Stimulus? I think we are a bit overstimulated here…

In case you haven’t heard, the local real estate market in , , , , and the Tri-Valley is on fire. Multiple offers are everywhere, at least in the lower price ranges. In the past 2 weeks, I have had clients consider writing offers or actually writing offers on homes that are seeing a lot of interest. Consider:

* Wrote an offer on a house in San Ramon listed at $664,950. 7 offers, 2 all cash. Didn’t get it (we weren’t all cash)

* Wanted to write an offer on a bank owned house in Dublin Ranch listed at $690,000. Gave up after there were at least 4 offers in, and it was already bid up into the mid $700,000’s (out of my buyer’s price range)

* Considered writing an offer on a house in Pleasanton listed at $543,000 for another client. Ended up with 11 offers, selling for approx $575,000 as rumor has it

* Wrote an offer on a newer house in Windemere, listed at around $850,000. 38 offers later, my client was able to get it. Needless to say, it sold for way over asking price.

* Wrote an offer on a gorgeous house in Danville in the $1.7 range. On the market for almost 4 months. My client likes it, decides to write an offer. Of course, seller gets another offer that day. Game on. After a couple of counter offers for both parties, my client gets the house.

And the story goes on and on. All across the Tri-Valley right now, many homes are seeing some of the most intense interest since the heyday of 2004 - 2006, especially if the home is newer.

Some of this is due to the first time buyer tax credit, which was expanded to include non-first time buyers. Some of this is due to extremely low interest rates, thanks to the Fed’s conscious decision to prop up the housing market with cheap money. Some of this is due to the surge in the stock market over the past few months, which has made many buyers think that the worst is behind us. And some of this is due to some excellent opportunities out there in the market.

But how much stimulus is too much? One could make a strong argument that the local market is over-stimulated, at least in the lower price ranges. However, the upper price ranges, especially the luxury home segment, could certainly use a shot in the arm. Many buyers are getting frustrated, wondering how they can encounter multiple offer situations time and time again when we are in the middle of a severe recession, with record unemployment and lingering unease at the national and global economy.

Maybe it is a good thing to see the tax incentives expire at the end of April, so we can get back to some semblance of sanity in the local real estate market, which seems to gyrate between the extremes of sluggish to overheated without spending much time in the middle. I want what every good realtor wants… a nice, stable, balanced market with a steady 2 to 3% appreciation rate, where the buyer actually has more than 20 minutes to decide if they want to pursue the property, and all parties can make informed, non-rushed decisions. Yeah right. I’m sure that day will come right around the time the Saints win a Super Bowl…