Inventory is not increasing at the rate it typically does in March. The number of pages in our MLS tour sheets is a good indicator, and they are decreasing in both the SF and Peninsula MLS’s this week. We’re hearing of new listings in the pipeline for many of our offices; however we appear to have plenty of Buyers already lined up for these new properties once they come online. In some respects, it’s a good problem to have. Having just returned from our International Business Conference and meeting with the CB presidents from all over the US, most metros would love to have this problem. My take is the market feels “healthy” in the majority of the metro areas, but none seem to be experiencing the sizzling Buyer demand we have in the Bay Area for well-priced, good condition homes. The typical drivers for a healthy market are in place: low interest rates, low unemployment, consumer confidence index is steady – in spite of a recent world-wide stock market drop. Add to that the limited housing we have in the Bay Area, and we should continue to see robust activity at least through the 2nd quarter, provided we have listings to sell.

Multiple offer situations dominate the conversation in most of our offices. Along with the obvious benefits of multiple-Buyer demand, comes the responsibility of educating the Seller on the best method to deal with this level of activity. It’s also important to over-communicate with the agents of Buyers who have an interest in our listings. Pre-emptive offers are more common now, and as the Seller must be the one who decides how to deal with these opportunities, it remains our responsibility to communicate the game plan with all the possible players.

In the $1-2 million range (where inventory still seems to be the tightest) homes are getting anywhere from two to 12 offers. Berkeley indicates that 75% of their sales were in multiple offer situations, and in San Francisco’s Westwood Park, a “contractor’s special” received 33 offers – 22 of which were all cash. In Palo Alto, practically anything on the market for less than $2 million is receiving multiple offers. Listing inventory overall decreased for 6 offices, remained steady for 11 and increased in 10. Sales activity continues its upswing with 15 offices reporting an increase, 10 seeing steady activity, and only 2 reporting a decline.

We get an extra hour of daylight now - let’s hope homeowners put it to good use in whipping their homes into shape for a quick Springtime sale. Let’s also make sure we’re taking full advantage of our Princeton partners, getting our Buyers pre-approved and underwritten in advance, for a super-clean offer.

Pre-emptive offers are increasingly a factor in squashing inventory to low levels in most areas. Homes that are priced right, staged, and located in desirable neighborhoods continue to get multiple offers. This translates into a lot of disappointed buyers out there waiting for the ideal home to come on the market. One Corte Madera home listed at $880,000 received 9 offers, while a home with a second unit in San Francisco’s Ingleside District received 13 offers. Burlingame presented 16 offers to a seller in the $1.4M range this week. Palo Alto reports that 97% of all this week’s sales were in multiple offer situations. Half Moon Bay's market had been very slow after the Devil's Slide highway closure and the general slow-down experienced throughout NorCal last year, but now reports from our HMB associates are very positive as they are enjoying brisk activity.

Inventory is starting to trickle back, but supplies remain sparse throughout most our communities. Buzz is that this month will bring more properties for sale, and as long as interest rates remain low, sales should be brisk. Be prepared for a very busy March.

It’s important to note that Coldwell Banker continues to dominate the luxury home market. We have over 28% of the $2M+ market (listings sold - last 12 months) in the Peninsula. In San Francisco, we dominate with 35% market share over $2M. The competition doesn’t even come close. A $4,895,000 Menlo Park home sold at the first open before the Broker tour, and Palo Alto reports significant movement in homes listed at $3.5 million and up. More than seven offices have commented on strong sales among upper-end homes this week.

Of the more than 450 open houses held open, all continued with surprisingly high attendance. A west side Burlingame home had 350 groups through. Inventory is reportedly steady in 16 offices, decreasing for 5 offices and increasing for 8. Sales activity remains on par with inventory levels with 14 offices reporting steady activity, decreasing reported by 7, and increasing for 8. Ratified offers increased again reaching more than 235 for the week. Another good sign that spring is just around the corner, and that sellers need to start getting their homes ready for a quick sale!

The fact that there are limited choices out there may have played into the rise of ratified offers, over 240 for the week. Inventory shortages seem to be the primary factor in agents’ strategy, whether working with Buyers or Sellers. Springtime is known for Open Houses industry-wide, but our ability to meet new Buyers is hampered by the amount of homes available to be held open.

There are remarkable reports of “micro-climate market” activity in several areas and it will be interesting to watch how they evolve as spring nears. The Greenbrae office noted inventory continues to be a controlling factor, but that some neighborhoods are red-hot while others are tepid at best. A somewhat original condition Eichler home in San Rafael seemed poised for many offers, one of the lowest list prices available in the area – however just a few offers came in, and not as far over the asking as what one might have expected.

In other areas, multiple offers are once again the rule. The Burlingame office reports 18 offers on a property in San Mateo and 8 offers on a San Carlos home. The Palo Alto office is seeing 82% of its listings in multiple offer situations. In San Francisco’s Sunset district, a fixer-upper had 9 offers and went for well over the asking price. Lest Sellers get too carried away – it’s worth noting that a 3/2 in San Francisco priced at $1,275,000 received 11 offers, and a very similar listing just blocks away at nearly the same list price received one.

Some offices report a fair amount of stale inventory – Buyers are not “panic buying” – not buying just to buy. Buyers and their Agents alike are looking for value. It’s important to note that some sales are coming together on homes pulled off the market a few months ago. This is a product of networking at our sales meetings - very critical, and a great value we bring to our Buyers and our Sellers.

