The #1 point of misunderstanding by home sellers today is – no one living today has ever seen a real estate market like the current one.

Don’t blame the Realtor, blame the human mind. Our mind likes to associate what is happening today with the past. When we hear “down market,” foreclosures, and short sales – we tend to think back to the last down market cycle to try and understand what is happening today.

BUT – this ain’t your blast from the past down market. This is a whole different animal and sellers wanting to maximize their net need to understand this.

What’s different?

We have a real estate industry, a lending industry and a national economy being hammered from all sides simultaneously while most homeowners are looking at the whole situation through a lens distorted by past down markets that did not include as many issues of volatility.

More and more we, and our industry peers, are encountering home sellers that think they can apply the old rules to a real estate market never seen before.

The Internet is a huge factor that few are factoring into the equation properly.

90% of today’s home buyers begin their search for real estate on the Internet. Too many are confusing information with knowledge.

Link this up with the current need in our society for instant gratification and you get this very interesting dynamic that is now running amok through the real estate industry – too many sellers are moving too slow.

This market is continuing to slip away from sellers – and this is not just a pricing issue. It’s about available financing, buyer’s not being willing to negotiate and inexperienced real estate agents not being able to hammer home the current situation to their clients.

Time is the Sellers Enemy

In past down markets, before the Internet, sellers had time. It took time to get a property advertised and the marketing in place. It took time for the word to get around in the Realtor network. It took time to get properties on the MLS – and the MLS was not available via the Internet – it was paper!

What’s the Impact of this on sellers?

The seller’s window of opportunity has drastically shrunk. It now takes about two weeks maximum to go through the entire pool of available buyers in an area. We are seeing the effects of this time and again in this market – sellers turning down offers thinking that more buyers will show up.

After two weeks on the market, the only buyers that are going to show up are:

• buyers just entering the market
• buyers coming back because of a significant price reduction

Sellers – please get this point!!! – with the MLS available via the Internet, with Craigslist and other online ad sites, and with instantaneous agent communication via email, text messaging, cell phone connectivity and instant messaging, almost everyone knows about a listing within days. Sellers don’t have the luxury of a six-week steady stream of interest. Sellers have days or a couple of weeks at most to get their home sold for top dollar in this market.

Top dollar in this market is about selling it today, not tomorrow.

Every Friday we update our MLS Trends chart for 5 of the local communities along the I-680 corridor: Danville, Dublin, Pleasanton, San Ramon and Walnut Creek, CA.

I decided to write about the trends chart because Dublin, CA continues to standout from the other four communities this year.

The two lines of most interest in the graphs are the blue (Active Listings) and the green (Pending Sales). The narrower the gap between the two, the less Days on Market. It's one way to look at how active the market is.

Look at Danville. The active listings low point on the Danville graph represents 1/14/08. If you scan the other four communities, you see this coincides with their low points. This is a normal historical trend. The low point is usually in the first two weeks of January after the holidays.

What we see on the chart for Danville is fairly typical for the Bay Area, active listing inventory begins to climb as pending sales also begin to inch up. BUT, hold the phone! What's happening in Dublin?

Dublin, California sees it's active listings pretty much flat-lining or is a slight decline. And look at the pending sales in Dublin since the beginning of the year. They're taking off much more than than the surrounding communities.

San Ramon is the only community coming close to reflecting the trend in Dublin. What's up with this?

How do you spell - New Home Builders in Difficult Times? San Ramon and Dublin especially have more new home construction than the other communities. The greater percentage of new home construction, the more downward price pressure due to builders slashing prices and offering incentives.

Also, the foreclosure rates are probably higher because more new homes and condos were sold in these areas from 2000 to 2005 - adding to the downward price pressure.

It appears that sellers in Dublin are holding on to their homes more than the other communities.

Last year what we would see is active listings bottoming out in the first two weeks of January and then a steep increase. Pending sales rose a bit into April, then flattened and began to fall through the remainder of 2007 - subprime meltdown mess.

