My take on current conditions

A client recently asked me about the current conditions of the local market and here is my response...

While you'll see plenty of growth in prices over the last year, a vast majority of that took place in the first six months. Activity was frantic after the New Year and is now very quiet - with some signs of a potential increase. Buyers are simply taking much more time to look and offer on homes right now. I think that many people believed in the media-hyped "real estate bubble" and decided that they'd wait it out to pick up the pieces at pennies on the dollar. Fortunately, they'll soon give up that idea and realize that the California market will see no such thing - and is in fact expecting a small amount of growth, especially in the luxury market of $1M+. Activity should begin its trek toward normalcy after the beginning of the year.

In the meantime, we're seeing many more homes on the market for a much longer period of time. Inventory is up significantly with 26 homes for sale in Bodega Bay alone (twice what we had at times this year) and time on market has increased to 110 days on average (up from about 90 earlier this year).

So, with all of this drab news there is hope. As I mentioned, activity is slated to improve and while prices have been flat to down slightly over the last 3-4 months, I'd expect slight gains for the next year. The best news is old news - the Coast is a solid investment when compared to other areas. We're not going to see significant decreases in prices and there's generally a greater number of people wanting to be here than there are available places to put them (supply/demand).