Below is a market-by-market report from our local offices:
 
North Bay — The Southern Marin office reports that they’ve seen a flurry of activity in listings, sales and closed escrows. The Previews market is picking up as well. Two Previews sales closed this week and three are in contract. After a brief slowdown around Memorial Day, activity in the Greenbrae area has picked up again and is clipping along at a nice pace. We are seeing multiple offers again in the $1M price point and below and, in some cases, in the $1M - $1.5M price range. Greenbrae, Corte Madera, San Anselmo, Larkspur and Fairfax continue to be hot markets. Our Northern Marin office reports that it’s seeing an upswing in activity in the $600 - $800k price range in Novato with a high percentage of homes in contract at this point.  Under 600K continues to thrive with over 52% of homes on the market under contract. In Petaluma, sales are steady. It was a soft weekend for real estate because of graduations.  But buyers are out in force again. It’s very competitive in the under 400k range, but soft in the 750k - 1.5 million range. Our Santa Rosa office reports that the past two weeks have seen activity across the board dropping by about 50% – sales, open house activity and showings. We have also seen an increase in cancelled escrows.  The low end and previously more expensive properties in Sebastopol that are now 50% off their peak are attracting huge crowds at open houses. Over 30 groups at an REO listed at $649k, previously $1.2m another 30 groups at an REO listed at $230k. The market remains exceedingly price sensitive.
 
San Francisco — Sales are growing slightly in the Lombard market, although May proved to be slower than April.  Open houses are still well-attended. According to our Market Street office, attendance was all over the map last weekend at open houses from zero to over 100 groups. The open house with over 100 groups was a condo in the Potrero Hill district and ratified after the first weekend. Some of the listings that are not ratifying quickly are going into contract after a price reduction. In a few instances clients that have been in backup for a while have been elevated due to problems with the original buyers obtaining a mortgage. In the Noriega area, meanwhile, both sales and inventory are decreasing. The month of May was extremely slow even though open houses were well attended. Buyers are once again taking their time since the federal tax credit is over. Agents are saying that buyers are waiting to see if the prices will drop since the tax credit is no longer driving the market.
 
SF Peninsula — The usual slowdown around Memorial Day and the endless graduation events always seem to slow down the market this time of year, the Burlingame office reported. There are a lot more listings coming on the market with a great variety in price ranges. Most are beautifully presented and well priced for quick sale.  Inventory has also picked up in Half Moon Bay, especially the higher end properties over the $1m price range, although that is still the quietest segment on the coast side market. Menlo Park has had a very good two weeks - good listings and good sales. However, the inventory is beginning to build even in the "meat and potatoes” price range in Menlo Park of $1.4 to 1.9 million.  Our Palo Alto office reports that the local market is very strong with half of the homes selling with multiple offers.  May was a very active month for closings in Redwood City, but the last week things have slowed down tremendously.  Open houses are well attended but buyers appear to be more cautious.  In San Mateo, the better priced properties are getting the most attention resulting in multiple offers. Those that are not in good to excellent condition are gathering dust. Finally, the market is picking up in Woodside. The under-$2 million market in Woodside has, indeed, arisen. However the market over $5 million is moribund. There are 19 listings in Portola Valley and Woodside over $5 million and no closed sales over that level. 
 
East Bay – Berkeley reports that agents are busy writing offers, with many multiple offer situations – usually 2-5 offers for each property. Buyers are frustrated and it is still a sellers' market in the core area. The number of Previews listings was up 11.1% from May of last year and the selling price per sq ft. was up 5.4%, but the average sales price was down to May 2009 and 2008.  Meanwhile, our Orinda office reports that they are seeing more inventory of $1 million properties.  Higher priced homes are moving at an increased pace, with the Previews market “robust.” The Danville market is remarkably active despite graduation time, during which it usually falls off. Things are steady in Walnut Creek, with good open house activity.  Inventory is still very low. In Fremont, inventory is steadily increasing, but sales are not matching the listing increase. Buyers have more inventory to view and appear to be more selective prior to submitting an offer. The Livermore market has remained stable the past two weeks with very little change. But there has been lots of activity the past two weeks in the previews market in Livermore. Active listings have dropped from a high of 30 to 21 with seven new pending sales. This market segment in Livermore has truly been on fire in 2010 as it was practically DOA in 2008 and 2009.
 
