November 2014 Real Estate Update

The upcoming holidays didn’t appear to distract Northern California home shoppers in November, as the months’ supply of inventory (MSI) declined or held steady from October in almost every one of Pacific Union’s regions. In fact, the MSI reached or tied yearly lows in the East Bay, San Francisco, Silicon Valley, Sonoma County, and Sonoma Valley, as well as in the Tahoe/Truckee region.
Wine Country real estate remained a hot commodity, with the November median sales price climbing to an annual high in Napa County and Sonoma Valley. Single-family home prices in the Tahoe/Truckee region also hit one-year highs, as buyers clamored to purchase a property before the ski season kicks off.

Click on the image accompanying each of our regions below for an expanded look at local real estate activity in November.

CONTRA COSTA COUNTY

The median sales price for a single-family home in our Contra Costa County region was up slightly from the previous month and closed November at just above $1 million. Buyers paid an average of 99 percent of original prices, also a tiny increase from October.
At 1.5, the MSI was identical to levels observed since the early summer, with the exception of a brief uptick in September. Contra Costa homebuyers took an average of 31 days to purchase a home, the longest amount of time since the beginning of 2014.
Defining Contra Costa County: Our real estate markets in Contra Costa County include the cities of Alamo, Blackhawk, Danville, Diablo, Lafayette, Moraga, Orinda, Pleasant Hill, San Ramon, and Walnut Creek. Sales data in the adjoining chart includes single-family homes in these communities.

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EAST BAY

Most individual Bay Area housing markets remain heavily tilted in favor of sellers, but the East Bay is arguably the most skewed. In November, the MSI dipped to 0.7 – a yearly low – and sellers took home an average of 12 percent over asking price, the highest premium in any of Pacific Union’s Northern California regions.
The median sales did relax a smidgen from the previous month, dipping to $826,000. Buyers took an average of 20 days to close a sale, consistent with general patterns observed since April.
Defining the East Bay: Our real estate markets in the East Bay region include Oakland ZIP codes 94602, 94609, 94610, 94611, 94618, 94619, and 94705; Alameda; Albany; Berkeley; El Cerrito; Kensington; and Piedmont. Sales data in the adjoining chart includes single-family homes in these communities.

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MARIN COUNTY

After dipping into the six-figure range in October, the median sales price in Marin County climbed back above $1 million in November. The MSI went in the opposite direction, falling to 1.6, though the month-over-month change was not dramatic.
Homes took an average of 59 days to sell, very close to numbers recorded one year earlier. Sellers received an average of 96 percent of asking price, a bit less than in the preceding few months.
Defining Marin County: Our real estate markets in Marin County include the cities of Belvedere, Corte Madera, Fairfax, Greenbrae, Kentfield, Larkspur, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito, and Tiburon. Sales data in the adjoining chart includes single-family homes in these communities.

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NAPA COUNTY

Home prices in Napa County have risen in odd-numbered months and fallen in even-numbered months all year, and this trend continued in November, with the median sales price increasing to $610,000, a yearly high. At 3.7, the MSI was unchanged from the previous month.
Napa homebuyers took an average of 81 days to finalize a sale – about a week quicker than in October – and paid an average of 95.1 percent of original price, the most since the early summer.
Defining Napa County: Our real estate markets in Napa County include the cities of American Canyon, Angwin, Calistoga, Napa, Oakville, Rutherford, St. Helena, and Yountville. Sales data in the adjoining chart includes all single-family homes in Napa County.

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SAN FRANCISCO – SINGLE-FAMILY HOMES

November single-family home sales data in San Francisco was fairly similar to October: the MSI held steady at a low 1.1, and the average home took just about a month to leave the market.
The median sales price in the city was above $1 million for the eighth month this year and closed November at $1.16 million. Continuing a pattern that has persisted throughout 2014, the average successful buyer could expect to pay a premium for a single-family home in San Francisco, this time by about 7 percent.

