Broker Blog

Leadership: I have in my quotations collection this quote from an unknown author: “An effective leader must be a master of two ends of the spectrum: Ideas at the highest level of abstraction and Actions at the most mundane level of detail”.

Through last weekend and the early part of last week we had a group called the Leadership Council visit our firm. There were twelve leaders of real estate companies around the country who took their valuable time to look at our firm and give us constructive feedback about how we can improve. I have to credit them with leadership as described above – they worked very hard and explored a large range of ideas on our behalf. My thanks go out to each of them.

From consolidating our “eight passwords list”, to putting exterior lighting on our Healdsburg listings, to staff and Earl and I being more present in each office on a regular basis - there are small refinements to make, larger changes to undertake and grand ideas to test. We will be working on all of these in the coming months. Thanks, too, to our staff and sales agents who participated in this assessment.

One more thing on leadership and character – In Wednesday’s New York Times, Thomas Friedman wrote an article entitled “Why How Matters”. I encourage each of you to read it. The link is: http://www.nytimes.com/2008/10/15/opinion/15friedmanhttp://www.nytimes.com/2008/10/15/opinion/15friedman.html?_r=1&scp=1&sq=why%20how%20matters&st=cse&oref=slogin
“How” certainly matters as part of our company culture, and I am very proud of that and how our agents reflect that character.

Company Update: Wine Country Group Update for September, 2008

For the third quarter of 2008, The Wine Country Groups closings were 6% ahead of the rate for 2007. However, with the lower average price of the transactions that we are handling this year, our dollar volume is off by 30% year over year. New sales for the quarter were 76% ahead of the third quarter of 2007, so certainly there are buyers out there. Listings are also ahead of a year ago by 40%. Our available inventory numbers 206 listings vs. 231 at this time a year ago. Our average listing value is down from $900,000 in September, 2007 to $800,000 at the end of September of this year. We have 96 open escrows going into October vs. 67 a year ago, but the dollar volume is closer than the unit numbers, $96,000,000 compared to $67,000,000.

Our Napa office continues to do extremely well, closing 16 sides in September, ’08 compared to 3 a year ago. Nearly all of that volume is bank owned properties, or short sales, and they are doing a great job servicing these demanding accounts. We remain number one in market share in our Sonoma, Healdsburg and Cloverdale markets.

September Market Update: Sonoma County: Closed sales in the month of September reached 410 units – 46% more than in September, 2007, and 5% ahead of August, 2008 (392 units). New sales (443) in September, ’08 were 107% ahead of new sales (214) in September a year ago and 10% ahead of the pace (402) in August, ’08. I have not extracted the bank owned and short sale properties from these figures, but my guess is that at least 60% of the activity was in distressed properties. I will be looking into that analysis next week and give you the data.

The inventory of unsold homes (2140) was 23% lower than at this time a year ago when it stood at 2784 units. The county is down to 4.8 month supply of inventory based on new sales compared to a 13 month supply a year ago. So activity is certainly in a positive vein. The price per square foot ($258.00/sf) of sold homes was at it’s lowest point in four years and compared to $354.00/sf a year ago. Again, I have not yet determined the impact of distressed sales on that figure, but I am certain that is significant and that non-distressed sales enjoyed a far higher value than the distressed sales.

Sonoma Valley: Closed sales in the Sonoma Valley totaled 26 in September, 2008 compared to 16 in September, 2007 and 31 in August, 2008. New sales totaled 21 in September ’08 compared to 14 in September ’07 and 27 in August, ’08. The inventory of unsold homes totaled 202 in September compared to 255 a year ago – a 26% decrease. Within the inventory and sales, there is a large discrepancy between the average asking price ($1,000,000) and the average selling price ($558,000). This probably indicates that most of the sales are occurring at the lower end of the market and that the higher priced inventory is taking longer to sell. The median price of sold homes was $380,000 in September, 2008.

Healdsburg: There was a small positive bump in the Healdsburg market in that there were 13 new sales in September, 2008, compared to just 5 a year ago and 9 in August, 2008. Let’s hope that that trend continues. Unsold inventory remains ahead of a year ago (107 v. 101) bucking the overall trend in the County. The median price of sold homes remained the highest in the County at $528,000.

Cloverdale: Activity improved in Cloverdale in the month of September, 2008. There were 13 closed sales compared to 4 in September, ’07 and 6 in August, ’08. New sales also totaled 13 compared to 7 in September, ’07 and 11 in August, ’08. The inventory of unsold homes is down to 74 units compared to 106 a year ago and the market contains a 5.7 month supply of inventory based on the current pace of sales. The price per square foot of homes sold ($188/sf) compared to $246/sf a year ago and $177/sf last month.

Napa: The city of Napa closed sales (84) in September, 2008, were at a pace 75% ahead of the 48 homes that closed in September, ’07. New sales (96) in September, ’08 were 78% of the pace in September ’07 and equal to the pace of August, 2007. Inventory is down to 812 units – 10% lower than the 902 units that were available in September, 2007. There is an 8.5 months supply of unsold homes based on the new sales in September. The price per square foot ($320/sf) of sold homes in September, ’08 was 15% lower than the price per square foot ($376/sf) a year ago, but I have not factored out the distressed sales which are sure to have an impact.

