The October Market Wrap Up

Let’s take at look at some October numbers for single-family houses and condos that sold in the Bay Area and see how they compare to a year ago.

San Francisco County

• 529 homes sold in October
• The median sales price was $690,000, down from $699,000 in October 2008

San Mateo County

• 294 homes sold (through October 20th)
• The median sales price was $580,000, down from $640,000 in October 2008

Santa Clara County

• 1,845 homes sold in October
• The median sales price was $495,000, up from $489,000 in October 2008

Alameda County

• 1,385 homes sold in  October
• The median sales price was $371,000, down from $373,500 in October 2008

Contra Costa County

• 1,613 homes sold in October
• The median sales price was $275,000, down from $281,250 in October 2008

Marin County

• 245 homes sold in October
• The median sales price was $648,000, up from $599,750 in October 2008

We got these numbers from DQNews.

Dig Deeper Into the Trends

These numbers are for county-level trends in the Bay Area. To see what’s happening in your neighborhood, check out our stats & trends pages.

The $8,000 Home-Buyer Tax Credit Has Been Extended & Expanded

Earlier today, President Obama signed new legislation extending the deadline for the home buyer tax credit into 2010 and expanding it to include current home owners who are looking to buy a primary residence.

The Basic Requirements

You qualify for the tax credit if the:

• Home you’re buying will be your primary residence
• Purchase price isn’t more than $800,000

This credit is not a loan; it’s yours, but keep in mind you have to live in your new home for three years. If you sell the home in less than three years, you’ll have to pay back the money.

What’s Changed?

With the new legislation, buyers have more time to find a home and more buyers are eligible for the tax credit:

• New deadline: To qualify, you need to be in contract with a seller by April 30th & close on the home by June 30th (The previous deadline was November 30, 2009).
• Not just for first-time buyers anymore: Home buyers who’ve owned and occupied a home for at least five consecutive years during the past eight years are eligible for a credit up to $6,500.
• Increased income limits: Individuals making less than $125,000 and couples making less than $225,000 are eligible (The limits used to be $75K & $150K).

First-time buyers are eligible for a credit up to $8,000 on homes purchased between January 1, 2009 and June 30, 2010. Qualified homeowners can a credit up to $6,500 on homes purchased between November 7, 2009 and June 30, 2010.

Bonus Link

You can check out the full text of the bill. Scroll about halfway down to sections 11 & 12:

• Sec. 11. Extension and Modification of First-Time Homebuyer Tax Credit.
• Sec. 12. Provisions to Enhance the Administration of the First-Time Homebuyer Tax Credit.

Home-Buyer Activity Picks Up in the Bay Area

This is the first post by Brad Le, one of our Silicon Valley agents. Brad recently joined Redfin and is a lifelong resident of the Bay Area who’s been helping people buy and sell homes for six years.

During this time of the year, we generally see a decline in home sales with a dramatic dip as we get closer to the holidays. This year has been different as things actually picked up as the summer ended.

In the Bay Area, sales of existing homes in September rose 8.4% from September 2008. The Peninsula and South Bay led the way with the largest increases in homes sold from last year:

• 35% increase in San Mateo County
• 19% in Santa Clara County
• 19% in Alameda County

Reasons for the Increase in Home-Buyer Activity

There are a few reasons why the real estate market has remained strong well into the fall:

• Amazingly low interest rates. Most the buyers that I’m working with cite this as the #1 reason (followed by lower homes price) why they’re looking to buy now. Although we’ve seen a 2-week spike in mortgage rates, they are still near all time lows. You can find great info on mortgage rates at freddiemac.com.
• Lower home prices. While many of the lower end sales tend to be driven by short sales and REOs, we’re seeing a lot of well priced normal sales as well. Believe it or not, there are actually a lot of sellers that have lived in their home for 10, 20 or even 30+ years and are now cashing out their equity and buying in areas that they probably couldn’t have afforded a few years ago.
• The Fed’s $8,000 first-time home buyer tax credit. Although Congress has extended the credit, I think this is less of a driving force in the Bay Area where many home buyers do not qualify for the credit since income levels here tend to be higher than the limits imposed by the program.
• Strong local economy. Yes, I know companies are still laying people off, the country is in two wars and California has a major budget crisis. But, people are spending money in stores and on homes. Multiple offers are not just on bank owned homes, but we’re seeing that across the board for homes in San Jose, Mountain View, Palo Alto and all over the Bay Area. And have you seen Google’s and Apple’s recent earnings reports?

I expect things to slow down a bit as we approach the winter holidays, but based on the latest numbers, it will definitely be a busier holiday home-buying season this year compared to last year’s.

