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Ted Strodder


415.377.5222
Golden Gate
Sotheby's International Realty
189 Sir Francis Drake Blvd
Greenbrae CA 94904

Inventory and Sales Increase, Feds Cut Rates as Summer Real Estate Market Remain Steady

It’s August already and–wait, what? August? Where did  the summer go? Nowhere! It’s still here and these tend to be the best weather months for the Bay Area. After a fairly mild June and July, we’re looking for more of the same, despite the sizzling heat going on in the rest of the country. Outdoor activities will be at a peak this month as local residents scramble to get in their final days and weeks of vacation before the kids go back to school. Poor little guys, they really get the short end now with only nine weeks of summer, far less than the twelve weeks or more we got as kids. But of course, we never had a ski week or the numerous other extra mid-year days they get now. But what does all that have to do with real estate? Plenty, it turns out. 

As you may have read in this blog, many residents take off during the month of July. This includes home sellers and real estate agents, so inventory and activity both tend to drop significantly, but not always. Last year saw a busy July as smart sellers left (or even put) their homes on the market to capture family buyers who needed to lock into a school district. This year seems to be no exception as we have seen a 32% increase in the number of homes for sale and only a slight 5% drop in properties that went into escrow. So there remains plenty to choose from in all price ranges and buyer activity is off the charts high. I had over 200 folks through a new listing in Larkspur in the first four days just a week ago: from the Thursday Broker’s Open to the Saturday and Sunday open houses. The smart sellers spent a month fixing everything to make it a move-in ready home and were rewarded with four strong offers, all well over asking and two of them all cash with no contingencies of any kind. We closed in just 8 days, as seen here. Let’s see where the last half of summer ends up, but first an interesting note on the economy. 

Despite early fears of the R-word, it appears that a Recession may not in fact be in the cards, at least for this year and given what we currently know. I came across the following this week and found it interesting: If what Americans look for on Google is any indication, we’re nowhere near a recession. DataTrek Research examined domestic internet searches for words like “coupon” and “unemployment,” which were leading indicators of the Great Recession, and found that search volumes are down significantly. People search for the term when they fear a layoff is imminent. Google searches for “unemployment” started increasing in 2005 by more than 5% year over year. Google searches in June were basically flat compared to last year. April and May were slightly lower. “If the Federal Reserve looked at Google Trends they might not be so inclined to cut rates next week,” said one researcher. But cut them they did, with signals they may cut again before the year is over. 

The question now is, will that impact mortgage rates themselves and, in turn, the real estate market? Despite prevailing logic, The Fed does not control mortgage rates. They set the Fed Funds and Discount Rates for overnight loans from bank to bank or to member banks. And given that lower Fed rates can be good for stocks, investors often sell off mortgage bonds to invest in stocks. When bond prices fall, mortgage actually rise. As always, we’ll see what happens. 

That’s it for now. Enjoy August wherever you are and stay in touch with any questions. As always, I’m here to help. 

Ted

c 415.377.5222

ted@gomarin.com 

It’s August already and–wait, what? August? Where did  the summer go? Nowhere! It’s still here and these tend to be the best weather months for the Bay Area. After a fairly mild June and July, we’re looking for more of the same, despite the sizzling heat going on in the rest of the country. Outdoor activities will be at a peak this month as local residents scramble to get in their final days and weeks of vacation before the kids go back to school. Poor little guys, they really get the short end now with only nine weeks of summer, far short of the twelve weeks or more we got as kids. But of course, we never had a ski week or the numerous other extra mid-year days they get now. But what does all that have to do with real estate? Plenty, it turns out. 

As you may have read in this blog, many residents take off during the month of July. This includes home sellers and real estate agents, so inventory and activity both tend to drop significantly, but not always. Last year saw a busy July as smart sellers left (or even put) their homes on the market to capture family buyers who needed to lock into a school district. This year seems to be no exception as we have seen a 32% increase in the number of homes for sale and only a slight 5% drop in properties that went into escrow. So there remains plenty to choose from in all price ranges and buyer activity is off the charts high. I had over 200 folks through a new listing in Larkspur in the first four days just a week ago: from the Thursday Broker’s Open to the Saturday and Sunday open houses. The smart sellers spent a month fixing everything to make it a move-in ready home and were rewarded with four strong offers, all well over asking and two of them all cash with no contingencies of any kind. We closed in just 8 days. Let’s see where the last half of summer ends up, now to the economy. 

Despite early fears of the R-word, it appears that a Recession may not in fact be in the cards, at least for this year and given what we currently know. I came across the following this week and found it interesting: If what Americans look for on Google is any indication, we’re nowhere near a recession. DataTrek Research examined domestic internet searches for words like “coupon” and “unemployment,” which were leading indicators of the Great Recession, and found that search volumes are down significantly. People search for the term when they fear a layoff is imminent. Google searches for “unemployment” started increasing in 2005 by more than 5% year over year.  Google searches in June were basically flat compared to last year. April and May were slightly lower. “If the Federal Reserve looked at Google Trends they might not be so inclined to cut rates next week,” said one researcher. 

That’s it for now. Enjoy August wherever you are and stay in touch with any questions. I’m here to help. 

Ted

c 415.377.5222

ted@gomarin.com