Prices are definitely stabilizing somewhat in all local areas.  As you can see from the chart below, all of these areas saw an increase in median price from the 1st quarter to the 2nd quarter of this year.  It's the first time since 2006 there has been a quarter to quarter increase in median price.  Does that mean that home prices are increasing?  No, the more likely explanation is that sales of higher priced homes that were sitting for longer periods of time are now beginning to sell.  Combine that with the dramatic uptick in activity in some of the lower price ranges, and there are definitive signs that the market in most of our local areas is bottoming out and we are starting to see a floor under the price depreciation over the past few years.  Despite this, it is still somewhat of a buyer's market, as homes that aren't properly priced or have some other deficiencies that buyer's can't overlook.  Also, appraisers have added a wrinkle to many home sales in that they are being much more conservative in their approaches, and are reluctant to appraise a home at the contract price if there are lower comparable sales in the area, even if those comparables are distressed sales of foreclosures and short sales.  Banks are still holding back a fairly large inventory of foreclosed homes, so buyers can expect more choices as some of those hit the market in the upcoming months. 

We're now about 3 years past what turned out to be the height of the real estate market bubble.  In the higher priced areas, the number of sales remains down from a few years ago.  In Walnut Creek, for example, the number of sales in the first quarter of 2009 is down 32% from the same period in 2006.  What is notable though, is the number of sales in lower priced areas like Concord, Martinez, and especially Antioch & Brentwood.  The number of sales in those areas is dramatically higher than we've seen in quite some time.  The reason for all the activity in those areas is mainly lower prices.  Prices have fallen so far in Concord, for example, that the median price of a home sold in the first quarter there is hovering around $200,000, down 63% from the median price of $535,000 back in the first quarter of 2006.  Prices have fallen faster in many of the lower priced areas in Contra Costa County.   This is due mainly to more foreclosures in those areas, and banks anxious to sell those homes to get them off their balance sheets.  For the first time in many years, buyers that thought they might be priced out of the market and now able to find affordable homes.  It's also clear that buyers in these lower priced areas sense a bottom to the market.  Multiple offers and homes selling higher than their asking prices are common these days in many neighborhoods.  You can see in the table how different the price depreciation has been depending on      location.  The number of home sales in Concord in the first quarter rose 92% over the same period last year.  In Antioch, the number of sales rose 127%!  Remember that the downturn started in these lower prices areas, and it's likely to see a bottom and a turnaround before sales start to increase in higher priced areas.  We're also likely to see further price depreciation in the short term in many of these higher priced areas. 

I remember the first time I had a home staged.  It was 2001, and I was having trouble getting a nice vacant home sold.  I thought that if we furnished it, and tastefully decorated it, the space would be more well defined, and easier for buyers to comprehend the floor plan and mentally move their things in.  It worked well.  The home sold within a few weeks after staging it.  It was the first of many sucess stories I had with staging properties.  By 2003, all my listings were being staged in some way, and in 2004, I actually had a full time assistant/stager on my payroll along with a large storage room of accessories and small furniture. 

What I've always loved about staging was using the furniture and accessories to showcase the best parts of the home, and de-emphasize some of the drawbacks.  I wanted buyers to walk in and think "this is the kind of place I want to live".  I never wanted them to know that there was anything deliberate or intentional about what they were seeing, or that the home had been "staged" for their benefit, just that it was a nice comfortable space they could enjoy, and thus, they should buy it. 