Silicon Valley – The week after Memorial Day was quiet in Cupertino. The market is feeling more active again, but definitely not the frenetic pace of April and May. Most open houses are not as busy as they had been. The market is still very good in Los Altos for new single family home listings that are priced and presented correctly. Warm weather is bringing out more buyers in Los Gatos, with both sales and listings on the rise. Meanwhile, the San Jose-Almaden market is seeing inventory inch up but sales are not keeping pace. REO inventory has become very limited. A home in Saratoga ($1.65 price range) sold for $130k over asking with nine offers. In Willow Glen, open houses are somewhat busy but sales have slowed down a little due to school letting out and graduations as well.  Market activity is picking up for median priced homes (700k - 1,200,000), according to the San Jose-Main office.  Lower priced homes continue to see multiple offers and generally are selling in 20 days or less. Open houses have been fairly active in all price ranges and buyer interest increasing, mostly due to the low interest rates being offered. Saratoga reports that the market seems to have settled down after the frenzy of buyers trying to meet the tax credit deadlines. It seems to be moving back to a normal market.
 
South County – Both inventory and sales are slowing down, according to our Morgan Hill office. This week the San Jose Mercury News ran an article in its business section entitled “Five Things to Know About The Housing Market in the South Bay Right Now".  The five elements of the article accurately reflected the state of the local market. 1.  Stiff Competition for Some Homes: If a home shows well and is priced right, sellers can expect multiple offers. 2.  Obtaining a Loan is More Complicated Than Ever: Underwriting and lender guidelines have changed dramatically in the past three years.  3.  Buyers Should be Prepared to Try and Try Again: See Number one Above. 4.  Appraisals Can Throw A Monkey Wrench Into A Sale: Getting a home to appraise for sales price is often times the biggest hurdle in closing a transaction. 5.  Completing a Short Sale Can Be A Hassle: Though Short Sales seem to be closing faster, the wait for buyers can last as long as several months.
 
Monterey Peninsula – Activity in the high end is much better this year in Carmel and along the Monterey Peninsula. We’ve seen a number of homes close at much higher prices than last year, including $19 million, $10 million, and $9.5 million. The highest price last year was $7.8 million, the next dropped to $5.5 million. So there are people with the necessary funds -- and these sales are usually all cash -- who are deciding this is a good time to buy here.  We have good open house attendance, lots of active buyers out looking -- still looking for value -- and we're seeing more multiple offers of late, even on properties that are not REO's.  Homes that are well located, in good conditioned and priced to sell can go into escrow in less than a week, even some in the $2-3 million range.  The area is looking forward to the U.S. Open at Pebble Beach next week. If the weather is good, there are often people at this sort of event who decide they'd like to have a property here!
 
That’s it for now. Have a great week!

So what to make of all this? A couple of things: First of all, these reports are a strong reminder that real estate – like politics – is a very local business. By all signs, the housing market recovery is slowly moving forward but the speed and degree of the rebound varies from region to region, from county to county and even from town to town. 
 
While the S&P/Case-Shiller indices show our local region’s prices up 16.2% from last year’s crisis levels, many of our cities have only seen modest median price increases of around 2 percent (including San Francisco itself). What’s really happening is that the mix of homes that are selling in our region is changing. A year ago, most sales seemed to be foreclosures and other distressed properties. Today, we’re seeing many more sales in the mid- and even upper-end of the market, which is driving up median prices for the region.
 
In our recent Coldwell Banker Residential Brokerage luxury reports, we have seen strong increases in home sales above the $1 million level and even (in the case of San Francisco) above the $2 million. Million-dollar sales in Silicon Valley in April, for example, were more than double last April’s level. At the same time, the median sale price climbed 7.3 percent over the same period a year ago. This trend away from entry level and distressed sales to higher-priced properties is a healthy sign that our market is steadily moving back towards normalcy.
 
