Wednesday, June 3, 2015

Danville Real Estate Market: It's Running Hot and Cold!


Danville Alamo Real Estate Market:  It’s Running Hot and Cold!
 

We’re near the end of May so we have enough data to review this year’s market performance against the same time period last year (January 1-May 19) and be fairly confident that it has meaning.

 On average home prices continue to rise both in Alamo and Danville.  A key driver to that growth appears to be relatively low inventory at the mid to lower price points for homes as well as great interest rates for buyers.  Low inventory coupled with steady demand has been the price driver in Danville and Alamo for 4 years.  The Danville homes that have sold so far in 2015, have sold on average within 23 days.  Let’s contrast that with the 88 active listings (homes not sold) that carry an average of 53 days on market with a list price ranging from $695,000-$7 million.  As I mentioned last month, it is indeed a tale of 2 markets. 

The dearth of inventory has not yet been resolved by market forces delivering a sufficient number of desirable properties for sale to tip the balance in the favor of buyers, although I am beginning to believe that change is much closer than it was in 2011.  The upper price tiers are pretty much flooded with homes for sale and last month I reported more than a year’s worth of inventory and a cold Danville Luxury Home Market. 

 Many of the homes listed in the upper price tiers are significantly over priced.  Some are listed above $1000 per square foot.  Of note, when and if these homes do sell, they will only need to fetch a little more than $500 per square foot, to drive average prices higher, so I would not be looking for average sales price to decline in the foreseeable future.

 I think it is also worth noting that some of the homes in this analysis sold for a lot less than $400 dollars per square foot. Proving that not every Danville home is worth the market average (mean) price in the minds of buyers and sellers, distressingly unlike Garrison Keillor’s Lake Wobegon where every home is above average.  Not listed on the chart is median price. It stands at $1,100,000 and is a really important number to aid our understanding of the market.  It means simply that half of the 88 Danville sold properties closed for more than this number and half sold for less.  Shockingly, it is true that half of all Danville sales were below median price and significantly more than half were below the average (mean) price. 

 Home sales increased in Danville by 2% from the previous year, while average purchase price moved up 6% year over year. This suggests that except for the very top tiers of price, where inventory is overwhelming demand, Danville’s low and moderately priced inventory is beginning to come smoothly into balance with buyer demand.  If I am right in this assessment, it is a good thing.

 Danville dollars paid for square foot came in at a 5% increase.  If it doesn’t sound like much growth, please think again.  That’s more than one half percent a month, although last year’s year over year rate of growth was 16%.  Remember too, as the base price grows, a single percentage point is worth more dollars.  The average dollar growth, year on year is equal to $65,819.  A percentage point last year was worth $11,348.   Moving forward, a percentage point will be worth $11,971.   We’re talking really nice growth in terms of dollars.  If we obtain the same level of growth next year as we did so far in 2015, Danville average price will move to $1,269,092.  Although the Danville Market has run hot and fast during the past years, I see nothing on the horizon to seriously limit that rate of growth.

 Also, something of consequence worth noting is that actual selling price in Danville is running above list price, but just barely.  We might expect to see this dial back even more as the market comes into greater balance.  Harkening back to a statement made earlier, what all this means is that homes that sell in first few days are selling above list price.  Bottom line, if you have owned your Danville Home during the amazing run up of the last four years, you have done really well, and if you price it right, it will sell.

 
It’s important to remember that there really is no “average” home and no two homes are exactly alike.  Computer generated estimates of your home’s market value are probably wrong.  If you would like multi-dimensional analysis of your home’s current market value, based on years of Alamo market experience, please give me a call 925-989-6086 or send me an email joecombs@thecombsteam.com. For more Alamo and Danville Real Estate articles, please visit our website at www.thecombsteam.com

 

 

 

 

 

Friday, May 22, 2015

The Combs Team Presents: The Alamo Real Estate Hot Market? Cold Market?


