In a L.A. times article it was noted that Consumer Confidence dipped in the month of September
The article titled “Consumer Confidence Unexpectantly Falls in September” quoted a recent consumer confidence index which measured a drop from 54.5 in August to 53.1 in September. The drop is contrary to most economists predictions of a modest increase in confidence and an overall stabilzing of the economy. A primary reason for the decline is noted as being a lack of confidence in the job market. What we are seeing as Realtors to some extent supports the article but the interesting thing is that in spite of a concern over jobs we are seeing a robustness in homes sales and at the lower price points we are seeing multiple offers over asking price. In fact the same article quotes a recent “Case-Schiller Home price Index report” that shows prices on the rise over this year. The same report noted that prices are still 13% below July of last year but they seem to have stabilized.
Analysis
Based on what we are seeing in terms of homes sales in the Bay Area my thoughts are that there is pent up demand for homes especially at the lower price points, and unless we have a large inventory of homes suddenly become available, I feel that prices have stabilized and in fact are starting on their way up. In general the mid-priced homes are not selling as fast but in areas likeSan Ramon we are seeing homes priced up to $800,000 sell with multiple offers. So, my conclusion is that the age old definition of real estate “Location,Location,Location” still holds true and in desireable areas, in spite of a slight drop in consumer confidence, homes will continue to sell.
The Town of Danville with it’s population of roughly 40,000 people is a suburb of Oakland and San Francisco and is a short 35 minute drive from the city of San Francisco.
Danville is one of the wealthiest suburbs in the San Francisco Bay Area, with some of the most expensive and exclusive country clubs and Real Estate in the country. It still keeps its small town charm by limiting growth and maintaining strict building code guidelines. While only a couple of small blocks in area, the rustic downtown is a destination point for the entire East Bay and is highlighted by historic homes, fine dining and boutique shops. The downtown area is home to several events and street fairs throughout the year. Danville’s main street is Hartz Avenue in downtown Danville.
The Downtown area hosts a farmers market every Saturday where local growers and merchants sell fresh produce and meats. Every Wednesday evening a local running shop hosts a 5 and 10 K run along the Iron Horse Trail which goes through downtown Danville and extends from the City of Dublin to the city of Concord.
Danville is within the award winning San Ramon Valley School District and hosts two High Schools serving the east and west sides of the town.
History
Danville’s name came from the town founders of Daniel and Andrew Inman, who bought 400 acres (1.6 km²) there in 1854 using their gold rush earnings. They rejected the name “Inmanville” and settled on Danville. However, “According to the modest Dan, the name was chosen as much or more out of respect for Andrew’s mother-in-law, who was born and raised near Danville, Ky. It was initially a farming community, switching from wheat to fruits and nuts after the Southern Pacific Railroad built a spur line through the area in 1891. It developed as a residential suburb starting in 1947 when the first sizable housing tracts were constructed and its population boomed in the 1970s and 1980s.
The inventory absorption rate for single family detached homes in Alamo has increased from 2 weeks ago.
The absorption rate for Alamo Homes as of September 14 was at 4.5 months. The rate is now at 5 months. This may just be an anomoly because a swing of 1-2 active or pending homes can make a difference. I would still consider the market stabile but slower than those of the surrounding communities of Danville and San Ramon. The difference seems to be due to the price per square foot of the Alamo homes. Most buyers are looking for value and the Price per Square foot metric used. The price per square foot for the active listings is higher in Alamo than in Danville or San Ramon so perspective buyers are deciding on bigger homes for less money as opposed to location. Also, The homes in the newer areas of San Ramon and Danville are in the San Ramon Valley school district along with the Alamo homes, so the Alamo homes do not offer a quality of education benefit over the other communities.
Current Alamo Statistics:
There are 121 active listings in Alamo for single family detached homes. The average list price for these listings is at $2,086,530 with a high of $38,000,000 and a low of $599,000. The average price per square foot is at $446 and the average days on market is 128. There are 25 pending listings that have an average list price of $1,436,027 with a high of $3,375,000 and a low of $694,000. The average days on market is 112 days.
The Danville market has stabilized with available inventory hovering at about 2 months, but this is not the whole story.
Over the past year we have seen the statistical strength of the Danville Market relative to local and national markets. However, the Danville market has segmented and homes at the price points less than $1,000,000 account for over 80% of the total sales. So, statistically speaking the overall market looks quite strong and robust. What we are seeing though is that the homes priced between $1,000,000 and $1,200,000 are sitting for long periods of time. The homes over $1,300,000 seem to be selling faster than those in this middle segment. In speaking with perspective home buyers what we are finding is that people are really looking for value and in many cases the homes priced between $1M and $1.2 M are listed at a fairly high price per square foot. Many of them are older homes that need remodeling or updating and buyers would rather pay more for a home that is already remodeled and priced well, or one that is not remodeled and priced low.