How things have changed.  I was out with some buyers the other day in Danville.  Virtually every house we looked at was "staged".  Evidently, all the stagers read the same book, because instead of any of these properties standing out as special, they all looked like an IKEA showroom.  In one case, the seller was home, and complained that the stager made them take their TV down from the wall in the family room so they could make the room more appealing.  Since when is a nice TV on the wall in a family room a distraction that needs to be changed?  Don't most people WANT a TV in their family room?  At another house, the agent actually had a "this home is staged" rider on their sign.  Then when you walk in, there's a giant flyer stand with the stager's info and business cards on the table.  What is that supposed to accomplish?  Are we selling houses or staging services??  When I bring a buyer to a home, I want them to focus on the house, not whether or not it's staged.  Staging is becoming so predictable, it's almost a joke to many buyers now.  The vacant house with one chair, a shawl thrown over it in the corner and a fake plant next to it in the family room?  This is supposed to entice buyers?  By the last house, my clients were more engaged with the checking out the similarity of the staging in each home than the houses we went out to look at. 

Another common idea that's become some sort of staging law is depersonalization.  Now, I couldn't agree more that Grandma's pics in the hallway of all the kid's graduation pictures from the 1970's have to go, but most stagers have taken this depersonalization to a silly level, as if every trace of the family living there has to be erased and sterlized away.  Recently, I had clients with a beautiful wall of family picures, interwoven with artwork and motivational phrases in wood letters.  They were going to take it down.  I told them to leave it (Gasp!).  It was beautiful.  It made the room a better place.  Was it going to prevent a buyer from mentally moving in?  Not in my opinion.  Exactly the opposite, I thought.  This was a house that was going to appeal to a family with young kids, and to see that there was a happy family here now was inspirational, not distracting.  The house sold in a week to a family with 3 kids, just like the family that was leaving. 

All these endless HGTV staging shows don't help.  You can't turn on a TV anymore without seeing a perfectly staged home.  Sterile colors, sterile accessories.  What was once something that was used to help sell a home has become a distraction in many cases.  Stagers and agents need to get back to the main job at hand.  Accentuate the positive and de-emphasize the negative.  Each home is different, and requires a different approach and expertise.  Throwing some furniture in and a few pictures from Pier One Imports just doesn't accomplish that.  And please - get that silly tray with the champagne glasses and fake fruit off the bed!  Who lives like that?  Who wants to live like that?  Stagers also need to quit promoting themselves in homes, and agents need to stand up to them on that - no staging flyers and business cards.  You're trying to sell a house, not get the stager more business.  If an agent thinks their stager is great, they should tell everyone in their office, and every other real estate office in town, but they don't need to have their marketing materials greeting potential home buyers.  It's about selling THE HOUSE!

I've had the conversation with many a prospective home seller over the past 3 years.  They'd like to sell, but don't want to do so in a "bad" market.  They're going to sit it out and wait for the market to "turn around". 

I'm always a bit baffled when I hear that.  The reality is that even when our real estate market does bottom out, it's highly unlikely that we're going to see a quick turnaround in prices that will make them quickly rise to anywhere near the levels we saw at the height of the market in 2005/2006.  Most people I talk to that are knowledgeable about the market feel that we'd be fortunate to see annual increases even in the 3-5% range for the next few years once we do reach a floor in prices.  My fear is that many of these home sellers will end up selling at or near the bottom in terms of pricing.  While waiting for the bottom to sell may speed up the time it takes to sell, it's unlikely to be a wise long term move.  Just as many people in the stock market sell after a big market drop, and then buy again after the market appears to have recovered, it's all too easy and common to get wrapped up in fear-fear of losing more money, that can cause poor decision making and short term thinking. 

Properties are selling in today's market.  While it's a certainty that you'll get less today than you would have one, two or three years ago, it's also a strong possibility that you could get more today than you might in one or two years ahead of us.  If you could turn back time and sell your home at the price you could have gotten a year ago, would you?  At the time though, you would have been disappointed as the price was down from the year before.  This can be an endless cycle that by the time you get to the end of the road and really don't want to wait any longer, some great opportunities have passed you by. 

