Thin Air

Maybe the most effected price range right now in the Mid Peninsula is the range beginning at $1.3mil and going up. When I say the Mid Peninsula I mean Foster City, San Mateo, San Carlos, Belmont, Redwood Shores and Redwood City. In those areas right now there are 115 single family homes actively for sale upwards of $1.3mil. There are only 15 pending sales in that range in those communities…or13%. In the same communities there are 419 single family homes actively for sale under $1.3mil, and 183 pending sales…or 44%. That’s quite a distinct gap! Now if you’re only looking at Hillsborough, Atherton and Burlingame (obviously pricier areas) there are 112 single family homes for sale with 21 pending sales…or 19%. It’s become real obvious to me exactly how slow the upper range is in our communities because I have a house listed in San Carlos for $1,699,000 and holding Open Houses there has become a nice, quiet place to watch the 49ers without being disturbed. It’s real, real slow.

In Foster City right now there are 10 active listings over $1.3 and 2 others that are just slightly under it. That’s out of 33 active listings. As the picture above suggests…the air is getting kind of thin up at that altitude. If we manage to see a reduction of 30 year fixed rate jumbos in the coming months I suspect we’ll experience a bit of a thaw in this range…but we’ll see. Most likely it’s simply an issue of confidence and spending “large” is certainly a scary thing to do right now. I also realize that “large” is certainly a relative thing too…and the blanket of fear hasn’t gone away either.

What’s the good news? The fact that there are 219 total pending sales on single family alone is one of those, can’t be understated, good signs for the future kinds of facts. There are buyers out there…and I’ll bet most of them are getting good deals right now.

Comments

  1. Jim,

    Just goes to show the credit abuses of last few years that I mentioned a bit in my last post. I am quite sure there are many such houses in Foster city and other relatively well to do markets. Where do you think all the cash for Luxary cars that you see on the streets came from?

    Silicon valley companies have started to layoff people: HP, Yahoo, start ups backed up VC funding etc. Lot of money in silicon valley is tied to stock market and guess what its on a downward trajectory.

    I can easily see house prices falling by 20% or so in foster city from current listed prices over the next one or two years depending upon how deep of a recession we get into. The question is not whether we have a recession or not, but how bad it is. Some say we are already in recession and some say that its going to be worse than both 1991 and 2001 recession.

    Don’t know about you, but I am certainly tightening my belt. The waiters at the local restaurant that I frequently visit tell me that they are seeing slight drop in customer visits recently. Good luck to those who are buying houses right now – certainly brave souls.

  2. Jim Minkey says:

    Jeez Liko, for a minute I thought you were going to break into a rendition of The Internationale http://en.wikipedia.org/wiki/The_Internationale

    Maybe re advocate for the “dictatorship of the proletariate” I, for one, own one of those “luxury” cars you mentioned and I paid half down and financed the rest…it didn’t come out of my home equity. I’ll bet I’m not alone there either.

    I don’t think anybody is argueing about whether or not there’s a recession…my point is simply that it’s in times like these that fortunes are made. Look at Warren Buffett. Buyer’s who step up right now will be rewarded because they’ll be able to negotiate downward. Most people will wait until everyone else comes back before they’ll jump back in because they think there’s safety in numbers…while the truly smart people will have gotten in now.

    P.S. Sorry to hear that times are a little rough right now Liko…maybe you could win the foto contest? I’d be happy to help you out with a gift card!

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