It’s very interesting to review the past several weeks’ market reports and notice the geographical migration of low inventory concerns throughout the Bay Area. Several weeks ago the communities further east and north were largely commenting on lack of sales activity - listed properties not moving. The same week, San Francisco and the Peninsula were starting to comment on the lack of new properties coming to the marketplace. Notice this week that sales activity is picking up in the north and east bays, while San Francisco and Peninsula offices are genuinely concerned about the shortage of inventory.

In Pleasanton, our office reports that 67 new homes came on the market during the week, and 63 homes went pending. Inventory in the Danville market has dropped below a three month supply. Coastal inventory in Half Moon Bay is down dramatically. Palo Alto reports that 65% of all of their offers are multiple offers. Menlo Park cries “We’re starving for houses to sell.” Burlingame reports multiple pre-emptive offers at a $3M price-point listing. That being said, there are some properties in both San Francisco and the Peninsula in the $2.5M+ range which aren’t flying off the shelves, indicating that a sensitive list price is still key.

Of the more than 485 open houses held by our offices, all were well attended. In San Francisco an approx. 950 sq ft home w/o dining room in Bernal Heights had more than 300 visitors. By mid-week, it sold for more than 20% over its $699,000 LP with 13 offers. Another San Francisco home in the Westwood Highlands district had 43 disclosure packets out and 21 offers submitted after only 4 days of showings.

Listing inventory overall was reported as being steady by 16 offices, increasing by 6 and decreasing by 10. Sales activity reportedly increased in 7 offices, decreased in 4, and was steady for 18 offices. Of the offices reporting, there were more than 200 ratified offers.

There is a lot of buzz indicating that sellers are waiting for late spring before putting their homes on the market. Hopefully, those sellers aren’t looking at the media headlines and thinking they’re indicative of a bad time to list. The buyers are out there…waiting for something to buy!

Last weekend’s Super Bowl seemed to have little or no impact on the more than 350 Open Homes our agents provided throughout the San Francisco Bay region. Reports of 148 attendees on a North Bay listing, and over 300 for the weekend at a Menlo Park Open House were not met with surprise. In densely populated areas such as San Francisco’s Noe Valley, it was back to the old days of cars double parked up and down the narrow streets as Buyers scrambled to see the few new listings introduced to the market this past week.

It’s perfectly clear that what’s “not right” with this current market is not enough inventory. We are hearing the same lament in all our offices – from Palo Alto in the South to the Marina District of San Francisco in the North. It appears our offices in North Bay and East Bay share the same concerns. Of the offices that reported declining sales this week, it seems they are the same offices reporting decreasing inventory. You can’t sell it if you don’t have it.

Multiple offers are ruling the day again. Consider our Woodside office, perhaps harder hit in the “adjusting” market of 2006 due to the price point of their inventory. This week they reported 8 sales, of which 50% were in multiple offers. Six months ago it seemed Woodside was very far away from multiple offers being the norm again anytime soon. Burlingame reported multiple offers this week from the $700K price point to a recent listing they introduced at $3M. San Francisco agents are back to asking what the “offer date” is of a new listing, where it’s plain to see that nearly 50% of all sales are going into multiple offers in the City. It’s too soon to see if this is a “blip” or a trend – but in the meanwhile, the best Valentine’s present any Bay Area homebuyer could receive would be for more Sellers to get their homes on the market.

Momentum continues to gather as inventory gets sold as fast as it comes on the market in most areas. Even some wall flower listings lingering from last year are being courted by genuinely interested buyers. Most offices report that they are seeing more buyer-controlled transactions, and that sales associates are working with significantly more buyers as well.

Listing inventory remains mostly steady, so these shoppers eagerly await new listings and a wider selection to appear on the market. 15 offices reported steady listing inventory while 9 reported increasing levels and 4 indicated that inventory was decreasing.

Over 450 houses were held open last weekend to large crowds with some first showing garnering 150 to 200 visitors, and more than 50 properties received multiple offers through all price points. One home received 44 offers - but the highest offer was $25k under the list price. Those large numbers of buyers out there are serious, but they’re still looking for bargains. Fortunately, sellers are increasingly willing to negotiate as 16 offices reported steady sales activity and 11 testified to increasing sales activity. One office reported sales activity as declining.

Even our usually nay-saying media is starting to take notice of a market that is showing signs of health with headlines containing words like “stabilization,” “increasing,” and “eases up.”

Keep motoring.

Freezing temperatures and a three-day weekend didn’t keep savvy buyers away from our 436 open houses held last week. In fact, 16 of our offices report increased open house activity with comments ranging from “open house attendance is growing,” to “the best weekend in months,” and even “attendance continues to rock at open houses…record crowds.” If these are all buyers who buy, then “cautiously optimistic” is the buzz-phrase of the week.

According to DataQuick studies released this week, average sold prices for December ’06 were up by 3.5% over the previous year. This, in combination with tightened inventory levels in most areas, means that now really is the time to buy before prices increase further. The savvy buyers are recognizing this and are out there looking.

We normally see a flock of new listings this time of year as many sellers have held their properties off the market during the holidays. As of the first three weeks of 2007, however, we are not seeing the increase in inventories. This may play well for sellers as fewer properties available means prices should hold up well. Still, listing inventory remains fairly healthy with 11 offices reporting increasing levels, 10 reporting steady levels and 7 reported as decreasing.

Many potential buyers may still be waiting for lower prices (and warmer weather) but sales activity is increasing in 6 offices and steady in 17 offices while reported as decreasing in only 5 offices. Multiple offers are seeing a jump as well with at least 20 being reported - one of them a serious fixer that received 6 offers.

Things are moving. Go catch them.