,000 to $8,500,000. That isn’t a mis-print. So much for the benefit of Larry Ellison living next door. . . . This could be an excellent opportunity for the right buyer. If you are interested, I’d be happy to show it to you.
In Portola Valley, 5070 Alpine Road is Portola Valley’s first REO property. Priced at $7,895,000, the bank is willing to provide attractive financing terms on a $1.2 million down payment. Again, I’d be happy to show it to you if you are interested and a $6.6 million mortgage doesn’t frighten you.
On to the numbers:
Atherton:
Currently, the Median Price of a Single Family Home in Atherton is $4,095,000 with a range of $1,075,000 to 16,800,000. 36% (versus 48% last month) of the homes in Atherton have had price reductions, as Sellers are accepting that the market has shifted, and the average number of Days on Market is 132 days versus 133 last month.
Menlo Park:
The Median Price of a Single Family Home in Menlo Park is $1,297,000. 39% (versus 38% last month) of the homes in Menlo Park have had price reductions, as Sellers are resisting that the market has shifted, and the average number of Days on Market has risen to 135 days from 127 last month. If you look at individual homes, the ones that are well prepared and marketed are still selling quickly, some with multiple offers, while those that are overpriced, or are less desirable due to location, odd floor plans or deferred maintenance issues are being passed over.
Palo Alto:
The Median Price of a Single Family Home in Palo Alto is $1,595,000. 41% (versus 41% last month) of the homes in Palo Alto have had price reductions, as Sellers are resisting accepting that the market has shifted, and the average number of Days on Market has fallen slightly to 96 days from 99 last month.
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Our market in Bergen County New Jersey is doing well in the $1,000,000 and under and moderate up to $1,500,000 range. The real high, end over $1.5m to $58M is very slow. In some towns, the houses are compressing down in price to the smaller homes under them in price. The price spreads between different size homes and properties are closing.
Hi Richard,
How is the Wall Street fallout affecting Northern NJ prices and sales? Are the newly unemployed from The Street making up a large percentage of sellers?
Chris