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SAN FRANCISCO – CONDOMINIUMS

For the third time this year, the median sales price for a San Francisco condominium in November was north of the $1 million mark: $1.03 million to be precise. Condominium shoppers in the city also shelled out 6 percent more than original price, nearly identical to numbers recorded in October.
Unlike in most other part of the Bay Area, San Francisco condominium inventory grew month over month, with the MSI inching up to 1.6. Properties sold in an average of 37 days, almost exactly the same amount of time as in October.

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SILICON VALLEY

Pacific Union’s Silicon Valley region remains our region’s most expensive place to purchase a home, with the median sales price at exactly $2.5 million in November. Silicon Valley homebuyers have been paying more than asking price all year, and sellers received average premiums of 3.5 percent last month.
Buyers scooped up properties in an average of 28 days, a few days longer than in October. At 1.1, the MSI was unchanged from the previous month and remains at a one-year low.
Defining Silicon Valley: Our real estate markets in the Silicon Valley region include the cities and towns of Atherton, Los Altos (excluding county area), Los Altos Hills, Menlo Park (excluding east of U.S. 101), Palo Alto, Portola Valley, and Woodside. Sales data in the adjoining chart includes all single-family homes in these communities.
Mid-Peninsula Subregion
At $1.36 million, November’s median sales price in our Mid-Peninsula subregion stayed in the same general range as it has been since the midsummer. The MSI inched up to 1.0 in November but was still very close to its 2014 low.
Homes left the market in an average of 25 days, nearly identical to levels recorded one year ago. Buyers paid just about 1 percent more than asking price on average, just as they did in October.
Defining the Mid-Peninsula: Our real estate markets in the Mid-Peninsula subregion include the cities of Burlingame (excluding Ingold Millsdale Industrial Center), Hillsborough, and San Mateo (excluding the North Shoreview/Dore Cavanaugh area). Sales data in the adjoining chart includes all single-family homes in these communities.

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SONOMA COUNTY

The median property sales price in Sonoma County has been gradually relaxing for the past couple of months and drifted down to $480,500 in November. Buyers continue to enjoy slight discounts and paid an average of 95.4 percent of original price.
For the first time in more than a year, the MSI in Sonoma County dipped below 2.0, finishing November at 1.8. Properties sold in an average of 73 days, giving buyers a few extra days than they had in September and October.
Defining Sonoma County: Our real estate markets in Sonoma County include the cities of Cotati, Healdsburg, Penngrove, Petaluma, Rohnert Park, Santa Rosa, Sebastopol, and Windsor. Sales data in the adjoining chart includes all single-family homes and farms and ranches in Sonoma County.

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SONOMA VALLEY

Pacific Union’s Sonoma Valley region saw the median sales price soar to $750,000 in November, a robust year-over-year increase of 50 percent. The MSI in the region has been declining since August and reached a one-year low of 1.8.
Homebuyers still managed to avoid paying full price, with the average property fetching 93.5 percent of original price. Homes stayed on the market for an average of 77 days, shorter than either of the preceding two months.
Defining Sonoma Valley: Our real estate markets in Sonoma Valley include the cities of Glen Ellen, Kenwood, and Sonoma. Sales data in the adjoining chart refers to all residential properties – including single-family homes, condominiums, and farms and ranches – in these communities.

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TAHOE/TRUCKEE – SINGLE-FAMILY HOMES

The median sales price for a single-family home in the Tahoe/Truckee region saw big year-over-year growth in November, rising to $740,000, an annual gain of 32 percent. Inventory the region has been steadily dropping since the summer in anticipation of the ski season, and November’s MSI of 4.5 represents a yearly low.
Still, buyers were in no rush to close a purchase, with the average single-family home in the region taking more than four months to sell. On average, buyers paid about 90 percent of original price, less than they have at any point since the spring.
Defining Tahoe/Truckee: Our real estate markets in Tahoe/Truckee include the communities of Alpine Meadows, Donner Lake, Donner Summit, Lahontan, Martis Valley, North Shore Lake Tahoe, Northstar, Squaw Valley, Tahoe City, Tahoe Donner, Truckee, and the West Shore of Lake Tahoe. Sales data in the adjoining chart includes single-family homes in these communities.

