Now that we have put the prime vacation months of July and August behind us we should be starting to see increased activity in the real estate market but unfortunately this does not seem to be the case.

Before going on to that, let me just describe how I see a "normal" year in real estate:

I have found that there are usually two quite well-defined "windows" in the year when most of the activity takes place. The first, and major, window is the period from Easter to Memorial Day. This is almost always when homebuyers are writing offers. A lot of it is related to schools of course - families moving into the area have to have a home under contract before the school district will allow them to register their children in a new school. Many agents will do half their annual business in this period.

The second window is much smaller, the period from Labor Day to Thanksgiving (sometimes even just Labor Day to Halloween). Many people just want to get the kids back to school before buying a home but once they get to Thanksgiving, the Holiday syndrome takes over so many lose sight of that new home until next year.

Now I'm obviously making generalities here. People move at all times of the year for a variety of reasons that are often not discretionary. Even so, I bet if you check the statistics for Pended homes by month in any particular year, you will find that the above is an accurate observation for any primarily residential area. I don't include vacation home areas in this for obvious reasons.

Now accepting the above, we should be starting to see increased activity by now. Yet look at these figures I just drew down from the MLS:

Pended Homes in San Ramon

June     81
July      55
August  65

So far, so good. June was still active and numbers dropped in the prime vacation months of July and August. Now we are half way through September so we should be expecting to see at least 30 and probably 40 or so homes Pended in the month to date.

In actual fact, the figure is just 18. When you consider that there are around 400 homes currently for sale in San Ramon, this really gives food for thought.

Obviously this is a small amount of data and we will have to wait until the month ends to get an accurate picture but regardless of any of these figures, it seems to me that if anybody want to have a good chance of selling their home in San Ramon in a reasonable time, they better make sure to price it very aggressively. Otherwise it will just become another home listed for sale.

Yes it's open! The new Plaza at Gale Ranch shopping center at the corner of Bollinger Canyon Road and Dougherty is now open to the public.

Anchored by the most impressive, and certainly the largest, Safeway I have ever seen, this shopping center provides residents of Gale Ranch and Windemere with support that they have been crying out for.

Right now (early September) only Safeway is open, including the Safeway discount gas station. Many of the other units have tenants already though including a Peet's coffee shop and Cactus Jack's Bar and Grill. The Safeway store has a Starbuck's in an annex of to one side and also a sit down Sushi Bar as well as numerous food stations of varying kinds, both hot and cold. The success of this sh oping center is assured and the residents of Windemere and Gale Ranch are undoubtedly well pleased.  

I just finished watching a video showing the replacement of a major section of the eastern span of the Bay Bridge over the Labor Day weekend. Charismatic main contractor, C.C. Myers, ecpalined the process and made it sound very easy and straightfoward, which I'm sure it wasn't. Nevertheless, the project was completed 11 hours ahead of schedule, undoubtedly a credit to his project management.

The Bay Bridge closed at 8 pm Friday and re-opened just before 6pm on Monday evening. This is the firsttime the bridge was closed to all traffic since the 1989 Loma Prieta earthquake.

According to all reports, numbers of visitors to San Frabcisco from the East Bay were very much the same as on any Labor Day wekend and people adapted well to the closing. BART laid on extra trains and some people just went the long way round using either the Golden Gate ot the San Mateo bridge depending on where they started from.

Now once again, San Francisco is fully connected to the East Bay.

Well it's been a while since I made a Blog entry. The fact is, I have had a busy year so far, I am pleased to say. Now, I am doen to one listing and two homes in escrow that are coming up to closing so at last I have some time for myself.

So what about the San Ramon real estate market? For me it's been fine this year. Other agents are tearing their hair out with too many listings that won't sell. As I seee it, there are still a lot of overpriced listings. Many sellers (or would be sellers!) still seem to think we are in the 2005 market and are pricing their homes accordingly. Agents who should know better are taking these overpriced listings and complaining that they are not selling. What do they expect?

In my view, an experienced agent has a responsibility to explain the facts of life to a potential seller. The figures are all there in black and white. We all have access to the same data. If the last 6 months comps show a home is worth no more than $800,000 there is no point in listing it for $850,000. I don't really blame the sellers. They don't understand the intricacies of pricing and valuation but agents should educate them.

In the San Ramon Valley, when listings expire, they are re-listed by the original agent 90% of the time at a reduced price. If it is reduced enough, the home sells. Otherwise the cycle repeats itself. With that knowledge many agents are much more concerned about getting the listing at any price rather than telling the seller the truth about value and losing the listing to another agent. The concept of buying a listing is alive and well in our area.

I have been fortunate in that most of my listings this year have come from either referrals or from people who know me because of my farming activities. I see homes for sale in my farm area at inflated prices and it makes me sad. And these are with experienced agents.

In reality, our market is fine provided that a home looks good when it goes to market, is professionally marketed to potential buyers and other agents, both by conventional meand and via the Internet, and is priced right. It really is a neutral market right now. San Ramon has 3-4 months of inventory (single family homes). That would seem to favor neither buyers nor sellers. Sure, July has quitened things down a little. August will probably be the same but we'll be back with increased activity in the fall.

Life is good!

Real estate sales activity was slow in virtually all areas throughout 2006 for reasons that are easy to define.

The superheated market that we experienced for the past few years came to a sudden end in the last quarter of 2005. Multiple offers became a thing of the past and home sales ground to a halt. Most sellers were unwilling to accept that buyers were no longer willing or able to pay the prices being asked for homes, so many sat on the market for a long time. As price is a function of supply and demand, a high level of inventory caused home prices to fall further and the only way to achieve a sale was to price your home at a lower price than similar homes were being offered at. Motivated sellers achieved sales. Less motivated sellers had homes sitting on the market for months and many just failed to sell.

Inventory levels peaked in September and have been steadily reducing since then. Amazingly, they have fallen by almost 50% in just the last 3 months. Even so, sales have not increased noticeably. It is therefore apparent that the reduction of inventory is as a result of people failing to sell their homes and taking them off the market rather than them having achieved a sale.

It can also be seen that the average sale price has fallen over the past few months, although perhaps not so much as one might expect.

Now lets take a look at some year on year figures. Rather than just looking at average sale prices of homes, let us consider average sales price per square foot. As can be seen from the table below, this reveals a telling story.

Average Sale Price/Sq. Ft. - Single Family Homes

Throughout much of 2005 home prices rose at an extremely high pace. This was the time when sellers were frequently achieving a sale within days of listing their homes for sale. And with multiple offers, all above the asking price.

Now, we have seen the inevitable correction. Alamo and Lamorinda have shown resilience, the former having consistently increased in value. Danville and Walnut Creek prices have fallen back to 2004 / 2005 levels while San Ramon prices are even lower than they were 2 years ago. Although I haven’t shown the figures here for the lower priced areas of Concord, Martinez and Antioch etc., I can state that prices in these areas have fallen even further, as a result of excessive inventory in these areas.

But the worst does look to be behind us and we can probably look forward to a more stable time in 2007. Prices appear to be steady and we may even see a little growth but there will be no frenzied buying activity and buyers will be able to consider their options before deciding to make an offer on a home. This is what is supposed to happen in a normal real estate market. If you plan to buy or sell a home this year, I wish you every success.