Make sure you check what percentage of resales are short sales and also know the "shadow" inventory count.

For example, in San Ramon (as of this post), there are only 26 resale Single Family Residences in the $550K - $850K range, which seems like a relatively low inventory:

http://tinyurl.com/yh2tu8l

However, if you look closely at those listings, the majority are short sales (listed below their original sales price). Further investigation indicates that there are 88 (yes, eighty eight) Single Family Residences in the $550K - $850K range that are in some phase of foreclosure:

http://tinyurl.com/y8vonto

So the existing inventory is "distressed" and there is a sizable shadow inventory of foreclosures that have not yet made it onto the market. Both are indicators of potential downward pressure on prices.

MD - most of sold prices at dublin ranch golf club have dropped about 34% from 2005 level, read here, http://myrealinsight.com/2009/10/price-drops-at-dublin-ranch… and recently I have seen some homes with golf views listing for 699k as short sale, so is it the bottom? Nobody knows but it's close and that's why there are many offers for any listed in dublin ranch. You as a buyer have to be ready to buy, know your budget and location. Good luck and feel free to contact me for more info.

Kent Hu - kent@MyRealInsight.com

I was on this site around august of last year and I was given the same "story" by the RE agents on this site about how housing has bottomed and this is the best time to buy. Prices are lower by 100K today compared to aug of 2008

I believe dublin/san ramon have another 20% to go. 700-800K is still a lot of money and without "creative" financing not a lot of people can afford it.

Tech salaries in the bay area are not increasing nor they are payed a premium compared to the rest of the nation.

I am in Tracy and some day I plan on moving to the trivalley. If you ask any RE agent in tracy-the ans is that market is red hot! and if you peel the layers you will know that most buyers are investors who are renting the homes out. Untill the cycle of overpriced homes are sold and bought at a lower price is complete, the trend is downward. Why would someone pay mort. on a 1.5M home when they same sold for 900K-you get the picture.

The mutiple bidding is artifical to say the least-banks are holding properties. IMHO I will wait til 2011 unles inflation goes over the roof

The Tri Valley area is continuing to see significant downward pressure on pricing, so be careful reading to much into the summer blip (and do ignore the realtor hype). Families with kids in school have a very tight window to get through the home buying process, so you will always see a relative increase in volume during June and July. To close and move before school starts (usually the day after Labor Day), most folks will have to buy sometime this weekend or next week. After that, you'll likely see a significant drop off in demand and corresponding up tick in supply. Take a look at the list to sales graph and you'll see down down down, followed by the summer blip upward...looks seasonal to me. Seasonal variance aside, here some other key factors which will likely create continued downward price pressure in the greater Dublin market:

1. High End Market Inflation. The number of folks who grossly overpaid for McMansions in places like Windemere and Dublin Ranch is staggering. Even folks who are still employed are choosing to walk away from these homes, because they are too far underwater to refinance and it simply doesn't make sense to continue paying on a $1.5M mortgage for a home that is now worth only $850K. Here's that exact example:
http://www.redfin.com/CA/Dublin/5500-Eaglebrook-Ter-94568/ho…

2. Exotic Loans in the High End Market. At the peak of the market (~ 2006), a huge number of folks in the higher end market used 3 year adjustable rate, exotic mortgages (ALT-A, Option ARMs, etc.) to get into homes they otherwise could not afford. The option ARM gave them the "option" to pay little or nothing each month for the first three years; however, at the end of the 3rd year the loan payment resets to a fully amortized 27 year mortgage. GIven how fast home values were appreciating, folks figured they'd could pay little to nothing for the first three years and then flip the house for a big profit before they actually had to make real payments (which they couldn't otherwise afford). Instead, they are now stuck with million dollar mortgages on homes worth half of what they owe. Since these types of loans (Super Jumbos) are not eligible for loan modification, I'd bet that most of these folks will just walk away and allow foreclosure when their option ARMS reset in late 2009.

3. Migration from the East Bay back to the South Bay and Peninsula. From 2003 thru 2006, the main reason for the Tri Valley growth was that folks could not afford to live in the South Bay and Peninsula, even though their jobs were located there. With BART going out to Dublin and the M Line going from Castro Valley, many folks bit the bullet and moved out East, commuting back to the Peninsual and South Bay for work. With the collapse of the bubble, real estate in the South Bay (and even now on the Peninsula) has come down significantly and large numbers of folks who moved out to the ex-burbs are moving back, closer to their jobs. This exodus of buyers will likely further depress demand in the Tri Valley area.

4. New builds. In the East Bay, you have vast areas of land that have already been permited for large builds. Although Windemere is mostly build out, the Dublin Ranch areas still has over 4000 housing units that can be built at any time. Check out Salerno, Cantara, Mesa Point, Shadow Canyon, Seven Hills, etc. Once these builders ratchet up the pace of construction, the flood of new homes will likely further undermine the re-sale value of existing homes.

No trying to be a fear monger, but just wanted to add some balance to the used car salesmenesque, "it's always a good time to buy" drivel you hear from the realtors.

Good luck in your search.

The real estate market peaked in the end of 2006 into 2007. So, expect some new foreclosures to hit at the beginning next year as there will be a lot of Option ARM and Alt-A that is going to reset. Yes, people can refinance into new ARMs or 30-years, but not if they are upside-down on the mortgage, which most (if not all) home buyers from that time are. Plus, the total number of unemployed people is increasing every month. Yes, the number of new unemployed people might be decreasing each month. But that doesn't mean the total doesn't increase.

My friends "won" the bidding on a short sale a few months back, and was ready to close and finalize the loan. But the loan appraisal came back about 40K short. They were also in the 700K range.
Now they're kinda stuck trying to renegotiate with the bank and seller...because they really don't want to eat the 40K difference (I mean you can really like a house and they have enough down pmt to eat it, but 40K is a lot of money!)
That being said, I would guess that many buyers that bidded and "won" may have issues with appraisals later on? I don't think it's bottom yet for Dublin because my friends appraisal was based on recent sale AND recent listings were more in line with the appraisal (and still falling). His plan B is to let this purchase go and put in new offers for the recent listings if he needs to.

MD

I don't know that you would call this another case of irrational exuberance since many of the homes for sale are way below what they sold for initially. Many are either bank-owned or short sales. The reason why there are multiple offers is because these buyers and their agents may have recognized that the prices are so much more reasonable today for what they are getting.

One of my clients had paid nearly $800K for her place, but they are now down to the $400ks. In the current market, that's what it's worth. I truly don't see it going down to much less than that.

Recent statistics say that we may be recovering, judging from the number of sales that are taking place. The price levels haven't returned to where they were before, and the inventory is moving. And when inventory levels are low, the prices are low, and the demand is high, that could lead to an uptick in prices.

The next wave of foreclosures will spawn another wave of buyers looking for the best deals. So in a way it's a buyer's market because the prices are lower than they were just a few years ago. But on the other hand, there are more buyers competing for the same properties. It's happening everywhere, in other cities, in other states.

So be fleet of foot....when you find a home you like, get serious when writing an offer. Be aggressive with both the price and the terms. Believe it when we tell you to expect a multiple-offer situation.

Let me know if you need additional information or assistance.

Good luck!
Pacita

As a Realtor who sells a lot of homes in Dublin Ranch you need to get info on homes before they hit the market. Here is a link to some information on Dublin Ranch too. http://video.google.com/videoplay?docid=2660840261015089688
I dont imagine a new wave of foreclosures coming on the market will be the only help to the number of people bidding on homes. Your best move will be to hire a Realtor who knows the area you are looking in and can connect with other agents who might be selling the homes you are looking in.