Tips for Home Buyers

If you’re in the market right now, here are some things to keep in mind:

• Get your lender lined up before writing an offer. I’ve had to request a lot of loan contingency extensions because the appraisers and lenders are so busy right now. By shopping for a lender before writing an offer instead, you’ll make the closing process smoother and more efficient. Ideally, your lender will have the purchase contract in their hands as soon as the offer is accepted.
• Review any disclosures upfront and have them signed with the offer. Sellers are looking for top dollar, but they also want a buyer who knows what they’re getting into by researching the home.
• Close in 30 days. In most situations, the norm for any offer is 14 days for the contingencies (property contingency can be 10) and a 30-day close. Try not to deviate from this too much unless it’s absolutely necessary.
• Write a cover letter with your offer. It personalizes the offer and can help seal the deal! I recommend this even if it’s not a multiple offer situation.

Do you have any tips for buyers?

The Market Wrap Up For September

Let’s take at look at some September numbers for single-family houses and condos that sold in the Bay Area and see how they compare to a year ago.

San Francisco County

• 535 homes sold in September
• The median sales price was $662,000, down from $700,000 in September 2008

San Mateo County

• 499 homes sold in September
• The median sales price was $570,000, down from $639,500 in September 2008

Santa Clara County

• 1,693 homes sold in September
• The median sales price was $450,000, down from $521,250 in September 2008

Alameda County

• 1,555 homes sold in  September
• The median sales price was $357,000, down from $385,000 in September 2008

Contra Costa County

• 1,525 homes sold in September
• The median sales price was $259,500, down from $300,000 in September 2008

Marin County

• 208 homes sold in September
• The median sales price was $635,500, down from $692,000 in September 2008

We got these numbers from DQNews.

Dig Deeper Into the Trends

These numbers are for county-level trends in the Bay Area. To see what’s happening in your neighborhood, check out our stats & trends pages.

Case-Shiller: Summer Surge Benefits High Tier Most

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). Starting this month, we will be basing all of the charts in this series of posts on the seasonally-adjusted data provided by S&P. For the full source data behind this post, plus non-seasonally adjusted and tiered price data, hit the S&P/Case-Shiller website. For an explanation of how the Case-Shiller data is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – August data is released in October).

Here are the basic Case-Shiller stats for the Bay Area* as of August:

Sixteen of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between July and August. Only Cleveland, Las Vegas, Charlotte, and Seattle marked seasonally-adjusted drops month-to-month.

Here’s a look at the Bay Area’s latest tiered data, back through 2000:

The Bay Area’s high tier has risen the most in this sudden summer surge (+6.3% in four months). In many other markets the low tier is seeing a more pronounced advantage, my theory as to why this is not the case in San Francisco is that prices across all tiers here had already fallen quite a bit further than they had in the markets outside California before this summer’s government intervention.

It is also interesting to note that the aggregrate index for the Bay Area has increased considerably more than any of the three tiers individually (9.4% in four months). This would seem to indicate a rather strong shift on the sales mix, with many more high tier homes being sold in recent months than low or middle tier homes.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves:

Here’s our peak decline chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.

Here’s the flip side of the peak decline chart—a graph of just this year, indexed to January = 100%:

According to a Reuters story from earlier today, Robert Shiller has described the sudden spike seen in many markets this summer as potential “bubble territory.” I agree. As I have discussed on these pages in recent months, the sudden and simultaneous nature of this price uptick does not bear any marks of a return to fundamentals, but instead seems to be driven almost entirely by a mad dash for cheap loans (interest rates in the 5s) and free money ($8k tax credit).

I’m a little bit concerned that by interrupting the natural correction of the housing market, recent government intervention is setting us up for even more pain down the road. I hope I am wrong.

*[Case-Shiller defines the San Francisco Bay Area as the San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area, which includes all of the following counties: Alameda, Contra Costa, Marin, San Francisco, and San Mateo.]

Redfin Partners with Agents in Napa Valley!

Great news for folks in the Napa Valley: Redfin just partnered with three local agents to help you buy or sell homes. In areas beyond the reach of Redfin agents in the Bay Area, Redfin partners with experienced, local agents whom we have carefully chosen to uphold our standards of outstanding customer service, transparency, and better value.

If you buy or sell a home with a Redfin partner, at closing he or she will provide you with a credit equal to 15% of the gross buyer’s-agent commission, usually worth $1,000 – $2,000.

Check out our coverage area below.

Napa Valley Service Region

Meet Our Napa Valley Agents

We put our partner agent applicants through the ringer to ensure that you’ll get great service:

• Interviewed in-person by a Redfin market manager
• Completed at least 15 transactions in your area and 5 in the last 12 months
• Gave us email addresses to survey the clients they represented in the last 18 months
• Agreed to survey every new client and publish every review
• Paid based on customer satisfaction; removed from the program for bad reviews

	Mike Bolen Serving Napa County and Vallejo Homes Closed: 600+
	Jeanine Gomes Serving Napa County Homes Closed: 150+
	Jonna Beck Lewis Serving Napa County Homes Closed: 23+

Apply to be a Redfin Partner

Are you a real estate agent with a commitment to customer service and transparency? We’d love to meet you. Become a Redfin partner.

Where Were the Biggest Discounts in August?

Let’s check in on our stats to find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from last month in the Bay Area and sorted it by city.