The Alamo Real Estate Hot Market? Cold Market?


 I love the Charles Dickens line from “A Tale of Two Cities”.  “It was the best of times. It was the worst of times.”  That’s how the Alamo Real Estate Market is shaping up so far this year.  For this analysis, I used year to date data and I broke the Alamo market into 5 parts in increments of roughly $500,000.  What I found is quite interesting.  

 For Alamo as a whole, inventory is incredibly low.  As of this writing, we have only 62 homes listed for sale.  Twenty-seven homes are listed as pending. One of these homes, incredibly, fits into the price band from $0-$499k.  This is by definition, a hot market.

 In the next price band $.5mm to $999,999, seven units have sold.  They sold on average in 28 days, at an average price of $813,429, were 1,673 square feet in size and sold for an average of $486 per square foot. Only one month of inventory remains. Definitely a hot market.

 From $1mm to $1.499 mm twenty-four units have sold in an average of 26 days, at an average price of $1,291,349. They were 2,436 square feet in size and sold for an average of $530 per square foot. Remaining inventory will last for 1.5 months in this hot market.  Incidentally, a month ago, Nancy and I obtained more than $800 per square foot for one of our clients in this price range. The property was a little over 1700 sq. ft.
 

In the next price band $1.5mm to $1.99 mm, nine units have sold.  The properties that did sell, sold on average in 22 days, at an average price of $1,563,611. They were 3,165 square feet in size and sold for an average of $494 per square foot. Nine months of inventory in this price range remains. This is a cool market.

 From $2mm to $2.499mm five units have sold in an average of 91 days, at an average price of $2,194,200. They were 4,524 square feet in size and sold for an average of $485 per square foot. Remaining inventory will last for 9 months in this cold market.
 
In the top tier price range from $2.5mm and up 5 properties have sold.  Those sold averaged 24 days on market, and sold at a price of $3,458,800.  These large properties were on average, 5,336 square feet in size and sold for an average of 543 dollars per square foot.  The current inventory level for these pricey homes stands at 16 months.  This market is cold.

 In looking at the market, from this perspective it is pretty clear that buyers are being very selective in purchasing properties priced from $1.5 million and up as only 19 have sold compared to 31 in the lower price points. That said, it appears that buyers move relatively quickly when a property is found with a perceived value equal to its price range. 

 With the exception of the $2-2.5 million price range, most properties are selling on average, in less than a month.  This suggests that buyers whom can afford to pay this much, are choosing not to spend the money, or perhaps the $2 million dollar price tag has become a huge mental barrier as was the $1 million dollar mark 20 years ago.

What all this tells us is that pricing properly will still yield a very fast sale.  It also tells us that if a home isn’t sold within the first month, it’s very likely that the property is not priced properly and the offer price should be carefully re-examined against its peers that have sold.  This examination should be multi-dimensional and not just include price per square foot, which can be misleading.
 
For the remainder of the year, I would expect that the hottest parts of the Alamo market will remain hot.  This will most likely continue until inventory builds to more normal levels of 3-6 months. I suspect one of two things will happen in the coldest parts of the Alamo market, the high end.  Either sellers will make intelligent price changes or they will begin withdrawing their properties from the market.

 It’s important to remember that there really is no “average” home and no two homes are exactly alike.  Computer generated estimates of your home’s market value are probably wrong.  If you would like multi-dimensional analysis of your home’s current market value, based on years of Alamo market experience, please give me a call 925-989-6086 or send me an email joecombs@thecombsteam.com. For more Alamo and Danville Real Estate articles, please visit our website at www.thecombsteam.com

 

The Combs Team Presents: Alamo Real Estate Market: It’s Running Hot and Cold!


 Alamo Danville Real Estate Market:  It’s Running Hot and Cold!
 
We’re near the end of May so we have enough data to review this year’s market performance against the same time period last year (January 1-May 19) and be fairly confident that it has meaning.

