Bernard’s Danville Real Estate Blog

Latest Full Months Statistics for Danville Homes
(including Blackhawk and Diablo)

Previous months figures shown in parentheses	Detached Single Family Homes	Condomiums, Townhomes, others
New Listings	80(92)	22(19)
New Sales Agreed	38(32)	9(10)
Closed Sales	30(14)	8(7)
Median Price - Closed Sales	$791,250 ($961,250)	$504,337 ($515,000)
Average Days on Market - Closed Sales	117(90)	91(54)

At the beginning of April, 2009, there were 286 detached single family homes for sale in Danville (up from 271 in March, 2009) and 64 condos and townhomes etc. against 65 a month ago. So there is around 9 months supply of single family homes in Danville and 6 months supply of condos etc. The supply of condos is still being taken up faster than single family homes, but still, 9 months supply is a lot less than in many parts of Contra Costa County.
     What is of particular note is that the median price of closed sales has fallen significantly for the third straight month. Danville home prices are not as resilient as many thought. The increasing time on the market suggests that sellers may have been trying to sell their homes for unrealistic prices but they eventually given up waiting for higher offers and accepted the reality of the situation.
     So what happens now in Danville? Certainly there are plenty of buyers about but they will still be cautious when they see these figures. Home sellers will need to price their properties very aggressively if they really want to achieve a sale.
     I still think it is a good time to buy in Danville. Interest rates are low and there is a lot of choice. If I was thinking about buying here now, I would make a very careful assessment of real value and base any offers on that, rather than just on the asking price. And there are still bank owned foreclosures that offer particularly good opportunities in many cases.

Many parts of the Bay Area, and in particular, the San Ramon Valley and Lamorinda, historically do much better than much of the country when real estate appreciation is considered.

Unfortunately, because prices increased so much and so quickly, they had further to fall and the resulting impact was devastating for many. Recently, however, the rate of decrease has slowed significantly in our area, and this is despite the negative effect on home values caused by many short sales and bank owned foreclosures that have been dumped on the market.

Evidence of Improvement

The economists tend to look at real estate on a national level and one figure they give a lot of credence to as a meaningful indicator is the “Pending Home Sales Index”. Last month this rose 5.3% nationwide, which is a significant amount. More importantly, it rose in every region of the country.

Now note that this is an index that considers numbers of transactions, not total value of transactions.

You Can’t Expect To Buy At The Bottom

What can be inferred from these numbers is that buyers now believe that home prices are not likely to fall much further, so they have the confidence to write offers and buy homes. Of course there will always be some buyers who are planning to “buy at the bottom” but the only problem with that strategy is that you can only identify “The Bottom” after you have passed it and prices are on the increase.

Possible Improvements In The Market

It will surely soon be apparent to most buyers and sellers that prices are really so close to the bottom that it makes no difference and as buyers become more active, this will encourage more potential sellers to list their homes for sale. The likely effect is that there will continue to be a wide choice of homes to buy for the next few months but as we approach the Holiday season, many of the sellers who have not been successful in agreeing a sale will take their homes off the market. From Thanksgiving onward, it is quite possible that there will be a shortage of homes to buy. The wild card in this reasoning is that we don’t know how many people will be forced to sell their homes or have them foreclosed. These are not discretionary activities and a sudden increase of numbers of homes for sale will certainly keep prices down.

What Will The New Year Bring?

As we enter 2009, I foresee that there will be many buyers who are poised to take action. If the majority of those sellers who took their homes off the market in late 2008 decide to re-list them for sale in January, the balance between buyers and sellers should be at a reasonable equilibrium and we can expect to see stable home prices throughout the year. If, on the other hand, sellers do not take such immediate action, and there are more buyers than homes available (a situation I have seen on numerous occasions at the start of a year), home prices are likely to rise. This is simply the economics of supply and demand.

Note that my thoughts only relate directly to the affluent San Ramon Valley and Lamorinda here. In other areas, not too far distant, there will continue to be a glut of homes on the market for some time to come because the numbers are already so astronomical. In these areas prices will stay low and may even decline further with more foreclosures etc.