Pleasanton Real Estate Market Update for August 2009

Sales Activity Is Very Strong

August 2009 Pleasanton Single Family Home Sales are up 48% from August 2008.

 The charts below show the sales activity for Pleasanton single family homes since January 1^st, 2009.

Starting in April 2009, the average monthly sales activity is 71 homes per month.

As you can see, homes sales doubled in the 2^nd quarter of 2009 and posted the strongest quarterly sales activity since the 2^nd quarter of 2007. 

Inventory Is On Steady Downward Trend

The inventory of single family homes for sale has dropped 37% since August of 2008.

The chart below shows the inventory level at the end of each month for Pleasanton single family homes since January 2009.

With the pace of sales for August 2009 at 77 homes, the unsold inventory index stands at 2.2 months of inventory.  This is the amount of time it would take to sell through the current inventory of 169 homes.  This number is considered to be very low.                                                               

Commentary

With the high sales activity and low inventory levels, it would be tempting to call this a sellers’ market.  However there is no evidence of any improvement on pricing levels. The median sales price for August 2009 of $706,500 for Pleasanton is down 3.22% from $730,000 for August of 2008.  Of the 126 homes currently reported as “pending” or under contract 52 of the 126 are either short sale properties or REO properties.  Short sale properties are homes being sold by the current owner where the home’s value is less than the amount owed.  The owner attempts to negotiate with the bank to accept less than the amount owed in order to avoid foreclosure.  REO properties are homes being sold by the bank that has taken a property through a foreclosure process.  The 52 properties represent 41%of all the current “pendings”. In other words 4 out of every 10 sales currently under contract represent a distress sale.  

No one knows what lies ahead, but looking at the current supply of homes for sale there is some bright news.  Of the 167 homes currently for sale as of 9/14/2009, only 11(or 6.5%) and 3(or 1.8%) are distress sales for a total of 14 or 8.3% of the total of 167. An abundance of distressed properties in a market can bring values down. For now, Pleasanton has a very limited number of distress sales and that has kept property values from free falling as much as we have seen in communities like Brentwood and Hayward.

Mid Year Market Update/January 2009-June 2009

The Pleasanton Real Estate Market has seen a surge of activity in sales of single family homes.  The 2^nd quarter of 2009 ended with 205 sales, the highest number of quarterly sales activity since the 2^nd quarter of 2007. Sales for the quarter were up 114% over the 1^st quarter of this year. 

At the same time the inventory of homes for sale is trending downward.  Normally inventory tends to increase on a seasonal basis between the 1^st and 2^nd quarter.  This year the inventory has dropped from 237 homes for sale at the end of the 1^st quarter to 213 homes at the end of the 2^nd quarter.   As of this writing (7/29/2009) the inventory level has dropped to 186 while sales for the month of July has reached 75 with two days remaining in the month.

For the 2^nd quarter short sales and REO properties represented a significant percentage of the total sales with short sales coming in at 36 or 18% of the total of 205 and REO properties coming in at 15 or 17% of the total of 205.  Combined distress sales accounted for 25% of the total sales activity.  For the month of July that percentage is down to 19%.  Of the current inventory of available homes for sale (186) there are 14 showing as short sales and 2 as REO sales for a combined total of 9%.  The number of distress sales appears to be shrinking for the moment.

Pleasanton Real Estate Market Update for May 2009

The month of May showed continued improvement in the number of Pleasanton homes that went under contract. 64 homes went under contract in May (as of May 28^th when this article was written) a significant increase over the average of 33 homes going under contract in each of the first three months of 2009.

May ended with 219 homes available for sale (note: at the end of May 2008 there were 262 homes available for sale).  This would put the unsold inventory index at 3.4 months supply of inventory.  The unsold inventory index is a unit of measure that is used to evaluate the strength of the market.  It takes the current number of sales for the last 30 days and divides it into the number of homes available for sale.  In this case, that would be 219 divided by 64= 3.4.  That is down substantially from as recently as February of this year when the unsold inventory index stood at nearly 10 months of inventory.  Many experts believe that anything under 6 months is considered a sellers’ market.

