East Bay Business Times - by Larry Klapow
It seems like each morning when I open my paper I find more alarmist headlines that paint a bleak picture of the country's real estate market. The trouble is, the news media often paints the picture with a mop that covers the entire U.S., missing the details afforded by fine brush strokes. As a result, consumers are often left with a somewhat inaccurate portrayal of the Bay Area real estate market, and that could ultimately cause them to miss an exceptional opportunity.
Real estate goes through cycles and the market has been down nationwide for the past couple of years - at least as far as the number of sales. Inventory levels have risen and loan defaults and foreclosures have increased - but just from historically low levels to more normal rates today. Some parts of the country have indeed seen slight declines in median prices.
But like all politics, all real estate is local. You cannot paint the entire country with one broad brush. There are counties in the Bay Area that continue to see increases in the median price. The most recent DataQuick results indicate slight year-over-year median price increases in Contra Costa, Marin, San Francisco and Santa Clara counties. And there are communities within each of these counties that have seen flat to increased sales figures throughout 2007 as well.
Homes that are in a desirable location, competitively priced, in good condition and presented well, are selling - often in a matter of a few weeks or couple of months and sometimes with multiple offers - hardly the bursting bubble that some portray.
While the red-hot real estate market of the past few years in the Bay Area has cooled off, confident real estate investors may find that this is a good opportunity in which to buy. Real estate is a strong, long-term investment. If you look at the last 37 years, we have seen very few times in which property values have dropped in California. In fact, according to the California Association of Realtors, since 1970 the median sale price for a single-family home in the state has only declined seven times - six times under 3.7 percent and once at 4.5 percent.
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