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TAHOE/TRUCKEE – CONDOMINIUMS

There are still plenty of available condominiums in the Tahoe/Truckee region, with the MSI unchanged from October at 6.1. November’s $385,000 median sales price was down about $30,000 from the previous month.
Buyers paid an average of 87 percent of asking prices, the biggest discounts we’ve observed in the past year. Condominiums in the region left the market in 106 days, the quickest pace of sales since the late summer.
Defining Tahoe/Truckee: Our real estate markets in Tahoe/Truckee include the communities of Alpine Meadows, Donner Lake, Donner Summit, Lahontan, Martis Valley, North Shore Lake Tahoe, Northstar, Squaw Valley, Tahoe City, Tahoe Donner, Truckee, and the West Shore of Lake Tahoe. Sales data in the adjoining chart includes condominiums in these communities.

Bay Area Home Prices Closer to Peak Than Rest of California

Home and condominium prices across the nine-county Bay Area are about 10 percent shy of their 2007 highs, says recently released data, closer than they are in other parts of California.

According to a new report from CoreLogic DataQuick, the median sales price for single-family homes and condominiums across the nine-county Bay Area was $601,000 in October, 9.6 percent below its summer 2007 peak of $665,000. The company notes that the median sales price in the Bay Area is closer to its prerecession high than it is in any other major region of the state.

In a separate report, CoreLogic DataQuick said that the median sales price in California is still 21.1 percent shy of its spring 2007 peak of $484,000.

Bay Area home prices have been declining since June but are up 11.3 percent year over year, the company says. Annual price gains ranged from 18.3 percent in San Francisco to 3.5 percent in Sonoma County. San Francisco claimed the highest median sales price in the Bay Area at $999,250.

In a statement accompanying the report, CoreLogic DataQuick Analyst Andrew LePage attributed slowing prices in the Bay Area to both a lack of affordability and modest inventory gains while cautioning that further economic growth could reverse that pattern.

“Still, if we see more job and wage growth heading into 2015 it’s easy to imagine demand and price pressures building again,” LePage said.

The company says that 7,693 properties changed hands across the nine-county region in October, an annual increase of 1.3 percent. October’s sales volume was 9.7 percent below its average over the past 26 years when the company began tracking data. Contra Costa County saw the largest-year-over-year sales-volume gains (6.8 percent), while declines were greatest in Napa County (7.4 percent).

Both investor activity and all-cash sales throughout the Bay Area were down from one year earlier, according to the report, which will hopefully provide some relief for would-be homebuyers who have been struggling in one of the nation’s most competitive real estate markets.

The number of buyers offering all cash in October dropped to 20.5 percent, down from 24.2 percent a year ago and the second lowest recorded since November 2008. Purchases by absentee buyers, which the company says are mostly investors, declined to 19.4 percent, down from 20.3 percent in October 2013.

(Image: Flickr/401(K) 2012)

Data Says Big Run-Up in Bay Area Home Prices Slows

The meteoric rise in home prices that has defined Bay Area real estate markets for more than two years is settling down. Select communities continue to post double-digit price increases, but prices in the region as a whole are falling back to earth, according to newly released data.

The most recent S&P/Case-Shiller Home Price Indices delivered the sobering news: The San Francisco metro area, which had shown double-digit annual gains since November 2012, posted an annual return of 9 percent in August. One year earlier the year-over-year appreciation stood at 25.4 percent.

On a month-to-month basis, the pullback was even more pronounced: San Francisco had the largest monthly decline among the nation’s 20 largest metro areas in August — a 0.4 percent drop — and was the only metro area to post a negative monthly return two months in a row. (Prices fell 0.3 percent  from June to July.)

That’s the bad news. The good news is that even as home-price gains slow down, the increases posted over the past two years still make the San Francisco metro area one of the hottest markets for price growth.

The 9 percent annual rise in home prices that seems paltry when judged by past performance is nonetheless the third-highest gain among Case-Shiller’s top-20 markets.