Current Danville Statistics:
There are 162 active listings for single family detached homes in Danville. The average list price for these homes is $1,302,245 with a high of $4,500,000 and a low of $529,000. The average price per square foot for these homes is $421 and the average days on market is 107 days. There are 83 pending sales in Danville with an average list price of $920,263. The highest priced pending sale was listed at $1,550,000 and the lowest at $484,900. The average price per square foot for these pending sales is $354 and the average days on market of 69 days.
The market for resale detached single family homes in San Ramon continues to be hot.
With an inventory absorption rate of a very low two weeks we are seeing many homes sell within a week with multiple offers that are over asking price. In speaking first hand with buyers the consensus is that the prices are either at or near bottom. In fact prices seem to be inching up at the lower price points. Additionally the First Time Home Buyer Tax credit is providing a very good incentive for first time home buyers along with very low fixed rate interest loans. There is some talk that interest rates will be starting on their way up soon and that at this same point next year we may see rates approaching 7-8%. Congress has yet to decide whether or not to extend the First Time Home Buyer Tax Credit through next year so as of now it expires on Novermber 30 of this year.
Current San Ramon statistics:
There are currently 89 active listings for detached single family homes in San Ramon. The average list price for these homes is $943,214 with a high of $4,990,000 and a low of $365,000. The average price per square foot is $399 and the average days on market is 71. There are 174 pending sales in San Ramon with an average list price of $767,203 and a high of $1,700,000 and a low of $370,000. The average price per square foot for these pending sales is $290 and the average days on market is 49.
In this video I discuss some of the current issues why listings don’t sell. The market has changed and in most cases homes should sell. I discuss reasons that they don’t and what can be done so that they do.
The Danville Real Estate market is still very stable but homes are moving quicker at the lower price points.
The inventory absorption rate for resale residential real estate in Danville is currently at 1.87 months. This continues to show a downward trend along with the neighboring communities of Alamo and San Ramon. The biggest piece of news though is not so much the downward trend in available inventory but the segmentation of the market into 3 distinct groups. As I explained in my video regarding Danville home sales, over the last 2 and 1/2 months there have been 103 homes sold in Danville. A full 80% of these sold homes were sold for under $1,000,000. The interesting statistic is with the mid point and high end. Homes ranging in price between $1,000,000 and $1,200,000 only had 8 sales during the same period while homes priced over $1,200,000 had 15 sales.
The current Danville statistics are:
There are 159 Active listings for single family detached homes in Danville. The average list price for these homes is $1,289,470 with a high of $2,995,000 and a low of $529,000. The average price per square foot is at$420 and the average days on market at 111. There are 85 pending sales in Danville with an average list price of $940,239 and a high of $2,750,000 and a low of $399,950. The average days on market is 67 days and the average price per square foot is $361.
The market for resale homes in Alamo continues to be consistent albeit a little slower than the surrounding communities.
There are 117 active listings for detached single family homes in Alamo in addition to 26 Pending sales. This gives us an inventory absorption rate of approximately 4.5 months. The Alamo market is somewhat similiar to that of Danville in that the homes at the low end are selling while mid point homes sit. Interestingly enough, we are seeing the homes at the highest price points sell quicker than those priced between $1,000,000 and $1,200,000. Comparatively speaking, we see the market in San Ramon as being a somewhat overheated at the lower price point and in fact has an overall inventory absorption rate of 3 weeks. The reasons are many and varied but in general the buying public , now more than ever, is looking for value on a price per square footage basis. The homes in Alamo and Danville are more expensive than those in San Ramon. In fact it is not uncommon to find nearly new 4000 sq. ft. home for under $1,000,000 in San Ramon where the same home in Alamo could be as much as $2,000,000.
Current Alamo Statistics:
The average list price for the 117 active single family detached homes in Alamo is $2,074,959 with the highest priced listing priced at $38,000,000 and the lowest at $655,000. The average price per square foot is at $499 and the average days on market at 130 days. The average list price for the 26 pending sales is $1,558,163 with the highest priced pending at $2,345,000 and the lowest priced at $694,900. The average price per square foot is at $394 and the average days on market at 102 days.
The real estate market in San Ramon has become very stabile with homes selling at a brisk pace.
As of this post there are 104 active listings for single family detached homes in San Ramon. In addition there are 153 pending sales. This gives us an inventory absorption rate of approximately 3 weeks. This is up a little from last week where the absorption rate was at 2 weeks but is indicative of a sellers market. The irony is that this pace of sales indicates a sellers market, the majority of homes being sold are either short sales or foreclosures. This is a bit different then the Danville and Alamo markets where a smaller percentatge of the listings are bank owned or short sales.
The average list price for homes in San Ramon is currently at $932,699 with a high of $1,495,000 and a low of $375,000. The average price per square foot is $382 and the average days on market is 69 days. The average list price for pending sales of single family detached homes in San Ramon is $750,197 and a high of $1,299,000 and a low of $370,000. The average price per square foot is $288 and the average days on market is 47.
The effect of short sales on statistics
One drawback to the traditional approach to calculating inventory absorption rate is that it assumes a 30 day escrow period. In fact what we are finding is that due to the number of short sales, the average escrow periods are closer to 60 days.
The Town of Danville with it’s population of roughly 40,000 people is a suburb of 
