So few homes are listed for sale that agents are resurrecting old ways of drumming up business – going door to door, leaving cards and flyers and writing personal letters, asking owners if they’re interested in selling. Social networking and e-mail blasts are being used to increase inventory as well.

“People are going old-school, farming their territory,” said Lynda DiVito, an agent with Redfin in the East Bay, using real estate agent slang for canvassing neighborhoods.

While tight inventory is a national trend, it’s especially pronounced in the Bay Area.

Alameda County, for instance, had 949 homes for sale in February, down 64 percent from the 2,617 on the market at the same time last year, according to data from Realtor.com, the listings website of the National Association of Realtors. Contra Costa County had 899, down 58 percent from 2,152 in February 2012.

“Those are striking reductions in inventory,” said Errol Samuelson, president of Realtor.com.

While inventory numbers did tick up slightly from January to February, that was a normal seasonal change, not an indication of the logjam loosening.

“After seasonal adjustments, inventory is still falling; the underlying trend is still downward,” said Jed Kolko, chief economist with real estate site Trulia.com.

However, he thinks the rate of decline is slowing.

“Inventory tends to fall the most sharply after prices bottom, as no one wants to sell at the bottom, they just want to buy,” he said. Trulia shows that Bay Area prices bottomed more than a year ago.

Price a factor

Sellers remain reluctant and elusive for several reasons. Those who are still underwater – owing more than their house is worth – have the obvious impediment of not wanting to do a short sale.

But many others “feel underwater based on the price they paid,” Samuelson said. That is, someone who paid $700,000 for a home in 2007 won’t feel good about selling it for $625,000 right now, even though the sale would cover their remaining mortgage.

Some potential sellers, seeing prices surge, are hoping to hold out for more. Others who might want to move up to a bigger house fear that the market frenzy means they won’t be able to find or afford anything else.

Now that it’s spring, the busiest real estate season, more homes should start hitting the market. But many agents have been taking matters into their own hands, making pitches directly to potential sellers about why it’s time to get off the fence.

Although there are numerous online sites to track homes for sale, “the way the market is set up now is forcing us to go back to the beginning where (agents) walk up to a door and knock and say, ‘Hi, how are you, my name is … ‘ ” said Adelaida Mejia, a Realtor with Vanguard Property in San Francisco.

Personal touch

She recently worked with a client seeking a home in San Francisco’s Clarendon Heights neighborhood, above Cole Valley. After losing out with bids, she walked the neighborhood with him and identified houses he particularly liked. Mejia looked up the homeowners and wrote personal letters to each, explaining that her client loved the area and was seeking a house there.

“Three weeks later, one person called me back and said ‘We loved your letter, we’d love to talk even though we’re not on the market, come on over,’ ” she said.

Rich and Renee Gimigliano, the homeowners, said they received two or three agent solicitations a week after unsuccessfully trying to sell the house last year, but ignored them because they were form letters.

“Adelaida’s note was different; more personalized,” Rich Gimigliano said. “We were planning to put the house on the market again, but the note just pre-empted that.”

Her client ended up visiting the house, making an all-cash offer and buying it. “It was a really stress-free experience for both” the buyer and seller, she said.

Beating the bushes for sellers is an about-face from just 18 months ago, when the challenge was to find people who wanted to buy.

A corresponding trend is that homes are selling very quickly.

‘Unbelievable’

“The median days on market in Contra Costa is 13 days – that’s unbelievable,” Samuelson said. A year ago it was 33 days.

Redfin has identified another trend it calls “flash sales” – homes that sell within 24 hours of being listed, usually because a buyer swoops in with an offer too good to refuse. Often, those are buyers who have lost other bidding wars and are determined to land a property.

In the past six months, almost 1,000 Bay Area properties went under contract within one day, Redfin said.

“I just had that experience at a house in the Oakland hills,” DiVito said. “I held the brokers’ tour just before putting it on the market. A buyer and agent walked in and offered us our list price in cash on the spot.”

Underscoring how much the market has changed, she said her sellers had tried to sell the house a year ago “and could not move this property, even though they lowered the price three times.”

Same-day offer

The sellers, who were buying a new home and needed to sell quickly, were happy to take the same-day offer since a cash deal meant it couldn’t be derailed by problems with financing or appraisals.

“Flash-sale terms tend to be really good because (buyers) really want to lock down that property quickly,” DiVito said. “They’re more willing to meet the sellers’ needs to scoop it up before anyone else gets it.”

What happens next with inventory is a big question hanging over the real estate recovery.

“My best guess is that you’ll see an orderly return of inventory to the market,” Samuelson said. “I don’t expect that you’ll see the floodgates open and torrents of properties hit the market. But for each percentage point increase in price, there will be some people who for life reasons have wanted to sell for the past five years – their kids moved out, they got divorced – and now feel that the time is right and they have enough equity.”

Tight inventory, fast sales

The number of homes for sale in the six largest Bay Area counties has dropped dramatically compared with a year ago, according to data from the Multiple Listing Service. Correspondingly, the time the homes stay on the market has also dropped.

Source: Realtor.com

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com Twitter: @csaid

Article source: http://www.sfgate.com/realestate/article/Homes-sell-faster-than-ever-in-Bay-Area-4375058.php

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The Silicon Valley is now leading the nation in its long-awaited housing recovery, according to veteran Bay Area realtors.