While the improvement in the market so far this year give us reason for optimism, we must be mindful that we have our share of storm clouds overhead.  The federal home buyer tax credit has ended, and it’s uncertain what that will mean to the market. The financial markets, while greatly improved over last year, as still seeing a lot of volatility of late. And our unemployment rate remains stubbornly high.
 
Nonetheless, it’s important to remember that economic recoveries are rarely smooth. There will be potholes along the road, and lots of fits and starts. But given all the data in recent months – and what I’m hearing from agents and buyers out in the market – I’m cautiously optimistic that our local market is indeed on the road to recovery.
 
Below is a market-by-market report from our local offices:
 
North Bay — Greenbrae and Corte Madera are hot markets right now.  The under $1 million segment of the market is gaining momentum and the high end continues to attract new buyers. One Tiburon property had been reduced a couple hundred thousand a few months ago and finally got into contract on a contingent offer. When buyers couldn't sell their home, one agent put the listing back on the market and had multiple offers going well over asking price. Over the past two weeks the Southern Marin office has seen offers come in on listings that have been on the market for several months. Buyers are coming in so low, sometimes the sellers are not even countering. On lower end properties we have had a few multiple offer situations, but the offers are not at full price. There has been a slight upswing in sales activity in all price points in the Northern Marin area. The majority of the new inventory coming on is non-distressed. Short sale approvals from various banks are moving a bit faster. Our Santa Rosa office reports that for weeks the market has been active below 350K and increasing activity above 1 million.  We are seeing an increase in activity up to 500K now, with 500K to $1 million quiet.
 
San Francisco— The Lakeside office reports the local market is steady, but there’s a definite need for more inventory. Meanwhile, the Lombard area had a slow start to May, down in all activity from April, but a more balanced market.  More inventory is needed in this neighborhood as well.  The Market Street office reports good attendance at most of the properties being held open.  Per our weekly inventory reports, inventory for SFR and Condos, Lofts, TIC's is increasing.  Some 70% of ratified offers are in a competitive situation.  It appears that a lot of the buyers are looking for the same property!
 
SF Peninsula— The Peninsula market seems to be steady to flat right now. The Burlingame office reports that although things are a little slow in that community, this typically happens around Memorial Day. The good weather and some nice new inventory that is well priced and attractive should bring the buyers out over the weekend.  The Half Moon Bay market seems to be lagging behind the Mid-Peninsula in listings and sales. But as usual, well-priced, good condition homes will receive an offer within the first 10 days of marketing. Both of our Menlo Park offices report the local market as steady. But things are actually picking up in the $2 million and above market.  There are pockets of hot and cold areas in this price range. In Palo Alto, inventory remains low. What is listed between $1M - $2M have sold with multiple offers.  San Mateo reports a steady, healthy market. Things seem to be moving in a positive direction in San Carlos. Homes priced correctly and shown well are selling quickly. And in Woodside, inventory and sales are decreasing. But there definitely is some life in the market - especially on the listing side.  There are now 24 listings over $4 million in Portola Valley and Woodside.
 
Silicon Valley– Inventory is increasing in Los Altos, but single-family homes are still selling with multiple offers if they are in the good school districts and priced below $1.5 million, the hottest price range.  Four and five-bedroom homes are getting the most offers. Condos are very slow. Los Gatos reports that inventory and sales are steady, with the Previews luxury market continuing to improve.  Open houses remain very busy in Cupertino, but the market has definitely slowed down. New transactions are not keeping pace with closings. Market seems to have settled down a bit, according to our San Jose-Main and Willow Glen offices. Open house traffic this past two weeks was down compared to previous weeks. Activity seems to have slowed and buyers seem to be on the fence again. Meanwhile, the Almaden area is seeing inventory and sales activity increasing, with many homes still selling with multiple offers. A similar story is told in Saratoga, where there are numerous multiple offers for homes under $1 million – and even some under $2 million.
 