So what do these charts tell us if you are a buyer? San Ramon and Dublin have quickest turnover of property in general. Sellers in Danville, Pleasanton, and Walnut Creek haven't seen as much downward price pressure, so sellers in those communities are probably hanging tougher on prices that may still need to come down a bit given that the number of buyers is not increasing at a rate to cause a significant increase in sales activity.

Buyers can find deals in all of these communities, but you may want to check out Dublin first and San Ramon second if price discount is the major factor. This is probably more significant for first time buyers or condo owners that are considering a move up to a detached single family home.

My prediction is that we are going to see more downward pressure in Dublin and San Ramon as home builders attempt to deal with the effects of rising fuel prices.  

Whatever the case, it is Dublin, CA that piques my interest these last few Friday mornings as I begin the process of gathering the MLS data, 

Here are the Months of Inventory as of June 5, 2008 for communities in Contra Costa County.  They are down a fraction from 5.30 months in May to 5.11 months in June.  This may be a sign that the loal real estate markets are stabilizing. 

Many sellers may be holding off on placing their homes on the market until their local real estate market shows more favorable signs of improving.  This could be one of the main reasons we don't see an excess of housing inventory for sale.  A high percentage of the sales are foreclosures and short sales, especially in the east county. 

First time buyers and investors are finding bargains compared to where prices were two years ago.  We will be dealing and hearing about foreclosures in the media for some time to come.  The continued higher lending standards are also having an affect on the market. 

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Follow the MLS Trends 

The Dublin, CA real estate market continues to heat up more than the surrounding communities. Dublin has a lot of condo inventory and new home inventory that developers and builders are motivated to discount. Is this continued pressure on home values along with the rising foreclosure rate affecting the resale market? It must be one of major factors in the rising activity in the Dublin market.

The blue line indicates Active Listings and the green line Pending Sales according to the local MLS. Dublin CA is the only community in the TriValley area where we see this continued trend of the gap closing. The closer the lines get, the more the local market moves toward a buyer's market. You can see some of the other MLS trends here.

San Ramon, CA is the only other market where we see continued significant improvement in this gap. The rise in active real estate listings in surrounding communities continues to out pace the rise in pending sales.

RealtyTrac is showing 151 properties in Pre-Foreclosure, 44 homes at Auction and 92 real estate owned properties (bank owned).

It's a great time to buy Dublin CA real estate. There are many great deals on the market. If you are interested in  new home construction contact Tracey (925) 984-1890. She has over 8 years of new home sales experience working for Standard Pacific Homes as a sales manager. She knows how to get you the best bang for your buck in new home sales. 

If you are interested in foreclosures, bank owned, or distressed properties contact Craig (925) 984-4910, our specialist in that area. 

Checking this week’s MLS stats, we see continuing improvement in the Dublin and San Ramon real estate markets. Take a look at the charts.

The San Ramon CA real estate market is actually looking quite sane when you compare it to last year’s where bloated inventory and falling sales were the norm. If the trend continues, San Ramon could wind up being one of the best, in terms of transaction activity, local real estate markets this year. Keep in mind, that this activity is, in part, being driven by the housing price correction of the past two years. There are some great deals available in San Ramon today.

The Dublin CA real estate market continues to improve, but the continued worry in Dublin is the pressure from new home builders. Discounts and incentives from new home builders are putting pricing pressures on re-sale owners. An example is a builder who has a new unit priced about $100K under the exact same units on the market that were purchased 2 years ago. The news isn’t good for homeowners when builders do this. Homewoners wanting to sell now have to take a price beating and homeowners wanting to sell next year will still be feeling the effects of those discounted prices as they will set the new comp levels for market analysis.

And look at Pleasanton & Danville, notice the climbing inventories (reaching last summer highs) and and falling sales. There will be some hardball negotiating happening in Danville & Pleasanton CA this summer.

Keep a close eye on these markets with ourLocal Market Detail Reports which are updated weekly and break data down by zip code and pricing point.