 On average home prices continue to rise both in Alamo and Danville.  A key driver to that growth appears to be relatively low inventory at the mid to lower price points for homes as well as great interest rates for buyers.  Low inventory coupled with steady demand has been the price driver in Danville and Alamo for 4 years.  The Alamo homes that have sold so far in 2015, have sold on average within 23 days.  Let’s contrast that with the 66 active listings (homes not sold) that carry an average of 70 days on market with a list price ranging from $875,000 to $42 million.  As I mentioned last month, it is indeed a tale of 2 markets. 

The dearth of inventory has not yet been resolved by market forces delivering a sufficient number of desirable properties for sale to tip the balance in the favor of buyers, although I am beginning to believe that change is much closer than it was in 2011.  The upper price tiers are pretty much flooded with homes for sale and last month I reported more than a year’s worth of inventory and a cold Alamo Luxury Home Market. 

Many of the Alamo homes listed in the upper price tiers are significantly over priced.  Some are listed above $1000 per square foot.  Of note, when and if these homes do sell, they will only need to fetch a little more than $500 per square foot, to drive average prices higher.  

 I think it is also worth noting that some of the homes in this analysis sold for a lot less than $400 dollars per square foot. Proving that not every Alamo home is worth the market average (mean) price in the minds of buyers and sellers, distressingly unlike Garrison Keillor’s Lake Wobegon where every home is above average.  Not listed on the chart is median price. It stands at $1,472,050 and is a really important number to aid our understanding of the Alamo market.  It means simply that half of the 52 Alamo sold properties closed for more than this number and half sold for less.  Shockingly, it is true that half of all Alamo sales were below median price and significantly more than half were below the average (mean) price. 

 Home sales declined in Alamo by 33% from the previous year, while average purchase price jumped 12% year over year. I attribute this to two things.  One, we have a lot of inventory that is priced well beyond what is achievable, and two, buyers are being very picky. They won’t pay too much and they won’t buy just anything.  They are content to wait until the right home comes along at the right price. So far rising interest rates are not concerning them.  It appears that a great many buyers are wanting exactly the same thing, so they are bidding up certain properties that meet their ideal while simultaneously ignoring those that don’t.

 Alamo dollars paid for square foot came in at a 13% increase.  If it doesn’t sound like much growth, please think again.  That’s more than one percent per month, although last year’s year over year rate of growth was a more impressive 18%.  Remember too, as the base price grows, a single percentage point is worth more dollars.  The average dollar growth, year on year is equal to $179,704.  A percentage point last year was worth $15,230.   Moving forward, a percentage point will be worth $17,289.   We’re talking really big growth in terms of dollars.  If we obtain the same level of growth next year as we did so far in 2015, Alamo average price will move to $1,924,266.  Unless more Luxury homes begin to sell, I predict that will not happen.  The market has run so hot and fast, it seems more likely that the rate of growth will steadily decelerate to a more normal 3-5% annual growth rate.

 Also, something of consequence worth noting is that actual selling price in Alamo is running above list price.  That is a positive change from last year, when buyers were actually negotiating prices downward.  Harkening back to a statement made earlier, what all this means is that homes that sell in first few days are selling above list price.  Bottom line, if you have owned your Alamo Home during the amazing run up of the last four years, you have done really well, and if you price it right, it will sell.


It’s important to remember that there really is no “average” home and no two homes are exactly alike.  Computer generated estimates of your home’s market value are probably wrong.  If you would like multi-dimensional analysis of your home’s current market value, based on years of Alamo market experience, please give me a call 925-989-6086 or send me an email joecombs@thecombsteam.com. For more Alamo and Danville Real Estate articles, please visit our website at www.thecombsteam.com

 

 

 

 

 

Monday, June 23, 2014

Danville Luxury Homes Clawing Their Way Back

Danville Area Real Estate: Luxury Home Market Clawing Its Way Back


The road to a full recovery has been a slow one for Luxury Homes.  For the purpose of this review as  This definition has been overlain on the geographies including Alamo, Blackhawk, Danville and Diablo, basically what in my personal view comprises the Danville Area.
with my last, I have defined Luxury Homes to include homes that are 5000 square feet and larger sitting on a premium lot that is between ½ and 1 full acre, equipped with a pool.