Suzanne Yost, President of the Silicon Valley Association of Realtors summarizes, “We’re at that leading edge.”

Many cities, in fact, are showing double-digit gains in year over year sales prices. In San Jose, the median cost of a single family home is now $582,000, up 22 percent over November of last year. And in Palo Alto, which boasts some of the region’s best performing schools, high demand has pushed the median sales price of a home to $1,684,000.

What surprises buyers, sellers, and even seasoned realtors in parts of the Bay Area, is the number of homes receiving multiple offers that are non-contingent and all-cash.

Certainly, the initial public stock offerings of such Silicon Valley luminaries as LinkedIn, Facebook and Groupon have helped spur the region’s resurgence in housing. But there’s another increasingly significant group of buyers who are fueling the frenzy. Numerous agents reference the impact of Chinese investors, both foreign nationals and immigrants. “Just in the last year, we’ve seen a doubling of buyers coming directly from China and they’re pretty much all-cash buyers, usually here for just one week,” says Ken DeLeon, broker and founder of Palo Alto’s DeLeon Realty.

Nationally, Canada remains the largest group of foreign investors in U.S. real estate. But there is ample anecdotal evidence to suggest that the Silicon Valley is bucking the national trend. “Amazingly, within Palo Alto, with its great schools,” DeLeon postulates, “70 percent of the buyers are now Chinese, either American born Chinese, or coming directly from China. It’s staggering!”

The Silicon Valley Association of Realtors (SILVAR) recently formed a Global Business Council to help its members respond to the growing interest from foreigners, most notably from Asian investors. A delegation of 10 Chinese government officials recently met with the association to learn about real estate ownership, development and taxes in the golden state. “It was evident from the meeting that our world is more global than ever, and so is the business of real estate,” council chairwoman Jennifer Tasto said.

Meanwhile, high demand combined with low inventory have spawned a robust market in the Silicon Valley. Agents Anina Van Alstine and Sharon Witte recently sent out 32 disclosure packages for a home they co-listed within walking distance of Stanford University. Even during the Thanksgiving holiday when the business of buying and selling homes usually slows, the highly desirable location drew a remarkable 15 offers. Priced at $1,695,000, the final sales price was $2,230,000 – 32 percent above the original asking price. Van Alstine added, “More than 30 percent of the offers were all-cash and the one that got accepted closed in seven days from acceptance.”

Other, similar stories abound. Tasto recalls receiving 38 offers on a Palo Alto green acres rancher. Listed for sale at $1,195,000, half of the offers, she says, came in above $1.5 million. It sold for $1,650,000.

Michael Repka, who brings his legal and tax expertise to the DeLeon Asian Operations team remarks, “It’s absolutely remarkable. It’s the most frenzied, excited market that I’ve come across in the last 10 years.” But Van Alstine and Witte are careful not to focus too squarely on the Asian investor. They write, “As agents who represents many high end properties we can tell you that there are people from all over the world moving to the Bay Area as well as local residents, who have plenty of resources to engage in the bidding wars that are so prevalent now. The amazing prosperity generated by businesses centered in Silicon Valley has generated unprecedented amounts of cash and buyers from all backgrounds are willing to invest what it takes to live where they choose.”

All of the realtors and agents with whom I spoke while researching this story emphasized the importance of education and high quality schools for buyers. Julie Tsai Law, who had just returned from client meetings in Hong Kong, Taiwan, and China, said the major reason her buyers develop such a strong attraction to Palo Alto is “for the school districts here. From elementary to high school to even the universities.”

Their keen interest and personal holdings are such that Law says, “They wire the money overnight, and they close the deal within five days.” Van Alstine echoed a similar view. “We could tell from remarks made at our open houses, that people making offers imagined a K-Stanford education for their children.”

The Fair Housing Act prevents us from keeping tabs on race and ethnicity in real estate transactions. As a result, precise data is unavailable from the California Association of Realtors and likewise, SILVAR, on the percentage of recent home sales tied to Chinese investors, either foreign-born or resident Chinese. Other developments, however, confirm the rising tide of interest from The People’s Republic. DeLeon recently launched an Asian Operations unit with more than a quarter of a million dollar marketing budget targeted toward mandarin speaking investors. “There’s such an interest in purchasing houses by the Asian community, we wanted to structure something that was most convenient for them and also to help us market our homes” explained Repka, chief counsel for DeLeon Realty.

Other Bay Area real estate firms are in the process of setting up offices in China, as well. RE/MAX reports that 25 percent of the visitors to their year-old global website, www.global.remax.com, come from China.

Following her recent meetings with the delegation from China, SILVAR president Suzanne Yost elaborated, “I think they feel it might be time to get their money out of China.” That’s a sentiment echoed by Repka who explained that citizens are not allowed to own the land they purchase in China; they buy their homes on long-term leases, and many investors fear that the Chinese housing market may have peaked. Additionally, the People’s Republic of China restricts the purchase of second homes so there is only so much real estate an investor can buy. All the more reason, realtors summarize, that homes from San Jose to San Francisco and parts in between are getting swamped with offers of all-cash and a quick close, oftentimes from foreign investors.

Realtors agree that it’s a great time to be a seller, but it can be a really tough market for buyers.

Article source: http://www.nbcbayarea.com/news/local/Chinese-Capitalists-Help-Fuel-Housing-Rebound--184185391.html