Methodology
In order to maintain consistency with the automatically generated statistics posted to the Redfin neighborhood pages, we have slightly tweaked the way the statistics are compiled for this post series. First, we complied a list of every sale that took place in the month, calculating each sale’s sale-to-list ratio (based on the final list price). Next, we simply take an average of every individual sale’s sale-to-list ratio to calculate an entire area’s sale-to-list ratio. Any sales that came in with a sale-to-list ratio above 150% or below 50% are excluded from the calculation, and areas with fewer than twenty sales are excluded from the top and bottom ten rankings. Interested readers may download the full data summary in Excel format (xls).

Here are the top ten areas with the largest overall discount:

The overall discount rate was obviously lower than our last update, but since we tweaked the methodology slightly, unfortunately they’re not really comparable.

Here are the ten areas with the smallest discounts:

In the 49 areas we ranked, the median discount was 0.2%.

Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and hit the “FullSummary” sheet.

Of the 4,199 sales we tracked in the 1-month period, 768 homes sold for 5% or more off the asking price, while 960 homes sold for 5% or more above the asking price.

Case-Shiller: Simultaneous Summer Surge Stretches On

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). For the full source data behind this post, plus seasonally adjusted and tiered price data, hit the S&P/Case-Shiller website. For an explanation of how the Case-Shiller data is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – July data is released in September).

Here are the basic Case-Shiller stats for the Bay Area* as of July:

Seventeen of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between June and July. Only Las Vegas, Seattle, and Detroit continued to mark seasonally-adjusted drops month-to-month.

San Francisco home prices as measured by the Case-Shiller index are definitely in the midst of a V-shaped recovery (at least in the short term), with the sharp gains since March erasing all the losses back to about December.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves:

Here’s our peak decline chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.

I suppose this summer could be called the summer of the sudden surge or the summer of the massive desperate government intervention. Either way, the result has been increasing prices in most markets over the past few months. Potentially good news if you’re trying to sell your house, but not especially encouraging if you’re hoping to buy, but prices had not yet come down quite into your reasonable range yet. Whether the $8,000 first-time homebuyer tax credit expires or not, I think this winter will be interesting.

Here’s the flip side of the peak decline chart, the Great Summer Bounce of Aught-Nine:

Wow, that’s quite the spike here in the Bay Area. Nearly 10% just since March! Maybe it’s just me, but that doesn’t smell like natural market forces at work…

Remember: All real estate is local. Except of course when the federal government throws billions of dollars into the market, I suppose. Then we get a nationwide sample of the best recovery that $700 billion plus $787 billion can buy!

*[Case-Shiller defines the San Francisco Bay Area as the San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area, which includes all of the following counties: Alameda, Contra Costa, Marin, San Francisco, and San Mateo.]

September City/Neighborhood Price Reductions

It’s been a while since we had a look at which cities and towns have the most price reductions.

The following charts show the percent of MLS, FSBO or REO listings that were price-reduced at some point before leaving the market (either sold or removed unsold from the market) in the past 90 days. Cities/towns or neighborhoods in which the number of homes taken off the market was too small to provide believable estimates are excluded from ranking.

For those that are interested, I have uploaded the full data set in Excel format here. The downloadable Excel file also includes charts showing the top ten cities/towns/neighborhoods with the least reduced-price listings.

First up are the top ten cities with the most price-reduced listings:

Of the 117 cities/towns we ranked in the Bay Area this month, 14 had price-reduced ratios of fifty percent or more. The median price-reduced ratio was 35.1%.

Getting a little more granular, let’s look at the top ten neighborhoods for price reductions:

Of the 73 neighborhoods we ranked this month, 9 had a price-reduced ratio of fifty percent or more. The median price-reduced ratio was 33.3%.

Download the full spreadsheet to check where your neighborhood came in.

The Market Wrap-Up For August

Let’s take at look at some August numbers for single-family houses and condos that sold in the Bay Area and see how they compare to a year ago.

San Francisco

• 514 homes sold, down from 529 in August 2008
• The median sales price was $635,000, down from $725,000 in August 2008

San Mateo County

• 606 homes sold, up from 560 in August 2008
• The median sales price was $559,000, down from $632,000 in August 2008

Santa Clara County

• 1,736 homes sold, up from 1,648 in August 2008
• The median sales price was $451,000, down from $555,500 in August 2008

Alameda County

• 1,538 homes sold, up from 1,271 in August 2008
• The median sales price was $340,000, down from $440,000 in August 2008

Contra Costa County

• 1,587 homes sold, down from 1,733 in August 2008
• The median sales price was $261,500, down from $330,000 in August 2008

Marin County

• 235 homes sold, down from 247 in August 2008
• The median sales price was $713,000, up from $675,000 in August 2008

We got these numbers from DQNews.

Dig Deeper Into the Trends

These numbers are for county-level trends in the Bay Area. To see what’s happening in your neighborhood, check out our stats & trends pages.

What trends did you see in August?