Pleasanton March Update - Better Days Ahead?

So there is an old crotchety man who dies, and at the funeral the minister asks if anyone would like to say a good word about the decedent. Awkward Silence. Again the minister asks if anyone would like to speak on behalf of the departed. More awkward silence. Finally, a man in the back row stands up and says “his brother was worse”. Like this story, most discussions about the Pleasanton real estate market have resorted to “Antioch is worse, or Brentwood is worse”.

The truth is that the Pleasanton market is doing pretty well thank you, all things considered. Yes, it is sluggish in terms of sales. And yes, there remains downward pressure on prices in many price brackets and neighborhoods. But traffic is up, people are out looking, and the feeling is that better days are ahead. Now better days are not the frenzied, multiple offer, buyers will do anything to get your house type of market, but rather a market with stability in prices, and reasonable loan rates and terms where you can qualify for a loan (even if your last name is not Gates or Hilton).

In March, the Pleasanton market saw a bump in inventory and a slight dip in pending sales. Overall, the month of March ended with 206 available single family homes on the market, up from 185 at the end of February. About half of these were over $1 million. Pending sales dropped slightly from 43 in February to 35 in March. Inventory is going to rise, which is normal for this time of the year. Hopefully pending sales will rise now that everyone is done with Easter and Spring Break. (click on graph to enlarge)

In the under $1 million price bracket, inventory was up, with 106 single family homes on the market at the end of March, compared with 99 at the end of February. There were 26 pending sales in the month of March. 17 of the 26 were on the market for less than 30 days, and of the 9 that were on the market for more than 30 days, all but one had a price reduction. (click on graph to enlarge)

In the $1 million to $2 million bracket it was much the same story. Inventory was up, and pending sales slipped. There were 67 single family homes on the market at the end of March, as compared with 55 at the end of February. In March, there were 8 pending sales, down from 10 in February. (click on graph to enlarge).

In the luxury home segment (over $2 million), the market remained sluggish. Inventory was up slightly, with 33 homes on the market at the end of March, as opposed to 31 at the end of February. There was 1 pending sale in March in this price bracket, down from in February. (click on graph to enlarge).

Look for inventory to increase as we enter the prime Spring months. Short term rates are down, which is great for home equity lines of credit and existing adjustables. 30 year conforming fixed loan rates are decent, but the jumbo market is still in turmoil, and jumbo fixed loans are priced with a large premium right now, mostly because investors are not sure how to evaluate the risk associated with these loans. In all cases, underwriting guidelines have become more restrictive, and lenders are being very conservative and deliberate right now. With the recent moves from the Fed, it is clear that stabilizing the mortgage and financial markets is their number one priority, so expect to see plenty of liquidity and money available for banks to lend, which will have a positive impact on the real estate market.

There are signs that we are moving towards stabilization. Distant suburban areas like Antioch and Brentwood have seen strong increases in pending sales, an important first sign that buyers are entering the market. Brentwood currently has 187 pending sales, with an inventory of 514, or less than 3 months supply. This is a very positive indicator that buyers are starting to jump in. New home builders are seeing increases in traffic and sales, especially in the hardest hit areas. In Pleasanton, open house traffic is up in most neighborhoods, so there are definitely buyers out surveying the landscape. And homes that are well priced and attractive continue to attract attention, and many are in fact selling. As the old saying goes, “hope springs eternal”… or maybe Spring is the season of eternal hope.