Market Update:

A great deal of homes have gone into contract in the last few weeks in the $800k - $1.25m range. Buyers have come to the market for homes in areas with good public schools (i.e. not Sausalito). Currently 31% of the homes in that price range in Mill Valley are in contract-- which represents a healthy market. More expensive homes sales are still very slow and inventory is starting the pile up. My guess is that this market segment will be the next price range to 'pop' so if you are looking at homes in this price range I would try to stay ahead of the curve as the first few homes to move at the beginning of this cycle will typically recieve the greatest discounts.

We will likely see interest rates hover around these levels for several months, or until the employment data improves and then commence a long gradual climb back up to the 10% range.

Homes are trading at a 10-20% discount to what I believe is “fair Value” (please see Home Valuator Link at top left), and any further gains in affordability due to price drops will be consumed by increased borrowing costs.  

My advice for serious home buyers: buy now, buy conservatively, and don’t stretch; and keep 12 months cash-crunch, emergency fund reserves. Please see my most recent blog entry for more info and call Dave 415-867-6611.