South County– Sales and inventory are decreasing, reports our Morgan Hill office as the market appears to be softening. There are fewer purchase contracts being written and accepted.  This phenomenon is most likely attributed to the lack of inventory and the fact that the federal tax credit is no longer in play. In addition there seems to be a question as to the viability of the state tax credit (will there be enough money to fund the program?) Short sales still dominate the market but REO listings are less prevalent than before. Prices, however, continue to increase as demand does outweigh supply.  Similarly, our Gilroy office reports the market has remained flat for the past month.  Buyers are looking, but there seems to be no sense of urgency.  Many buyers seem to be back to a "wait and see attitude" in regard to making offers.
 
Santa Cruz – The Santa Cruz County market is relatively flat in terms of closed transactions.  Approximately 43% of the sales in April sold were under $500K, with a high percentage of those short sales. A beach property that sold 3 years ago for about $1.5 million, recently sold on the court house steps for $780K, cash, after the bank walked away from a $950k price tag and escrow. On the bright side, some extremely well priced homes (below the last comp in the area) are selling, some with multiple offers.  The median price continues to inch upward since the low 18 months ago. In April, there were 7 properties sold in the $800 - $900K price range, 3 sold from $900,000 - $1 million. And over $1.1 million, 6 sales in April and there have been 20 sales at this point YTD.
 
Monterey Peninsula – The Monterey area mainly has short sales on the market now and they represent an increasing number of the local escrows.  While we are seeing a couple of the lenders get more efficient and organized in dealing with them, in general they still require many months for agents to get approvals on the sales. And we are seeing more instances where the lenders come back and ask for an increase in the purchase price; and, if substantial, the buyers declining and the property goes back on the market.
 
East Bay – Berkeley agents are busy writing offers, and competing more in multiple offer situations.  There still is a need for more listings to meet market demand. Castro Valley has seen a flurry of sales.  The market is picking up speed as we hit the summer months.  There is no shortage of buyers in all price ranges. Entry level and mid range price properties are going fast, and even the big ticket homes are starting to move.  The market is steady in Danville and Fremont, with more activity in the moderate price ranges, the Danville office reports. In Fremont, listing inventory is increasing due to the approaching summer months. Traditional sellers (active detached listings) are starting to dominate the market in the Tri-Valley area again. Traditional sellers make up 61% of the detached active listings in Livermore, 75% of the detached active listings in Dublin, and 85% of the detached active listings in Pleasanton. The Oakland/Piedmont office is seeing average sales price continuing to improve as low-end foreclosures wane.  Sales and inventory remain steady in Orinda and Walnut Creek.
 
A final note on our Previews Luxury market: Things continue to slowly improve in many areas, as evidenced by our Southern Marin office. In the $2 to $3 million range in Mill Valley, 32% of inventory is in contract and in Tiburon, Belvedere, and Sausalito, an average of 23% are in contract. Mill Valley has seen the most dramatic increase, with twice the number of properties selling over $2 million year to date versus same period a year ago.  And in San Mateo County, there are nearly twice the closed properties (14) in MLS over $5 million YTD as of last week ,than there were at this point last year.
 
That’s it for now.  Enjoy the Memorial Day Weekend –and if your weekend plans take you away, please travel safely.

Last week, the Conference Board announced that its consumer confidence index rose in April to the highest level in more than a year and a half. The rise in the index was considerably higher than economists had expected. Although the University of Michigan’s consumer sentiment index took a small step back in April, it’s still hovering at levels not seen since early 2008.
 
Similarly, the financial markets continue to march higher as growing evidence appears that the nation’s economy is gradually finding its footing. The Dow Jones Industrial Average is up 7 percent year to date and a whopping 70 percent since its March 9, 2009 low.
 
One last headline of interest: The Federal Reserve last week upgraded its economic outlook amid a better-than-expected recovery, saying the beleaguered labor market is beginning to improve. But the Fed voted to keep interest rates at historically low levels and signaled that wouldn't change anytime soon.
 