Nationally, home prices posted an annual gain of 5.1 percent in August, and on a monthly basis they rose 0.2 percent — not much of a contrast to the Bay Area’s recent cooling.

And a look at local sales data shows that year-over-year comparisons of median single-family home prices varied widely in Pacific Union’s Bay Area regions, according to MLS statistics.
Annual-home price gains were up a solid 20 percent in our Silicon Valley region in August, and up 15 percent in our Contra Costa County region and 13 percent in the East Bay.

The annual declines in August were in our Sonoma Valley region, down 3 percent; Napa County, down 2 percent; and the Mid-Peninsula subregion, down 1 percent.

Lastly, if you’re wondering why Case-Shiller is just now reporting home-price data for August when other real estate researchers are preparing October results, well, that’s the way the index operates. The data is among the most highly regarded of all housing reports, known for its breadth of research and the accuracy of its conclusions, but it will never win a race for fast results.




(Image: Flickr/401(K) 2012)

Real Estate Roundup: Bay Area One of Top Markets for Absentee Homebuyers

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:

A home in San Jose, one of the fastest-growing real estate markets for absentee buyers.

INVESTORS DRIVE UP ABSENTEE-BUYER ACTIVITY IN SAN JOSE, SAN FRANCISCO
Steadily rising home prices across the Bay Area have attracted both institutional and individual investors to our local real estate markets, leading to some of the largest increases in purchases by absentee homebuyers in the country.

According to a study by Builder citing CoreLogic data, purchases by absentee buyers rose 1.96 percent in the San Jose metro area from 2013 through the third quarter of this year, the third largest gains in the U.S. In the San Francisco metro area, which includes Oakland, absentee-buyer activity rose 1.72 percent during that same time period, No. 4 in the nation.

Despite the increase in the number of absentee buyers, the California Association of Realtors (CAR) recently released a forecastprojecting that the number of investors in the state will decline in 2015.

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SEPTEMBER DISTRESSED SALES NONEXISTENT IN NAPA COUNTY
Recent CAR statistics show that the median home sales price in Napa County rose nearly 33 percent on an annual basis in September, the largest increase in California. Last week, the organization released another report that spells more good news for the Napa housing market: distressed sales virtually disappeared in September.

CAR’s latest pending and distressed sales report says that Napa County boasted a 0 percent distressed-sales rate for single-family homes in September, the lowest in California. Distressed sales in Napa declined from 5 percent in August and 12 percent from one year ago.

Almost all Bay Area counties for which CAR published data had lower rates of distressed sales than the statewide average of 9 percent, with the exception Solano County.

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MAPPING SAN FRANCISCO’S 40 MOST IMPORTANT CONSTRUCTION PROJECTS
Construction cranes have been a constant sight in San Francisco over the past few years, working to help bring relief to the city’s housing crunch.

Curbed SF has compiled a list and map of the 40 most notable commercial and residential real estate construction projects in the city. Many of the projects profiled are clustered in the city’s densely packed northeastern corner, though projects in Mission Bay and central San Francisco also made the list.

The residential housing developments on the list range from buildings that will combine offices, stores, and condominiums to those that are strictly residential. Curbed SF’s list puts the combined number of housing units the 40 developments will bring to market at more than 4,500, though it does not disclose numbers for all projects included.

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U.S. FORECLOSURE ACTIVITY LEVELS LOWEST SINCE 2011
The number of short and distressed sales declined across the country in the third quarter on both a quarterly and annual basis, bringing activity to its lowest level in two-and-a-half years.

According to a recent RealtyTrac report, distressed and short sales accounted for 12.7 percent of all transactions in the third quarter, down from 14.2 percent in the second quarter and from 14.5 percent in the third quarter of 2013.

Although there are fewer distressed homes on the market, homebuyers willing to take a chance on a fixer-upper can still expect to receive a significant discount, RealtyTrac Vice President Daren Blomquist said.