If you're thinking about selling, whether to move out of the area to retire, or simply to buy a new home locally, you may find that the present could be the best time we'll see for awhile in terms of price going forward.  Whatever you're trying to accomplish in your move, consider your other goals outside of the sales price.  Whether it's a different school district, a larger house, or getting closer to work, waiting for the right time can be a frustrating, and in the end, a pointless exercise.  Trying to predict when and where the market will bottom out is a fool's game, and I won't pretend to be     better at it than  anyone else.  There is a wisdom to planning for the future accepting today's circumstances rather than wishing and hoping and waiting for things to get back to where they were before.

In many local areas, the number of home sales was up in the 4th quarter from the same period last year, somewhat of a surprise given the  economic climate.  There are two factors contributing to the increase in sales.  The first is price.  The areas that have seen the highest growth in sales are also the ones that have seen the greatest price   declines.   Secondly, interest rates reached long-term lows again in the 4th quarter, nearing 5% for a conforming fixed rate loan. Despite the increase in activity over last year, all areas saw price declines.

The silver lining in our market currently is the lack of available inventory of homes for sale.  As of today, the lower priced areas are still seeing the lowest available inventory.  Many buyers seem to have determined that the market is bottoming out in these areas, and with the increased affordability and low interest rates, are taking the opportunity to buy now.  This is a good sign pointing to a market recovery sooner than later.  The number of foreclosures in the more expensive areas have remained low, keeping prices from sinking as quickly.  These areas may see further price declines before we see buyer activity start to increase dramatically.

Another interesting factor is the rental amounts have been decreasing at all price levels, and there is more availability of rentals than in quite awhile.  This would seem to reflect the effects of a poorer economy as fewer people overall appear to be moving into or staying in the area.  Rents are down at least 10-15% in many areas from a year ago. 

In the recently passed stimulus package, there are two main benefits for housing in general.  The conforming loan limits for high priced areas like ours have been raised again to $729,000, potentially enabling more buyers to    qualify under the higher limit.  Secondly, an $8000 tax credit has been added for first time home buyers (or those that haven't bought a home in 3 years).  Unlike the previous $7500 tax credit put in place last year, this one does not have to be repaid.  Please talk to your tax advisor for further information if you are considering buying a home in the near future. 

In July, 2008, a Zillow.com survey found that only 38% of homeowners across the country thought the value of their homes had declined in the past year.  In a more   recent survey they conducted in January, that number has risen to 57% of homeowners that now believe their home's value had declined.  Still, there is a lot of disbelief out there, as the reality is that almost all homes have lost value (in some    areas, significantly) in the last year.  Additionally, the same survey found that 70% of homeowners surveyed believed that the value of their homes would  either increase or stay the same in the next 6 months.  With all the bad economic news out there, those numbers are truly astounding.  While nobody can  predict the future, all short term indicators are that most areas are going to continue to see some price declines in the short term. 

In our local area, the numbers that we see on a daily basis speak for themselves.  The median price of a single family home in Walnut Creek fell 15% from the 4th quarter of 2007 to the 4th quarter of 2008, from $870,000 to $740,000.  The decline was more pronounced in the townhouse & condo market, as the median price of those types of properties in Walnut Creek saw an 18.7% decrease in that time period, from $490,000 to $398,500.*  Still, I see numerous properties listed for sale daily at prices  more inline with comparable sales from 1-2 years ago rather than today's more realistic expectations.  While it's difficult to watch your home's equity declining, it's even more devastating to convince yourself of a value that isn't realistic and to linger on the    market indefinitely waiting for an offer that will never come.

The initial pricing of a property is instrumental in finding a buyer for a home.  Even if a price is later reduced, the amount of time spent on the market can give potential buyers great concerns.  When potential buyers see a property on the market a long time, they can become concerned that there is something wrong with it, or they may simply shy away from a home that has garnered so little attention.  Buyers want homes that are in demand, and by overpricing initially, you risk losing that initial enthusiasm that buyers have when a new property comes on the market.  In a declining market, it's also likely that a future price reduction may not be significant enough, forcing you to make a similar move in the future, what's known as "chasing the market downwards".  If you're considering selling in the near future, it's wise to be realistic as to the true value of your home.

