The Latest on the Lafayette Market

• The latest market statistics were published yesterday, painting a picture that is certainly much less dismal most of the country, including over-built areas of California. Nevertheless, the tide has changed, particularly in the upper end of our market. As with any set of statistical data, the more data points, the more information one can extract from it. With that said, the data on the overall Lafayette market contains sufficient data points to see real, statistically valid trends.
  
  Some quick summary points on the overall Lafayette Market:
  
• Inventory levels are holding steady from September into October.
  Pending sales – the market’s leading edge indicator – are down from September. They have significantly dropped as a percentage of total inventory on a year-over-year basis from Sept and Oct of 2006.
  
• The average price per sq. ft. data can be deceptive if there is a small home on a large, valuable piece of land that sells in a given month. It will skew the data significantly. However, looking at the trend for the last 3 months vs. the same time last year, it appears that prices are off about 10 percent on a year-over-year basis for the late summer/fall market.
  
• The days on market data is deceptive because agents have historically taken listings and brought them out as “new” every month or so. This practice was banned by the MLS about 4 months ago. The current data for the last couple of months is probably reliable… anything prior to that would not be. This is also true for data relating to sold vs. list price. Since sales occurred often times after multiple price reductions AND bringing the property out as “new” each time (now banned), this data is only reliable for the last month or so.
  
• The homes that are selling are those that are below the market average price points. In other words, the sales are occurring in Lafayette’s low end of the market.
  The # of months of inventory improved from September, and is in alignment with 2006 levels at this point in the year.
  
  Summary points on the Lafayette Market $2M - $3M range:
  
• Lafayette’s upper end market remains anemic. One property was pending and then closed in this price range, and it was a Hidden Oaks (new construction) property that had been in escrow since about May.
  
• Year-over-year prices appear to be down, but the data is a bit too “thin” to draw significant conclusions. My previous comments about Av Days on Market and Sold vs List Price apply here, as well. In general, the homes that are selling in this range are at the lower end of the $2M – 3M price spectrum.
  
• The number of months of inventory in this price range is up sharply from last year.

There is no question that we’re in a market funk. In frequent conversations with other successful agents, there appears to be a significant number of buyers with “cash on the sidelines”. How long it lasts is anyone’s guess. We can’t change the market, but we can make sure that your home remains well positioned once buyers venture in and make purchases. That is our primary objective at present, as well as keeping you well-informed and providing counsel based upon facts, not speculation. We’re starting to hear about more relocation clients entering the market, but many can’t buy until they sell their homes in other parts of the country. Unlike prior years, many corporations are not offering their relocating execs buy-outs on their homes because they fear being stuck with over-valued assets on their books. Instead, most are now insisting that the home be sold by the relocating employee as part of their move. Once sold, the company reimburses their expense of sale.