Wednesday, May 7, 2008

Which California did you mean?!

by Arlene Baxter

Yesterday Zillow reported that 130 out of the160 metropolitan areas they have been surveying now have median home prices below last year's. Of the 10 metropolitan areas with the biggest declines, five were in California.
As I read this newly released information I was once again reminded how crucial it is to be precise in defining what area you refer to when speaking about value trends. We start with: "California one of three states with largest losses in property values." Then we go to the supposedly local information: "San Francisco values down 13.5% from last year". But read on: San Francisco, Oakland and Fremont define an area! Even forgetting that you're commingling counties, San Francisco merged with Fremont?! I fail to comprehend the value to anyone of such merged data.
We all know California is not one housing market, but many completely different markets, representing all manner of market behaviours. San Francisco alone is not one housing market, but many diverse and conflicting markets. Some neighborhoods are very active, some in desperate straits. I primarily represent the markets of Berkeley, Albany, Oakland and Alameda, in Alameda County, plus El Cerrito and Kensington in Contra Costa County. Just within my own geographic areas there are numerous micro-markets. Last week in a desirable Berkeley neighborhood with little on the market, a house was listed in the low $900K range. The house was charming, but needed updating to most major systems. It received 10 offers, with the successful offer being more than $350K over list! That was noteworthy, but not unique in this market area. In Berkeley and Rockridge in Oakland multiple offers are common (just not having ten of them!) We are seeing fewer and fewer contingencies in offers. We see pre-offer inspections by buyers, and once again we have pre-emptive offers. Right here, right now, there certainly are more qualified buyers than desirable listings.
Meanwhile, buyers continue to read that it's their market, and are shocked, and sometimes resentful, when I need to educate them to the true and fast nature of most of our local micro-markets. But the local news is the only news that really matters!

So I continue to blame it on the wisteria! See my April 20th post below, including an all-wisteria, all-the-time slide show! While most is now past its prime, today's view of the entrance to Gourmet Mecca (otherwise known as Chez Panisse!) was even more enticing draped in wonderful white, fragrant blossoms.
The depressed, bottomed-out market of the Zillow news is truly not the world of Gourmet Ghetto. I splurged on Ciao Bella sorbet while I photographed scenes of the Epicurious Garden. Lychee and Passion Fruit put me in a mood to appreciate the sensual pleasures of our little stretch of paradise all the more. And then when I walked into the small branch Post Office and was served immediately, I knew for sure that I was in heaven!

2 comments:

David Gibbons said...

Hi Arlene, it's David G from Zillow.com,

Great post; you have me craving for lychee's and passion fruit.

The challenge with communicating these quarterly reports is certainly the sheer mass of data that we publish and the fact that everyone is interested in a different slice of it. We do actually report home value trends down to the city, ZIP code and neighborhood level. Year-over-year appreciation in your markets (by city) was as follows:

Berkley -4.5%
Albany -8.6%
Oakland -17.8%
Alameda -13.4%
El Cerrito -9.6%
Kensington -7.8%

To see all data for San Francisco down to the neighborhood level, click here: http://tinyurl.com/5wjk3p

Berkhills Blogger said...

Thank you David for your by city breakdown. Here’s the real problem with year-over-year statistics:

1. Because of low inventory, many statistics rely on a small handful of closed transactions.
2. Many of the sales forced by the mortgage melt-down are in lower price ranges where sub-prime financing played a key role in the purchase.
3. Conversely, many of the sellers with significant equity in desirable neighborhoods are choosing to stay put. The resulting inventory has shifted towards lower priced houses which in turn affects the statistics.

Generalities are derived from moving targets and very limited statistical information. The transactions we see daily do not behave according to the stats. As Arlene so eloquently pointed out, we see the specifics change dramatically neighborhood by neighborhood and street by street. If you want to know what your home is worth in all of this, have your real estate agent prepare a Comparative Market Analysis, which will pull the most current sold prices for homes nearest to your property. Compare apples only to other apples. Random percentages don’t cut it anymore; you need to see for yourself where the statistics are coming from.