I couldn’t resist the sensationalized headline to this post, especially since traditional media sources have been relying upon these types of headlines to broadcast how anemic the “national” real estate market has been. If you are a regular reader of this blog, you KNOW there is no such thing as a “national” real estate market. Until such time as someone can convince me that a Lamorinda real estate buyer is concurrently considering buying in some place like Oshkosh, WI, I’m holding firm to my belief. No offense to Oshkosh, I’m sure it’s a lovely place, just not for me!
In recent days, we’ve heard that housing starts are almost non-existent and even that the “Bay Area market” took a dip in July with a decrease in sales over a more robust June. Although it’s certainly not on fire, the Lamorinda market performed much better than most. The leading edge of our market is always represented by our “pending” sales… those that actually entered escrow in a given month. Looking at the transition from June to July of this year, we saw a 29% jump in pending sales in July. That also represents a 24% improvement from July of 2010. An amazing 63% of those July 2011 pending homes were priced under $1M, so it’s pretty clear where the action is! Just think back to about 2005 when you could not find a habitable home in Lamorinda for under $1M. Even moving up-market a bit, July was a pretty good month. Seven homes in the $1.5M – $2M segment went pending, representing one-third of the total available inventory. Finally, we reach for the life support systems in the $2M+ market where only 2 homes went pending against an inventory of 21 homes — both were in Lafayette.
Most certainly, we have interesting times ahead. The Fed has committed to low interest rates, and has shot what might be their last economic bullet to infuse life into the economy. With essentially zero to negative returns for cash positions, the Fed is trying to stimulate investment in the economy… either in equities or real estate. Jobs drive housing, so we should keep a keen eye on those numbers moving forward. The good news is that Lamorinda real estate continues to distinguish itself from other markets.