*Above data compiled from the Contra Costa Association of Realtors MLS on February 11, 2009. This information is not comprehensive, as some sales information may not be included here. The information is deemed reliable, but has not been verified by Ken Jacobs or Empire Realty Associates.

Sales remain consistently slower in most parts of Contra Costa County, while prices have continued to decline, although at a somewhat slower rate.  While foreclosures have dominated East County, and even parts of Concord, they remain relatively infrequent in the central areas of Walnut Creek, Lafayette, and Pleasant Hill.  Overall, in  Walnut Creek, sales in the second quarter of 2008 are down just slightly, although the median price has declined about 12% in Walnut Creek from the same period a year ago.  Concord, on the other hand, has seen a dramatic increase in homes sales over the same period last year, mainly due to the large number of foreclosures that have been completed.  Banks will typically list foreclosed properties at reduced prices to get them sold quickly, which is also reflected in the 33% decline in the median price of Concord homes from the second quarter of 2007 to the same period this year.  Interest rates had been favorable, which was helping to entice buyers back into the market, but they've recently risen well above 6%.  While that historically is still a very good rate, it is not as advantageous as rates were a few months ago.   Credit issuers continue to heavily scrutinize borrowers in this new lending climate as well, in many cases penalizing borrowers with a credit score of under 700. 

So where do we go from here?  There's still an underlying lack of confidence in the housing market, but most economists are now generally agreeing that we should see a bottoming out of the massive number or foreclosures, and hopefully price declines within the next year.  Whether a market rebound can occur will depend on the overall economy, interest rates, and better credit availability.  It's likely however, that any future price increases will be longer term.  So, is it a good time to buy or sell?  If you're thinking about buying and planning on staying in the area for at least the next 3 years, it actually could be a great time to buy, especially in the Fall or over the Holidays, as there are some motivated sellers out there.  Just make sure you have your loan approved ahead of time, and you do your homework on values in the neighborhood.  If you're thinking about selling in this market, but are concerned about the timing, it's still more likely than not that prices could fall further before they stabilize, and it's unlikely that there will be any big rebound in home prices in the immediate future.  While it may be difficult to sell at a lower price than you could have received a few years ago, that ship has sailed and is unlikely to return.  All  evidence now is suggesting that prices were artificially inflated from all of the bad loans being made at the time, and that prices are now coming back to where they would have been in a "normal market" for the past 5-6 years.  If you have any questions, or just want to talk about the possibilities, please let me know!

Staging® has become the "in" thing to do in real estate sales.  HGTV© spends endless episodes on the subject, and many staging® companies and designers cropping up, as well as many real estate agents marketing themselves as staging® experts.  I'm in many houses with prospective buyers, and I can tell you first hand that what starts with good intentions of making a home more appealing, can easily backfire and become a distraction to potential buyers.  Staging® is truly an art, one that when done well subconsciously pulls potential buyers in by creating a warmth and feeling of comfort to the space.  The idea is not just to show a home "furnished", but to show buyer's its greatest potential.

Some things I've seen recently as an attempt to stage® include a home with lawn chairs brought in to the center of a vacant living room with a plant in between, a large master bedroom with a small, cheap wicker chair in the corner and a shawl thrown over it, a 1950's kitchen with place settings on the countertop in an otherwise empty space.  All of these types of "staging" do nothing to enhance the buyer's feeling about the property.

It's important to get back to the main purposes of staging® a home -

1.)    Define the space - If there is too much furniture in a room, it makes the room feel smaller and compact.  Furniture should be minimized, and arranged in a way that creates flow throughout the house. 

