Chairman Bernanke’s Semiannual Monetary Policy report to the Congress on July 15, 2008 revealed a gloomier picture than once imagined.  As the housing slump continues to erode at homeowner’s equity, the number and frequency of foreclosures in on the rise. Personal consumption has somehow managed to keep pace year to date, however, consumer sentiment has fallen sharply.  I see numerous emails for retail chain stores and in some cases portfolios of retail stores priced for quick sale- bankruptcies by national brand tenants including Sharper Image, Lillian Vernon, Levitz Furniture, Bombay Co., Ames and Kmart accelerate the need to sell off retailers that may not survive the storm. Of course, one investor’s panic is another investor’s opportunity.

Closer to home, Jessica Saunders of the East Bay Business Times wrote an article titled “Apartment market remains flat“, where she pointed out a similar message I conveyed on Jun 3, 2008. The gap between sellers expectations and buyers willingness to pay is WIDE!  Agreeably, it is the sellers who have not adjusted their expectations for the current market conditions.  Using Sales Comparables is wishful thinking if Sellers want to get their property sold. Buyers are looking for anything reasonable- unfortunately the ubiquitous overpriced listing exists on all the internet sites. In the first half of 2008, only 17 multifamily properties in Contra Costa county (5 units and higher) closed escrow. Compare that to 22 properties one year earlier.

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