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About this blog: I am a native of Alameda County, grew up in Pleasanton and currently live in the house I grew up in that is more than 100 years old. I spent 39 years in the daily newspaper business and wrote a column for more than 25 years in add...  (More)

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Pleasanton housing market slows dramatically

Uploaded: Sep 15, 2022
If you think the real estate market locally has slowed, you’re right.
David Stark, the chief public affairs officer for the Bay East Association of Realtors, confirmed that to the Pleasanton Men’s Club at its Tuesday meeting.
Stark spoke about two major factors that have put a brake on what had been a red hot market since sales resumed after being halted during the early months of the pandemic lockdown.
The first is interest rates that have soared from around 3% for a 30-year fixed rate mortgage to more than 6% this week. The Federal Reserve is driving that as it has finally started to react to the soaring inflation rate by raising its base interest rate from zero. Given this week’s ugly inflation number, particularly at the wholesale level, the Fed may be even more aggressive than its back-to-back ¾% increases and raise the rate by a full point.
The state Realtors board put together a graph showing the impact on a $900,000 home with a 20% down payment. You can add 40% to $1.5 million for the average sale in Pleasanton. The monthly mortgage at 3% requires a monthly payment of $4,071 compared to $5,352 at 6%-- nearly $1,300 or about 30% more per month.
Looking at it from a purchasing power standpoint, Stark showed a graph with a household income of $196K, it drops from $1,083,000 to $824,000. Good luck at finding something in Pleasanton in that price range, even after the price reductions.
The second major factor is the drop in the stock market highlighted by the 1,200-plus point plunge on Tuesday. The market was flat Wednesday. For buyers in the Bay Area, who often hold stock options or other market-tied securities, their down payment nest egg just took a big hit.
The change has been very rapid, shifting in the last four months according to stats that Stark shared. It’s demonstrated in the median sales price in Pleasanton that fell from $2,050,000 in March to $1,575,000 in August. That coincides directly with aggressive Fed rate increases as inflation continued to rage out-of-control.
As you would expect, the bidding wars for homes have vanished and instead, for buyers who are motivated to act now, they’re patient and waiting for asking prices to be dropped and sellers who open to below-asking offers.
As a result, the time on market and the number of homes for sale have climbed significantly. The number of homes have climbed from less than 10 in December (typically a very slow month) to 78 in August, while average days have tripled from 7 to 25. Less than a month on the market still reflects strong demand despite the interest rates. Home sales have fallen from 100 in the spring to 56 in August.
Stark pointed out that home values soared during the pandemic driven by low supply and the desirability of single family homes on lots with backyards with good schools. The Tri-Valley’s location, equidistant between Silicon Valley, the Peninsula and San Francisco, also made it desirable for couples looking for where to raise their family.
Stark did not see any imminent crash in the real estate market given all of the reforms that followed the financial meltdown of 2008=2010. Most homeowners have fixed rate mortgages with the low interest rates that have been prevalent for several years. For those of us who are older, we will remember mortgage rates that were in double digits in the early 1980s as the Paul Volcker-led Fed fought to bring soaring inflation under control.
Heaven forbid we will see a return to that but President Biden and the Democrats in Washington continue to push for more government spending while inflation has gone from 2% to more than 8% on their less than 2-year watch. It’s an abysmal performance and one that even Democrat economists—think former treasury secretary Larry Summers—warned about when the Fed and the Biden Administration were labeling inflation as transitory and continuing to spend. What a horrible swing and miss.

Democracy.
What is it worth to you?

Comments

Posted by Rich Buckley, a resident of Livermore,
on Sep 15, 2022 at 10:14 am

Rich Buckley is a registered user.

The world as evidenced by the universe, is not a world of scarcity. It is a world and universe of abundance. It's our own frame of mind that holds us back from realizing our power and these truths.

Our Federal Reserve Debt Note Currency (Debt Currency - FRN's) have reached the end of its useful life. The Debt-Currency end of life is always marked by hyperinflation.

The private foreign owners of the Federal Reserve (Elites) try to divert attention away from the hyperinflation cycle by false-flagging and starting new wars. The US has experienced this currency crash cycle 4 times throughout our history. Each time, the Debt-Currency has been replaced with new precious metal backed currencies in order to rebuild citizen confidence which takes about 7 years on average. The Elite Mafiosos then worm their way back into our banking system.

This time will likely be different however, in that we will reject the Fed's attempt to apply the mark of the beast on our currency that requires a sufficient personal social score to spend your money. It's what the beast does no matter what it tells or promises you. You are treated as their commodity.... but it won't work any more. People are smart and waking up.

The rise of a new precious metals-precious resource backed US dollar (US$-Au probably called something like "The Patriot Dollar") as the old Federal Reserve Note debt dollar (FRN) disappears and is replaced. The end will happen quickly to these devils.

Our place in the world can be maintained as special and unique as we refocus our energies not on maintaining hegemony through war and threat of war but on redirecting our creative talents, working peacefully with all countries.

The greatest breakthrough will be the development of alternative energy and the positive use of scalar technologies. Greater public awareness of scalar energy science and development and deployment of creative good-positive uses not bad-negative uses, will lead to a golden age of abundance.


Posted by Willy, a resident of Old Towne,
on Sep 16, 2022 at 9:39 am

Willy is a registered user.

It would appear that we have a FED and Biden administration that have no idea of what they are doing!


Posted by Rick Edmunds, a resident of Danville,
on Sep 17, 2022 at 9:44 am

Rick Edmunds is a registered user.

"Our place in the world can be maintained as special and unique as we refocus our energies not on maintaining hegemony through war and threat of war but on redirecting our creative talents, working peacefully with all countries."

^ You are asking the impossible. Working peaceably and constructively with countries such as Russia, Iran, North Korea, The People's Republic of China and other rogue nations is a pipe dream.

Theodore Roosevelt's adage, "Walk quiet but carry a big stick" aptly applies to dealing with the global conditions and relationships of today.

The world is incapable of singing "in perfect harmony" despite what that ludicrous 1971 Coke commercial would like one to believe.

And besides, it was produced not out of global concerns and peace, but to sell and promote more Coca Cola.


Posted by Ennis, a resident of Pleasanton Valley,
on Sep 17, 2022 at 9:33 pm

Ennis is a registered user.

"President Biden and the Democrats in Washington continue to push for more government spending while inflation has gone from 2% to more than 8% on their less than 2-year watch"
Inflation... go look at the corporate profits of Chevron, Shell, and Exxon. Q1 and Q2 profitability has already greater than all of 2021 and 2021 wasn't a bad year for any of them. Then take a peek at oil prices in 2008 which peaked at $145 which, when adjusted for today's dollars, we were paying approximately $5.80 per gallon. Hmmm, oil is currently between $87 and $93, so why are gasoline prices still so high? We were paying state tax in 2008 and we were using summer blend (more expensive to produce) in 2008. Moan all you want but a significant portion of our current inflation is being driven by energy. Come on guys, it's capitalism at its finest, it's just that it's easier to blame Biden when we have oil companies gouging us at the pump and people insist on driving vehicles that get less than 20 mpg.


Posted by DublinMike, a resident of Dublin,
on Sep 19, 2022 at 10:19 pm

DublinMike is a registered user.

Mr. Buckley, to quote you "It is a world and universe of abundance." has proven to be butt backwards.

"Abundance" is a great concept but, at the end of the day, where does it go?


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