The Luxury Home Market bottomed in 2010 both in terms of average price and dollars paid per square feet.  At that time you could have bought a 5,800 square ft. home for an average price of about $1.9 million with a value of $327 per square foot.  Those prices were nearly 30% below the current market for a Luxury Home and 14 lucky bargain hunters snagged one.


During the Luxury Home Market peak in 2007, only 14 homes sold, but they did so with an impressive average price of $2,920,833 and an average square foot price of $506.  I’m frequently asked, “Are we in a bubble?”  I don’t think so.  In order to match the 2007 peak, Luxury Home prices will need to rise another 20% and at the current rate of growth we have some way to go before we even get close.

Although the line of ascent since 2010 has not been perfectly straight, it has for the most part been steady and I believe it is gaining strength.  Sales are happening faster. Days on market stand at 42 and are 25% less than 2013 and roughly a third of where they were 2012 at 154. Currently, through June 20, 2014, a total of 7 Luxury homes have sold.  The prices are roughly the same as they were for the entire year in 2013, suggesting no great improvement over last year.

Encouraging, however, is there are 3 homes pending sale, hinting that this year will have more Luxury Home sales than last year.  The Luxury homes that are pending sale are carrying a list price of $3,055,000 and an average square foot price of $463.  If those prices hold, it is likely that 2014 prices will eclipse 2013 prices. 

It should be of interest to anyone who follows the market that 15 Luxury homes are currently for sale and they are carrying an average list price of $3,610,905 and a square foot price of $556.  That is very aggressive pricing compared to the current market. If these homes were to close at list price, their average price would exceed the 2007 peak by 24%.  That, I believe would be unlikely and I think would definitely indicate a bubble.  I just don’t think we are there yet.

Nancy and I have more than 2,700 email subscribers who receive this article in advance of publication. You can add yourself to the list by sending me an email or signing up for it on our website www.thecombsteam.com.  I assure you no spam will follow.

Trying to figure out your next move?  Need numbers and answers to make your decisions?  Nancy and I will be happy to provide you with a personal consultation to help you figure it out.  No charge and no pressure just our honest opinions.  Please call 925-989-6086 or send me an email joecombs@thecombsteam.com 




#30

Wednesday, February 26, 2014

http://thecombsteam.com/danville-area-real-estate-great-start-2014-joe-combs-nancy-combs-combs-team/