“Even as the share of distressed sales decreases, the average discount on distressed properties continues to be substantial because the primary factors driving that discount are still in place,” Blomquist said. “Distressed properties are typically in poor condition and have a highly motivated seller, whether that seller is the distressed home owner in foreclosure or the bank that has repossessed the property through foreclosure.”

(Photo: Flickr/David Sawyer)

San Francisco Metro Area Still Posting Double-Digit Percent Annual Home Price Gains

The San Francisco metro area is one of just three major U.S. regions where year-over-year home prices are still growing by double-digit percentage points, according to the latest S&P/Case-Shiller Home Price Indices.
S&P/Case-Shiller’s data says that annual home prices in the San Francisco region increased by 10.3 percent in July, the third-largest gains of the 20 major U.S. metro areas included in the index. Across the index’s 20-city composite, home prices grew by 6.7 percent from July 2013.
Still, the rate of annual appreciation in the San Francisco metro area has slowed significantly since earlier in the year; as recently as March, home prices in the region were up year over year by more than 20 percent as measured by the index.
San Francisco was also the only metro area included in the 20-city composite to post a monthly decline from June to July, with home prices falling by 0.4 percent.
“At the bottom was San Francisco with its first decline this year and the only city in the red,” David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in a statement. The report notes that July’s month-over-month price drop was the largest recorded in the region since February 2012.
A look at MLS data reveals that the median single-family home price increased in every one of Pacific Union’s Bay Area regions year over year in July. Annual home price gains were largest in Sonoma Valley, up 41 percent from July 2013. At $750,000, Sonoma Valley’s July median sales price reached a two-year high.
Home price growth across our other regions ranged from 25 percent in San Francisco to 4 percent in Marin County.


(Photo: Flickr/Andrew_Writer)

 

Real Estate Roundup: Distressed Sales Drop in Most Bay Area Counties

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:

FIVE BAY AREA COUNTIES HAVE FEWEST DISTRESSED SALES IN STATE
The number of distressed home sales decreased across most Bay Area regions from July to August, with five of our local counties seeing the fewest such transactions in California.
According to the California Association of Realtors’ August 2014 pending and distressed sales report, San Mateo County had the fewest distressed sales in the state: just 1 percent. In Marin and Santa Clara counties, distressed properties accounted for 2 percent of sales, followed by Alameda and Contra Costa (both at 3 percent) and Sonoma (4 percent) counties.
Solano is currently the only Bay Area county included in the report with a higher rate of distressed sales than the statewide average of 9 percent.

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PACIFIC UNION RECOGNIZED FOR UNIQUE CUSTOMER-SERVICE INITIATIVE
The National Association of Realtors recently recognized Pacific Union for an innovative customer-service program that our firm has undertaken.
Designed by the Gualala, Calif.-based firm Thank You Very Much Inc., the program will better enable Pacific Union’s full-time staff to provide support to its network of more than 600 real estate professionals in the Bay Area and the Tahoe/Truckee region. Pacific Union CEO Mark A. McLaughlin told NAR that he believes training the firm’s employees to more efficiently assist real estate professionals will ultimately translate into an improved experience for homebuyers and sellers.
“We don’t think we can move the needle on consumer satisfaction until we move it with our internal clients — our salespeople,” McLaughlin said.

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BAY AREA DROUGHT DRAINS ENTHUSIASM FOR SWIMMING POOLS
The prolonged drought that has plagued Northern California for the past three years is helping to put a damper on many Bay Area homeowners’ desire for swimming pools, according to a recent article in the San Jose Mercury News.
The publication says that permits for new pools have declined substantially in both San Jose and Concord. And in Walnut Creek, where summer temperatures often reach 100 degrees, more homeowners are submitting applications to demolish pools than those seeking permits to build them.
Although homeowners cite a variety of other reasons for removing pools – including maintenance and insurance costs and nonuse – the drought is often the deciding factor for some.
“The drought is the last nail in the coffin for the pool,” Zali Lorincz of ZL Construction told the Mercury News.