A closer look at the break down of inventory into price brackets reveals that the months supply of inventory is even lower in certain price brackets and higher in others:

This graph reveals that 80% of the sales activity is happening in the under $1 million dollar price range where the unsold inventory index is under 2.1 months.  In contrast, homes over $1 million dollars are showing a much greater months supply of inventory with the highest being 20 months for homes in excess of $2 million.  This is due in part to the difficulty of obtaining financing for loan amounts in excess of $729,000. 

 In the townhouse and condo category, Pleasanton sales are quite strong while the available inventory continues to decrease.

At this time last year there were 66 townhomes and condos available for sale in Pleasanton- nearly 3 times as many.  As recently as January of this year there were 41 available for sale with only 4 “pendings.

Pleasanton Market Update for April 2009

The month of April showed a strong improvement in the number of homes that went under contract. 64 single family homes went under contract in April- a significant increase over the average of 33 homes going under contract in each of the 1st three months of 2009.

How many homes were for sale in Pleasanton during the month of April?

April 2009 showed a 6% increase in the number of homes on the market as compared with April 2008.

There were 354 homes (248 single family homes) for sale last month as compared to 333 homes in April of last year.

Of these how many were new listings for the month?

115 homes were new to the market in April of this year as compared to 118 new listings in April 2008, representing a 3% decrease in number of new listings from this same time last year.

How many homes went under contract in the month of April?

The sales pace in April picked up considerably compared to previous months this year. 64 homes went pending last month compared to 66 pendings in April 2008. This represents a 6% decrease in sales for the same month last year.

At the current pace of sales, what is the month’s supply of inventory?

At the current pace of sales, Pleasanton has approximately 3.9 months of inventory on the market (otherwise referred to as the unsold inventory index). In April 2008, there was 3.5 months of inventory on the market.

The 3.9 months is a statistic calculated by the number of homes available for sale at the end of April divided by the total number of sales in the month of April. 248 divided by 64 sales =3.9 months.

Pleasanton’s unsold inventory index is down substantially from as recently as February of this year when the unsold inventory index stood at nearly 10 months. Many experts believe that anything under 6 months is considered a sellers’ market.

In what price range are homes selling?

80% of the sales activity is happening in the under $1 million dollar price range where the unsold inventory index is under 2.5 months. In contrast, homes over $1 million dollars are showing a much greater supply of inventory with the highest being 20 months for homes in excess of $2 million. This is due in part to the difficulty of obtaining financing for loan amounts in excess of $729,000.

Market Commentary

The month of March showed a strong improvement in the number of homes that went under contract. 43 homes went under contract in March vs. 29 homes in January and 27 homes in February-nearly a 72% increase.  Here is the breakdown of those sales:

The total sales of 99 homes in the 1st quarter of 2009 represents a 71% increase over the 1^st quarter of 2008 with 58 sales.

REO and Short Sale Activity

Of the 99 home sales in the 1^st quarter of 2009 over one third include distress sales in the form of REO properties or short sale properties.  REO properties are those homes that have gone through the foreclosure process and are now being sold by the bank.  Short sale properties are those properties where the owners are attempting to work with the bank to sell the property for less than the amount owed in order to avoid foreclosure.

Of the 58 properties that sold in the 1^st quarter of 2008, only 6 properties were REO and 2 properties were short sales. That equates to 14% of the total.  The increase represents a 250% increase from the 1^st quarter of 2008 to the 1^st quarter of 2009.

Homes Currently For Sale

Within the group of homes currently for sale, the percentage of distress sales is only 16%.  That is a dramatic improvement over the 36% from the “pending” sales group above.  It’s unlikely that REO and short sales are done but at least for now the improvement will help to stabilize our market.