2011 NorthCountySecond Quarter Real Estate Review
A Real Estate Market cannot have a recovery without a period of stability. The term recovery presupposes a return to the values of 2005. That return is not going to happen any time soon. But the current goal for those of us who depend on the health of this business is that market prices stabilize. And buyers need to feel that the worst is over in regard to price deterioration. Many NorthCountybuyers have been slowly inching back into the market. Activity is painfully uneven but there IS activity.
There were 470 single family homes sold in the first half of 2011 compared to 374 homes in the first half of 2010. An increase of 96 units is a strong 25% year to year increase. Almost half of the home sales were distressed properties. The average sale price dropped 4% on a year to year basis to $267,000. That market has continued to perform well into 2011 as investors and first time buyers take advantage of this market. There were also 139 homes in escrow at the end of June this year.
High end Westside properties had a solid surge in closed sales this past quarter. The premier areas are always the first areas to experience renewed buyer interest. Many of these big Westside buyers are voting with their pocketbooks. As our market begins to stabilize, it looks attractive compared to other shaky financial investments. Our wine industry continues to draw buyer interest to the area. High end properties on the Eastside have yet to gain any traction.
Gallo purchased Edna Valley Vineyards which continues a trend in buyer demand for quality brands. As our area grows in quality, more major dollar deals will follow. Grape pricing will be interesting this year. We are expecting a diminished crop from the unusual timing of frost earlier in the year.
Homes on acreage sales increased from 147 units in 2010 to 169 units in 2011. Saleprices were stable at $489,000. Pending sales were also solid at 43 units as of the end of June. There continues to be a healthy interest in these properties.
A great deal of angst surrounding real estate has been promulgated by the media. Real estate is a local business but most media is national. They tend to focus on the most deteriorated markets and do not supply viewers with positive news. We live in an area this is desired by the urban refugee. The Bay Area and the LA/Orange County real estate markets have continued to feed into the NorthCounty. The health of these markets is a good indicator of the status of our markets future stability. A headline in USA Today on June 24 states “Silicon Valley Housing Market Is Heating Up Fast”. The tech industry is churning out money and those folks want to buy real estate. The median price of a single family home in Palo Altorose 20% in the past year. Moving into 2012 we expect the upside of that market to contribute toward a stabilizing of prices here.
One fact helping home sales is the improvement in short sales. Slowly, many lenders are making short sales happen in a much more expeditious manner. This short sale activity is helpful in cleaning up our market. All the wasteful government “assistance” programs pale in comparison to a simple easing of the short sale deal.
Much like the late seventies we are laboring under an economic malaise with seemingly no end in sight. Americacan dominate if we just get out of our own way. As stability gets some legs, we will have a change in perception. That change will lead the way to a stable market both here locally and across this great nation!
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