I’m excitedly watching as real estate’s selling season starts. Typically most sales are made from March - October and it will be interesting to see how the new season progresses. I will say, with cautious optimism, that we are seeing evidence in some markets that he bottom has been hit. What does that mean? Well, first we need to see sales volume, which plummeted in 2008, start increasing. Once balance is struck between incoming inventory and properties being sold (absorption rate which is current inventory divided by # of sales in previous month) and we see inventory of 3 months or less then we will start to see pressure on prices and the return of appreciation. In no way do I mean the “fake” appreciation we saw from 2004 - 2007 but slow, consistent appreciation.

Sales of distressed properties in the Bay Area have been the main source of the volume increase we are currently seeing.

In Marin, the $500,000 and under sector of the market is showing signs of stabilization. There are currently 176 active listings. 35 sold in February. 176/35 = 5 months inventory.

In the $500,000 to $999,999 market there are 395 active listings and 41 sold in February = 9.6 months inventory.

In the $1,000,000 to $1,999,999 market there are 260 actives and 10 sold in February = 26 months of inventory.

In the $2,000,000 and up market there are 165 listings and 2 sold in February = 82 months inventory.

Clearly, the only price range of properties moving closer to stabilization is the market under $500,000.

In the Bay Area where most of the home sales are financed with jumbo loans we have been hit hard by the lack of availability of jumbo loans. Is the high-end stagnant due to overpriced homes and/or the lack of jumbo loan availability? Hopefully, that will be answered as lenders move back into the jumbo loan market. Bank of America appears poised to start jumbo lending again.

All in all there are positive signs in the market that have not been present for well over a year. Let’s hope for more of them.