American Canyon: Though we don’t have an office in American Canyon, we were the number one firm in market share in September, 2008. There were 26 closings in the month of September compared to 9 a year ago and 19 in August, ’08. There were 23 new sales in the month compared to 7 a year ago and 26 last month. Inventory is down to 120 units compared to 177 a year ago, but well ahead of the 98 last month. We believe that 100% of the sales in American Canyon in September were bank owned or short sale properties. I will do an analysis on the inventory next week to see how many of the properties for sale are distressed. The price per square foot of the sold properties has been steady over the past four months at $168/sf. It seems to have reached “the floor”.

Up Valley, Napa Co:  Like Healdsburg, Up Valley is the one of the two Wine Country markets where inventory remains above a year ago (181 to 160) and sales are slow.  There were 9 closings in September, 2008, compared to 14 in August, ’08 and 6 in September, ’07.  The average “Days on Market” for the homes that sold in September were 197 – so some older inventory was selling.  The sales price to original list price for these homes was 85%.  There were 5 new sales this past month compared to 15 in August and 8 in September, ’07.  Overall, a very slow time in Up Valley. 

Solano County: We are doing a good deal of business in western Solano County. All the business that we are doing is bank owned properties and the vast majority of all transactions in the county are distressed sales. Closings in September, 2008, 419 units, were 167% ahead of the sales (157) in September, ’07. New sales (536) were 264% ahead of the pace in September, ’07. Inventory was down 19% from a year ago and there is now just a 4.7 month supply of inventory compared to a 13 month supply a year ago. The median price ($261,000) for homes closed in September, ’08 was equal to that in August, ’08, and 31% below that of September, ’07. It will be interesting to see if the pace of foreclosures moderates in Solano County moving into the next few months.

I attended the Economic Summit for Solano County a few weeks ago and here are a few interesting, and sometimes startling, facts from the summit:
1. Construction material costs are down 5.6% over the past year
2. Lumber costs are at down 40% and the lowest in twenty years
3. The City of Fairfield usually issues 700+ housing permits per year. Through the end of August, 2008, they have issued 14 new housing permits.
4. The retail industry (all those discount stores along I-80) is really in the tank. The retail specialists listed a half dozen national retailers that have declared bankruptcy this year and another dozen that are in danger of doing so. I’m thankful not to be in that business!

Webstats: Our internet statistics continue to climb. Our site visits increased to 7,193 for the quarter ended 9/20/08 compared to 6,896 in the 2nd quarter. Visitors to our website came from 35 countries/territories around the world. 30% of our traffic comes from direct traffic, 48% from “referring sites” and 22% from search engines. If you have a property website, be sure to use the built in “Google Analytics” to evaluate your traffic.

Recognition: Lori Greenstein Bremner of our Orion Partners Commercial Property Management operations received the prestigious “State Lead Ambassador” award from the American Cancer Society in a Leadership Summit in Washington D. C. last week. Lori has been at the forefront of advocacy work for the American Cancer Society in California. She is a inspiring leader in this critical area affecting so many families in our towns, state and country. Thanks, Lori, for all that you do.

Closings: As mentioned in the last edition of the Broker Blog, I have some catching up to do on recognizing closings. For the period 9/1 to 10/10, the following agents had closings: First and foremost, Aimee Greco of our Napa office and Richard Hurst of our Cloverdale office had their first closing as FHA-WCG agents – wishing them many more! Other agents with closing include: Dee Grohmann (Healdsburg); Heidi Diamantini (Healdsburg); Mary Beth Foster (Sonoma); Hank Lane (Healdsburg); Michelle Delfino (Healdsburg); Kendra Martin (Sonoma); Constance Sharpe (Glen Ellen); Pat Brown (Sonoma); Frank Lazzarotto (Sonoma); Patty Keiser (Glen Ellen); Sheila Deignan (Sonoma); Charlene Schanzer (Healdsburg); Faeli Vyn (Napa); Debbie Hendershot (Healdsburg); Erin George (Sonoma); Joan Harrington (Sonoma); Mari Johnson (Sonoma); Randy Haak (Glen Ellen); and Felice Torri (Sonoma). The following agents had two closings during this period: Joyce Davison (Sonoma); Svetlana Ternovskaya (Napa); Holly-Evans White (St. Helena); Ron and Jane Pavelka (Cloverdale); Lisa Albertson (Sonoma). The following agents had three closings during this period: Jana Jones (Healdsburg); Penelope La Montagne (Healdsburg); Frank Trozzo (Napa); Bill Streett (Sonoma) and Daniel Casabonne (Sonoma). Linda Alioto of our St. Helena office closed four transaction sides during this period. Doug Del Fava and Susan Parker of our Kenwood office had six closings. David Barker of our Napa office had seven closings, and Cheri Stanley of our Napa office closed a whopping ten transactions in this five week period. Congratulations and well done by all!

Birthdays: Birthdays in the past week include Allyson Valente and Ryan De Mello.

Memorial: A memorial service for Dorothea Goehring was held on Saturday, October 18 at 2:00 pm at Faith Lutheran Church in Sonoma. Dorothea was a Realtor with Henry for much of the last thirty years – at times, being the top producer in the company. In my experience with Dorothea, she loved her clients and associates in the business, loved a party, and I will always remember her fondly.