As you might imagine the general real estate market depends upon where the marketplace is located. Unfortunately, news is generally national, statewide or at minimum regional in nature and such geographic areas cannot adequately address the condition of any real estate market. Statistics do not count, neither does regional real estate results. If Contra Costa County home prices (average prices of sold properties) are down 30 plus percent, does that tell us anything? No, the prices are down by about 50% in east county (Antioch, Oakley, and Brentwood) and are basically level in Orinda, Lafayette and Moraga. Is there much similarity between the real estate in Orinda with the real estate in Richmond? No, and the two cities are only 15 minutes apart by car ride. There is a difference in Orinda, between Oak Springs off Brookwood and Barbara Rd and the Orinda Downs, etc. etc. etc. So the old "Location, location, location" by-line really is true.
Some factors in the market have a general effect. Factors such as interest rates, the general economy, etc. These factors will tend to impact the number of buyers entering into the marketplace to purchase. Overall market conditions can impact general market results, not unlike we are seeing currently. But we see certain areas and segments of the market that appear to be performing better than others. For example, the higher end market in Lamorinda, 2 Million and above, has performed reasonably well compared to other price ranges. The general economic factors have slowed the rate of purchasing overall, but certain areas and price ranges are still doing reasonably well.
Agents that have been around awhile remember poor and normal markets in the real estate world. The real estate market, particularly in Lamorinda, was hyper strong for over 10 years. This environment was seen as "normal" for agents entering the business in 1996 and beyond. This was a market where everything sold, even homes in poor condition, poor location, and with inherent problems. Moreover, these homes sold without much price penalty for being in their location or condition. Now, the true "normal" market is a market where buyers are paricular, good real estate, as long as it is not mis priced, sells; and poor real estate struggles to sell and will not sell unless there is a fairly significant discount. In 2005 a house on Moraga Way might sell for pretty much the same price as a similar house on Ivy Drive. Today, that house on Moraga Way will need to be discounted by 20% over the same type in a better location in order for it to sell. This is what happens under normal conditions. Our last "bad" market was in 1990. Not too many agents have been in the business for 18 years.
Many see the current market and say, "there sure are alot of homes on the market". Currently there are about 210 properties on the market in Lamorinda. During the "hot markets" we experienced, the inventory never got above 200 units, thus the imbalance between the supply and demand. But I remind people that in 1995, which was by all rights a Normal market, the inventory in Lamorinda was very close to 400 units. There is still not an abundance of available properties in Moraga, Orinda and Lafayette. Additionally, there is not alot of good real estate on the market in our current markeplace of 210 units. There are buyers out there, they simply are not in a hurry and are back to acting the way buyers naturally act, slow and cautious.