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NAR WANTS DRONE BAN LIFTED FOR INDUSTRY
Citing keen interest from real estate professionals across the country, NAR is asking the Federal Aviation Administration to amend its rules to allow for the use of drones, according to a HousingWire article.
Currently, the FAA doesn’t allow the use of drones for any commercial purpose, but NAR says it is concerned that continuing to disallow them could impede industry innovation. The organization also stated it believes that addressing national and personal security concerns related to the use of drones won’t pose a problem.
“Properly written regulation would permit the use of UAV technology within the real estate industry, while maintaining safety in the NAS and privacy of citizens,” the organization said in a statement.
(Photo: Flickr/Jeff Turner)

Unemployment Drops in All Nine Bay Area Counties as Summer Ends

The Bay Area economy was riding high as summer came to a close, with August unemployment rates down from the previous month in all nine of our local counties, according to the latest figures from the California Economic Development Department. And that can only be promising news for our local real estate markets as the busy fall season gets going.

As in July, every Bay Area county posted a lower unemployment rate that the California average of 7.4 percent on a nonseasonally adjusted basis, which was unchanged from the preceding month. Bay Area counties were the only ones in the state to boast unemployment rates of less than 5 percent, which many economists believe indicates that a market has reached full employment.

Marin County continued to have the state’s lowest percentage of unemployed workers, at 4.2 percent, followed by San Mateo (4.3 percent), San Francisco (4.7 percent), and Napa (4.8 percent) counties. In the other five Bay Area counties, unemployment ranged from 5.4 percent in Sonoma County to 6.8 percent in Solano County.

The EDD’s recent Labor Day briefing says that California has regained all of the 1.33 million jobs it lost during the Great Recession in June of this year. July marked the 53rd consecutive month of statewide employment growth, and California now has about 43,000 more nonagricultural jobs than it did at its prerecession peak in July 2007.

According to the briefing, the Bay Area has played an instrumental role in the state’s employment growth.

“Buoyed by its high technology and information industries, the San Francisco Bay Area Region has led California’s economic expansion,” the agency wrote in its report.
Between July 2010 and July 2014, Bay Area nonfarm jobs expanded by 13 percent, what the EDD calls “far and away the largest four-year job gain of any of California’s economic regions.” The Bay Area was the only major region to best the state’s four-year job growth, which clocked in at 8.9 percent.

Despite the Bay Area’s plentiful technology jobs, the EDD’s 10-year regional job-growth forecast projects that the largest local employment gains between 2010 and 2020 will occur in the hospitality and tourism sector, with nearly 186,000 total positions. The information and communications technology industry is expected to open about 160,000 jobs in that same time frame, while the retail sector will provide a total of nearly 137,000 positions.


(Photo: Flickr/Thompson Rivers University)

Bay Area a Top Destination for Buyers From China — and From France and Russia, Too

It’s no secret that the Bay Area is a popular destination for international homebuyers, particularly those from China, but two new reports from the National Association of Realtors add tantalizing details.

Canadian residents account for the largest share of international U.S. home purchases (19 percent), but buyers from China (No. 2 at 16 percent) hold the lead in dollar volume, purchasing $22 billion in property with an average sales price of $590,826, according to NAR’s2014 Profile of International Home Buying Activity.

Chinese buyers tended to purchase properties in higher-priced markets such as California, Washington, and New York, according to the report, while Canadians bought in lower-priced markets such as Florida and Arizona.

China was also the fastest-growing source of international transactions, accounting for 16 percent of all purchases in the year ended March 31, up 4 percent from the previous year.

San Francisco was the second-most-popular destination for Chinese homebuyers, trailing Los Angeles but ahead of Irvine, Calif.; New York City; and Las Vegas.

In a separate report, NAR said that San Francisco was also a top destination for buyers from France, Russia, New Zealand, and Singapore who conducted property searches on Realtor.com in May.

Favorable exchange rates, affordable home prices, and rising affluence abroad is driving interest among international buyers.

NAR estimates total international sales at $92.2 billion over the past year, up from $68.2 billion in the previous 12 months. Four states accounted for 55 percent of purchases by international buyers: Florida (23 percent), California (14 percent), Texas (12 percent), and Arizona (6 percent).

