Archive for March, 2008
The Goldman Report: March 30, 2008
The wacky world of real estate continues this week with a third of our sales during the reporting period being involved in multiple offers. Some areas around the Bay have picked up a little steam—meaning Marin and parts of Oakland/Berkeley. Others have maintained—Sonoma and Napa—and some have backed off a bit—San Francisco and Contra Costa. It really doesn’t matter as one week’s activity doesn’t give much perspective. The elements that standout are that open homes continue to experience good traffic and in spite of all the economic turmoil we are seeing buyers taking the leap of faith.
There is little positive news on the global front as pontificators argue back and forth as to whether the action taken by the government will have the desired effect in stimulating the economy. Let’s just flip a coin—probably our chances are just as good as theirs.
You have to dig deep to come up with glimmers of light. Don’t know if this recent story on Thornburg mortgage, a premier lender in jumbo loans, is a glimmer, but it may indicate that those with the dough are beginning to realize that there may be some opportunities in the lending business. Thornburg, which has been on the ropes for months, not because of bad loans, but because they can’t find funds to make loans, needs to find cash to stay afloat. Last week Thornburg found a hedge fund investor that was willing to put up $450 million. They are now seeking an additional $550 million for a total of $1 billion to make their commitments. Although the terms are extremely good for the investors (18% interest and a chunk of the company—not a bad deal), it shows me that the pure capitalists—those that are all about the money and not do-gooders (those that are politically motivated) feel that being tied to the mortgage business can be profitable irregardless of the economic woes weighing on the economy in general.
As we head toward April, final March numbers should give us a good sense of the direction of the market. At this point, my impression is we will see an improvement over February—not hefty, but still moving in a positive way. We have seen the entry level buyer coming back into the market over the last month and the luxury buyers are still pursuing the trophy homes as evidenced by a $9.7 mil. sale in Kentfield.
The significant story this week is the sale of a $1.595 mil. home in Tiburon. The reason this sale is important is that it shows how by preparing a home for market and staging it properly can make all the difference in the world. The home was listed last year for $2.625 mil. After 3 months the seller took it off the market. In between now and then the seller spent over $75,000 on improvements and had the home properly staged. The result was a multiple offer and a sale at the higher list price.
This sale shows the importance of having a home showing at its best. In our current market it is critical and can mean extra dollars to the seller.
Also of note was a listing in Moraga priced at $995K. It sold in 5 days. There were many inquires by agents who had buyers that had an interest in writing on the property. It was too late for these buyers. What this demonstrates is that a buyer cannot always depend on properties lingering on the market. Buyers desirous of properties in markets that have a dearth of inventory need to move quickly (Moraga has only 16 single family homes listed and 12 are pending).
Now for the group that came up with the half a billion dollars for Thornburg mortgage here is a little song for them (they know how to cut a good deal):
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