Pleasanton Market Update - Sluggish November is a Turkey

Bloated. Sluggish. Slow moving. Weighed Down. Lethargic. No, I’m not talking about how I felt after consuming 22,000 calories on Thanksgiving (who invented yams with marshmallows on them anyway? That’s just not fair!). I’m talking instead about the Pleasanton real estate market, which limped through the month of November as if in a deep sleep. It seems the October melt down on Wall Street had an impact on the Pleasanton market, with sales down sharply for the month. There were 19 pending sales of single family homes for all of Pleasanton, down from 30 in October and 55 in September. Yes, the Thanksgiving holiday certainly had some impact, but historically November has been a fairly strong month. Inventory of available single family homes at the end of November was at 218, down from 231 at the end of October. Bargain hunters are definitely out in force, both in the retail shopping arena as well as the real estate market. The good news is that mortgage rates enjoyed a sharp decline as well, and are now near historic lows. Again, the combination of extremely low interest rates and bargain prices for homes in prime neighborhoods makes this an extraordinary time to buy. (click on graph to enlarge)

The under $1,000,000 market saw the sharpest decline in sales, with 12 pending sales for the month of November, as compared to 21 in October and 37 in September. This is somewhat surprising, as conventional logic would suggest that homes over $1 million would have seen the biggest slowdown in activity because of the volatile lending environment. Inventory dropped slightly, with 113 homes under $1 million on the market at the end of November, as compared to 122 at the end of October. (click on graph to enlarge)

The $1,000,000 to $2,000,000 market was relatively steady in November, with 7 pending sales, which matches the October sales level, although it is down from 15 in September. Inventory declined from 78 single family homes on the market at the end of October to 71 at the end of November. Clearly it is value that drove the activity in this price bracket, with buyers jumping on attractive, well priced homes that might have seen 3 to 5 offers in normal market conditions. (click on graph to enlarge)

The luxury home segment over $2 million saw no pending sales in November after registering 2 pending sales in October, and 3 in September. Inventory in this segment increased from 31 at the end of October to 34 at the end of November. Certainly the stock market melt down impacted net worth in this bracket, and perhaps made buyers a bit more cautious. (click to enlarge)

Meanwhile, the Fed is taking action to try to stimulate the economy. Their recent purchase of $500 Billion in mortgage backed securities, along with their hints that yet another interest rate cut might be on the horizon, will definitely have an effect at some point (hopefully soon). The experts are pointing at a recovery starting in the second half of 2009, which if true (one can only hope) means we are closer to the bottom of the market than most people realize. It might be time to act on that house in the neighborhood you always wanted!

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