Danville Area Real Estate: Great Start in 2014  

The Combs Team Joe Combs Nancy Combs Danville Real Estate
The Combs Team Real Estate Services for The Danville Area
 Although the early season in Real Estate is not a great predictor for the entire year, I thought I would look at the first 2 months of 2014 and see if there is anything useful to be gained by an analysis of this same time period last year.  I’ve used red and green in the chart to indicate the direction of change, green for the positive and red for the negative.  Days on market must be interpreted in the opposite as a negative change in days on market means market time is decreasing which is a good thing.
 The vast majority of indicators on the chart are green which portends well for another really good year for
Danville Area Real Estate.  An exception is in Alamo where the number of homes sold declined a bit, the prices are off a tad and dollars paid per square foot declined for the first time in a long while.  Is this reason for concern?  It’s probably not.  It’s just a small hint market prices in Alamo are unlikely to continue growing as fast as we have seen them during the past 3 years.
 A significant issue in Alamo is lack of inventory of homes for sale.  At this time only 44 homes are active listings and this is less than half of what should be normal.  Given this fact and insatiable demand for really nice homes, I look for great homes to continue to bid up in spite of the data presented here.  This does have the potential to move the price needle much higher by year’s end.  That would be unexpected, but still possible and most delightful since I live in Alamo.
 Blackhawk which has been lagging the rest of the market has taken a giant leap forward in the first two months of the year compared with last year.   The average sold price moved from $1,037,625 up to an amazing. $1,678,800 for a 62% increase in sold price.  The size of homes sold increased by only 32%, so we are forced to acknowledge that nearly half the gain is real price appreciation.  There are only 22 homes for sale in Blackhawk at this time, not very many.
 Last month I mentioned Danville was fast approaching Alamo on the basis of price paid per square foot with the possibility of overtaking.  With Danville sitting at $396 per square foot and Alamo at $386 for we can see that this has actually come to pass at least momentarily.  It will be interesting to see how these two areas compare at the end of the year.
 Diablo continues to gain momentum.  Sixteen homes sold compared to three this time in 2013.  Purchase price advanced from $1,877,083 to $2,021,402 up about 8% over last year and dollars paid per square foot advanced nicely as well.   Eight homes are currently for sale in Diablo and the lowest priced listing stands at just under $3.3 million.  This is one third more than the average price paid in Diablo so far this year.  What happens moving forward will be interesting indeed.
 I think the most notable information for the Danville Area Market contained here is the activity in Diablo and Blackhawk demonstrating an accelerating recovery for high end luxury homes.  A healthy Luxury Home Market is vital to the completion of a total market recovery in our area as it is a strong signal that buyers and banks believe Real Estate to be a sound investment.  I would like to think as confidence grows, we can expect to see high end home sale numbers increase.

The Combs Team
The Combs Team
 Nancy and I have more than 500 email subscribers who receive this article in advance of publication. Just send me an email and we can add you to the list.  joecombs@thecombsteam.com

Joe and Nancy Combs, The Combs Team, have a high degree of focus on Danville Real Estate and Alamo Real Estate and sell Real Estate throughout the East Bay. As always, if you have any questions about the Alamo and Danville California real estate markets, or finding that perfect home for sale in the East Bay, please let The Combs Team know! Call Joe Combs 925-989-6086 or Nancy Combs 925-351-6999.

copyright joe combs 2014 all rights reserved. A link to this article or any appearing on The Combs Team website may be shared freely without permission from the author.  Alamo Real Estate, Danville Real Estate Joe Combs Nancy Combs thecombsteam  combsteam Danville Real Estate Services Alamo Real Estate Services Realtor, Homes for Sale in Danville, Homes for Sale in Alamo

Read more Alamo Real Estate Articles on the Danville Real Estate Review Web site

Wednesday, February 5, 2014

http://thecombsteam.com/danville-real-estate-area-home-prices-recovered-joe-combs-nancy-combs-combs-team/

Danville Real Estate: Area Home Prices Have Recovered 

The Danville Real Estate market has shown dramatic improvement of late.  So much that I thought it would be good to take a look at the last 6 months of data and review our local market which includes Alamo, Danville, Diablo and Blackhawk.  During this time period homes have been selling at a rate of about 32 homes per month through January 27th.  Only 7% of sales are distressed sales, either bank owned or short sales and these special sales are becoming a much smaller drag on our market.

 Non-Distressed, desirable homes continue to sell fast.   The Town of Danville leads the way with a mere 28 days on market followed by Blackhawk with 49 and Alamo with 60.  Diablo has performed significantly worse on this measure at 188 days on market, but when you consider the prices paid for the Diablo homes the time difference can’t be considered bad.

 Of note is that the average size of homes sold in each of the areas has increased significantly since the market bottom in 2011.  The average for Alamo is up nearly 500 sq. ft. since then.  This is an indication that larger homes are now selling routinely.  Also important to note is with an average price of $1,461,294 Alamo home sales have surpassed their 2005 level.  With only 2 distressed sales in the past 6 months, I think an argument can be made that Alamo Real Estate has recovered.   Click Here To Read More and See the Chart.