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Glen's San Francisco East Bay Numbers

Here’s a snapshot of the San Francisco East Bay Real Estate Market. I run these numbers monthly and have been tracking 38 cities since 2005. I primarily look at two indicators, Months Supply and Pending Over Active ratios.

Pending Over Active Ratio relates to buyers and sellers. Basic Econ 101, Supply and demand. Actives (represents sellers), or properties that are still available, versus Pending (represents buyers), or properties leaving the market. That relationship often indicates whether we’re in a “sellers or buyers” market. A ratio of 1 (an equal number of Actives and Pending) is considered a normal market or in a state of equilibrium. Anything under (high inventory, few buyers), prices are flat or dropping. Anything above (low inventory, many buyers) is considered a seller’s market. The trend since earlier this year indicates that we are in a “sellers” market in most cities. However, one factor that may be skewing the numbers is that there are longer escrows due to REOs and increased government loans.

Months Supply, Basically, months supply is the ratio of inventory to sales. What it tells us is how many months the stock of homes for sale would last, if sales continued at their current rate. Six months supply is considered normal or equilibrium. We are currently at a two month supply of houses for sale for the entire 38 cities that I track. Many cities are now below that level with a few even below 30 days. This is also an indicator that we are in a “sellers” market in most cities.

DOM, (Days On Market), continue to decrease in most areas. Houses are going into escrow quicker. However, once in escrow, they are taking longer to close.

Also, the relationship between what, on average, homes are selling for to list price support this. We’re seeing properties in many areas getting multiple offers and actually now, on average, selling at or above the average list price. The spreadsheet takes into account sales by city during the last 4 months.

Areas that were hit hardest last year due to high inventories and downward pressure on prices due to the high number of distressed properties on the market, are now starting to see some recovery, especially in the lower priced areas. Examples would be in East Contra Costa along highway 4, (Pittsburg, Antioch, Brentwood, even Concord). More recently, in West Contra Costa in the San Pablo, Richmond, Pinole, Hercules areas).

Finally, we are starting to see a slight increase in foreclosed properties coming onto the market. 17% of active listings are foreclosed properties (REOs), as compared to 14% last month.

See attached spreadsheet HERE:
Glen's Numbers 10.31.090001.pdf

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