Low mortgage rates, coupled with the April 30 deadline for the homebuyer tax credit, have helped to fuel strong home sales in many of our markets. In my travels last week to a number of our offices, I’ve heard from agents that many of their buyers have been rushing to beat the tax credit deadline.
 
All of this is encouraging, but it’s not to say that we’re completely out of the woods. The jobless rate is still extremely high in California and across the country. A new wave of foreclosures could hit the housing market in the months ahead. And the economic recovery is fragile and expected to be slow. But one has to be at least cautiously optimistic by these economic trends, which are so vital for the health and well-being of our housing market.  One of the most important trends to follow is our Bay Area Month’s Supply of Inventory.  It continues to drop at all price points, from less than 2 months at the entry level, to between 10 and 18 months in some of our Luxury markets.  ( ex: San Francisco over $5 million:  19 months supply March ’09,  dropped nearly in half to 10 months supply March ’10)

Below is a market-by-market report from our local offices:
 
North Bay — We continue to see increases in the Previews price range, both in listings and in sales in Marin County.  Most recently the Southern Marin office secured the Marin Designer Showcase listing for $7,795,000. While the Greenbrae office says sales are increasing in that area, there is still some downward pressure on pricing.  Areas such as Corte Madera and San Anselmo are doing well with a good percentage of homes in contract. The low end - under $1 million in Marin - is moving steadily.  More much needed inventory continues to come on market. In Northern Marin, there has been a decline in REO's coming on the market and a steady stream of Short Sales.  One home in Novato by our office at $1.4 million went into contact the following day.  Cash is still king when buyers are making offers. The Santa Rosa market is holding steady with 350K and under listings very active, and the over $1 million market is seeing increased sales. In between it’s very quiet. Open homes remain well attended in Sebastopol, with more activity in the $500 - 700K range.
 
San Francisco— The Lakeside office reports the market is in full bloom. There are loads of well priced listings, and sales continue to increase. There are eight to 10 multiple offers every week.  It’s also been a very busy two weeks, according to the Van Ness office - good sales activity at all price points.  Over a third of the ratified transactions were multiple offers.  Presentation and staging of property are still critical, as only the gems are getting the high activity. The Noriega office is seeing well-attended open houses and homes below $800,000 are in hot demand. One third of the sales had multiple offers. April has been very erratic, according to the Lombard office: a busy few days, then quiet.  Open houses are well attended. There have been a variety of deals from stale listings going way under asking to 11 offers going 10% over asking. Fewer loan problems this month. The Market Street office tells a similar story. Ratified offers seem to be coming in spurts. Open house activity was slow over the weekend. Several closings are being held over from April to May in order to qualify for both federal and state tax credits.
 
SF Peninsula— Burlingame continues to see great listings get snapped up in multiple offers and well qualified buyers are waiting for the right inventory to come on the market. There are 75 active listings and 17 pending sales in Hillsborough.  There is great value in a great area and some excellent buys available right now. In Half Moon Bay, more offers are being accepted with 'sale of property' contingencies.  There’s good traffic at the open houses with serious buyers wanting to get into the market.  We’re also seeing more activity on the higher end $1m + range. Our Menlo Park offices report agents have been really busy the last couple of weeks.  Parents soccer field talk is that bonuses are coming back and 401ks are being reinstated.  General feeling of stability is giving 'lookers' a basis to buy. There was a bit of the April 15th hangover last week, previous weeks had several offers written as the market heated up.  Well priced listings are selling quickly.  Two outstanding properties in San Carlos had multiple offers and sold for more than the asking prices of $1.85 million and $1.95 million. Open houses are very well attended. The San Mateo office reports that pending sales for the six nearby cities are up 33% from 2009 and closed sales are up about 50%.  Quality inventory (shows well and priced right) is not as available causing the multiple offers. Similarly, the Woodside office says is has been as busy as they’ve seen it in since spring of 2007 and 2008.  Buyers are far more cautious however.  Many will make an offer and walk away if they do not have their terms met or discover any type of problem.
 