2.)    Use rooms as they were intended.   Maybe you have your office in the dining room, because that works for you, but with potential buyers, it will emphasize that there isn't enough room for them.  I had a client last year that converted the large master bedroom into a family room.  It worked for them, but buyers couldn't see past it to other possibilities.  To this day, I'm confident that home would have sold quickly if the seller had allowed us to convert that room back to its intended use.  Dining rooms should be set up as dining rooms, living rooms as living rooms and so on. 

3.)    Show off the best features of your home - If you have attractive hardwood floors, don't cover them with lots of rugs.  If you have a great view from a particular room, highlight that and don't cover it up with large curtains.  Remember, buyers are buying your house, not your things.  As Barb Schwarz, founder of StagedHomes.com says, "If they can't see it, they won't buy it."

4.)    Neutral Colors Rule! - Maybe you love your purple bedroom, but the majority of buyers won't.  Painting and flooring are two of the most cost effective improvements you can make prior to putting your home on the market, but keep it simple!  Paint colors should be neutral tones, with some contrast between your wall color and trim color a good thing.  Also, accent walls with a shade darker tone than the other walls in your room can add depth and interest.  Color can and should be added later through accessorizing the space. 

5.)    Light and Bright - If there's one thing most buyers I've worked with over the years are universally looking for, it is a home that has great natural light.  Keep windows unobstructed and curtains and blinds open when you're showing your home.  The difference between entering a dark house, and one that is light and bright is unmistakable in the minds of potential buyers

6.)    Beware of odors - Staging® is more than just the arranging of the space.  It encompasses everything potential buyers experience when viewing a home.  If you're thinking of cooking Salmon one night, you may want to reconsider!  Is there something causing a musty smell in the bathroom or basement?  Buyers will notice, so getting that problem eradicated before going to market is crucial to getting top dollar.  Have pets?  Potential buyers may not.  If it's possible to have them stay with friends or relatives during the sales process, that's ideal, but if not, make the litterbox is in an inconspicuous spot or the yard is picked up daily! 

If you're considering staging® and selling your home, consider using an Accredited Staging Professional (ASP)©.  Lists of ASP realtors® and stagers® are available at www.stagedhomes.com.   

Over the years, this would have to be in the top 5 questions I've had from buyers and sellers alike.  The common perception of most sellers I talk to is that Spring is the obvious time - nicer weather, flowers are blooming, etc., and certainly it is the most popular time of year to sell.  Also, many families with children like the idea of getting the move done over the kid's summer vacation.  With the uncertain market times these days, that can be a little hit or miss.  But, is Spring really the best time to sell? 

While there are typically more sales as Spring rolls around, there's also a lot more competition.  The reality is that any time of year can be a good time to sell if your home shows well, and is priced competitively with the market, but I think there is something to be said for lisitng in January and February.  Looking back at my own sales over the years, I've had great success in the first two months of the year.  There is typically much less competition, and many potential home buyers are coming out of their holiday season hibernation with an excitement about getting back into the market.  Maybe it's a little bit of holiday euphoria left over, and the fact that our Winters can be quite mild, but each year, regardless of an up or down market, I've found open houses to be busier and have had great success in getting listings sold.  In the down market we've had the past few years, I've found that to be especially true.  Any new listings I've taken after tax day seem to get caught up in a wave of other comparable homes for sale, and increased buyer apathy, leading to price reductions and longer market times.  In a seller's market like we had a few years ago, any house would sell at any time of year, but in these slower times, sellers would be smart to consider the option of going to market earlier than the widely accpeted "Spring selling season".

For buyers on the other hand, my advice has always been the same.  If there is a good time of year to buy to get the best deal, it would be between Halloween and Christmas.  Sellers that are generally selling during this period are usually doing so out of necessity - job transfer or other family reasons are most likely - and are usually more motivated to finalize a sale.  Each year, in our marketplace, the median home price dips slightly in the 4th quarter.  Inventory is typically lower during this period, so the number of options may be more limited, but if you can find what you're looking for, you're likely to have less competition from other buyers and find yourself in a better negotiating position than in other times of the year.