Slight change of format for the catch up. First new listings by week as compared to last year.
New Listings Week ended:
Jan 10th 6 (6)
Jan 17th 8 (17)
Jan 24th 8 (10)
Jan 31st 9 (12)
4 week total 31 (45)
Thats a a very big drop over what was anemic data last year. Last year prices exploded with few listings and huge demand and this year new supply is far less. If there was any doubt there would be a seller’s strike that has been answered.
Unless demand falls off a cliff forget about falling prices this Spring!
Anecdotally I’ll add the new listings skew heavily to people leaving the area, people aging out of very long time homes and high end homes. New listings of nice regular homes up here are pretty non-existent.
Now lets look at the demand side:
New Pendings Week ended:
Jan 10th 6 (5)
Jan 17th 13 (13)
Jan 24th 13 (23)
Jan 31st 18 (16)
4 week total 50 (57)
Thats not much of a drop off. There is defintely more to buy this year than last so that explains some of it. But rates have come back down and prices are down since last year by a decent amount.
Demand has NOT fallen off a cliff. Not only dont I expect to see prices keep falling I think we are gonna see them take back some of those second half losses! Buyers are back! This is a bit of surprise. And maybe more than a bit
Here are a couple anecdotes. A friend/past client called me about a relative that had been renting in my hood after relocating a couple years ago from Bay Area. The friend/client was nicknamed Dr Doom by our friends and was as bearish as anyone ever was on this site back in the day. Relative had opportunity to buy direct from neighbor a couple doors down from long time owner. My friend told his relative he thought it was probably ok at that price but he should talk to me first. I was surprised my friend wasnt expecting doom. When I heard the price I said that is probably a good 10% below the market in Fall and what I expect prices to be end of year. Its the perfect house for everything they want and would attract lots of attention even in a bad market. He said the seller wanted to stay a few months and close this Summer. My advice was I thought this Fall would be at or near bottom so safe to buy now. But I insisted he should close asap! If it went longer something could happen to get seller to change mind so better to close asap and work out deal for seller to stay a few months and that is what he did. The seller had an agent who would be handling everything so i was just advising the relative.
A week later a house not as nice listed for $300K more than his contract price. It sold in a few days with 3 Bay Area families bidding for it. My friends relative is gonna close with $300 to 400K of extra equity. Nice win for them and seller has no out. However, seller has over $500K taxable gain so additional purchase price would be heavily taxed. Im sure they arent happy but they will be fine. Call it a win!
The property I am interested in buying would be all or mostly cash. It would require liquidating a large amount of my equity holdings. Its a very special/unique property that meets some future needs to a tee. It is also an opportunity to leave a family real estate legacy beyond my years here. As conservative as I am I was still unsure. Last week I met with my long time (30+ years) very conservative financial advisor. I told him my plans and explained my thinking. Then I said OK talk me out of this crazy idea! I about fell over when he loved the idea. He said I should do it but postpone my ADU plan as I could do that anytime and I now realize he is right. He’s gonna help figure out the optimal mix of leverage while balancing tax repurcussions. Im pretty much all in on the idea. Who would’ve thought it?