Silicon Valley– Our Cupertino office reports that they have never seen the market busier. Outstanding schools continue to propel the market. With decreasing inventory and strong demand, about a third of all sales are attracting multiple offers. Market activity is continuing to pick up steam in all price ranges in the Los Gatos area, with a Monte Sereno home closing at $3.45 million. Almaden pending sales are up slightly while Cambrian remaining very steady at 57% of inventory pending and Blossom Valley at 67%. REO listings have slowed and short sale approvals have increased. The Willow Glen office reports sales picking up for homes between $500,000 and $800,000. Open homes have been busy as well. Business is booming in the Saratoga area due to an improved Previews market and buyers focused on taking advantage of the federal tax credit. Sales of million-dollar homes are on the rise.
 
South County– The scramble was on last week - anxious buyers wanted to get into contract before the April 30 deadline for the federal tax credit, the Morgan Hill office reported. The South county market remains slow but steady - prices seem to be increasing as demand outpaces supply.  There seems to be a more positive feeling among buyers, sellers, and especially agents. The fact that the media is reporting good housing news is also helping buyers feel more comfortable about purchasing. The Gilroy market has also been steady, but seems to have leveled off the last two weeks.
 
Santa Cruz – Overall, the Santa Cruz market appears to be improving. The median price is $519k vs. $399K a year ago.  Inventory is down about 15% from a year ago, and the number of sales is slightly up - 109 closed transactions in March '09 vs. 129 in March '10.  The unsold inventory index is down to 6.9 months vs. 9.7 months a year ago.  Distressed properties continue to be a very large part of the market with 43% of the sales representing either bank owned or short sales. Issued default notices are down slightly about 10% from a year ago.  Homes are selling at deep discounts and as one of our agents noted, "the market is looking for value." The Previews market is ever so slightly improving. However prices are significantly lower depending on beach vs. country properties.  In March, the latest figures available, 12% of the sales in the country were over $1 million compared to 5% in February.
 
Monterey Peninsula — In the Carmel area, market activity continues at a steady pace.  There were 37 new escrows in the last two weeks, which was very good.  Listings are coming in at a steady pace.  There have been a lot of price reductions, though not as substantial as we saw for a while.  Prices on properties coming on the market seem to be more realistic now in most cases, so sellers are more in tune with current market place. There were a total of 82 open houses held over the past few weeks.
 
East Bay – Buyers are attending open houses in droves in Berkeley, up to 100 people at some listings.  Buyers were scrambling to get into contract by the April 30 tax credit deadline.  They are not necessarily late comers, but frustrated first time buyers who have been beaten out of multiple offer situations all spring. Multiple offers occur at all price ranges where there is perceived value, reports the Oakland/Piedmont office. Even with multiple offers, prices are realistic. Buyers do not want to overpay but seek out the best neighborhoods and houses. Castro Valley reports a big jump in listings, but well-priced homes are still flying off the shelves, sometimes before agents can get the sign up.  There are still a lot of short sales and a few REOs, but the pace is beginning to pick up for traditional listings. Sales in Danville are strong and open houses are well attended. Inventory is still low so there are many multiple offers. The Walnut Creek, Orinda and Pleasanton offices report that many first-time buyers are looking to take advantage of federal tax credit.  Well-priced listings are receiving multiple offers in most all price ranges.  There is a "positive" buzz in the air. Meanwhile, the Fremont office reports with the home buyers tax credit expiring there has been a decline in buyer activity. Listings are up which is typical for this time of year. Both sales and listings are increase in Livermore. The office reported five new listings over $1 million, and closed two sales above a million and higher end activity strengthened.
 
The weather is fantastic this weekend, open homes should be busy.  Will we see a little less urgency on the part of some buyers now that the Federal tax credit purchase deadline hit on Friday?  Or will the new California tax credits pick up the slack?  Stay tuned, we may have some indication in another few weeks.  That’s it for now. Have a great week!