Pacific Union has been at the forefront of efforts to smooth transactions for Chinese buyers in the Bay Area. Last year, we launched a groundbreaking China Concierge Program to serve that demographic while also giving our Northern California clients access to a new set of buyers. And in May, Pacific Union rolled out aMandarin-language website hosted in China in order to offer homebuyers in the country better access to Bay Area property listings.

Last year, Pacific Union CEO Mark A. McLaughlin was one of just 10 U.S. executives invited to a series of meetings at the U.S. Embassy in Beijing, where he met with some of China’s wealthiest individuals to discuss U.S. real estate investment opportunities.

(Image: Flickr/Reizenbee)

Real Estate Roundup: Bay Area Distressed Home Sales Lowest in State

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:
DISTRESSED SALES LESS THAN 5 PERCENT IN FOUR BAY AREA COUNTIES
Rapidly rising home prices have restored equity to many Bay Area homeowners, pushing the number of distressed sales in most of our counties into the single-digit range.
A recent report from the California Association of Realtors shows that four Bay Area counties led the state with the fewest distressed sales in May. Alameda County had the smallest rate of distressed sales in California at 2 percent, followed by Marin, San Mateo, and Santa Clara counties at 3 percent.
Distressed sales accounted for 11 percent of all California transactions in May, half of what they did one year ago. With the exception of Solano, all Bay Area counties included in the report bested the statewide average, though Solano saw the largest year-over-year distressed-sales decline in our region.

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BAY AREA HOME PRICES: OVERVALUED BUT NO LOOMING BUBBLE
Home prices in three Bay Area markets are currently among the nation’s most overvalued but not nearly to the extent they were eight years ago.
According to Trulia’s latest Bubble Watch report, home prices in San Jose are 11 percent overvalued, the sixth highest in the country. At 10 percent overvalued, Oakland homes were next on the list, followed by San Francisco in 10th place (6 percent overvalued). Back in 2006 – before the housing crisis — all three markets were overvalued by more than 50 percent.
Still, slowing price gains across the country should prevent another bubble, Trulia Chief Economist Jed Kolko says.
“We’d be at greater risk of heading toward a bubble if price gains were still accelerating, but they’re not,” Kolko wrote.

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MOST CALIFORNIA HOMEBUYERS USE SOCIAL MEDIA IN SEARCH
Social media and mobile devices are playing an increasingly key role in the homebuying process, a recent survey found.
More than 75 percent of Golden State homebuyers used social media in their home-search process, up from 52 percent in 2011, according to a poll conducted by CAR. Respondents said they primarily accessed social media to solicit buying advice from friends and track down neighborhood information.
Facebook pages are also becoming a near necessity for real estate professionals, the survey found. More homebuyers are researching agents via their Facebook pages, causing related Google searches to drop 18 percent in the past year.
And buyers overwhelmingly rely on mobile devices during their house hunts, CAR’s poll shows. More than 90 percent of respondents said they used a mobile device to access the Internet while looking for a home, with searching for comparable prices being the primary reason.

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NEW HOME SALES REACH SIX-YEAR HIGH
New home sales were on the uptick in May, reaching their highest levels since 2008.
The National Association of Home Builders says 504,000 new homes sold across the country, an increase of 18.6 percent from the previous month. New home sales in Western states jumped by 34 percent, second only to the Northeast U.S.
The increase in sales isn’t surprising and demonstrates increasing homebuyer confidence in the market, according to association Chairman Kevin Kelly.
“These numbers are in line with our recent builder surveys, which indicate that more consumers are getting off the fence and coming back into the marketplace,” Kelly said.
(Photo: Flickr/Nick Bastian)

Bay Area Home Price Growth and Sales Volume Cool in May

After several months of solid price and sales volume gains, real estate activity across the nine-county Bay Area slowed a bit in May, though prices were still at their highest levels in nearly seven years.

According to the California Association of Realtors just-released May home sales and price report, the median price for a single-family home in the Bay Area rose a barely noticeable $800 – 0.1 percent – from April to May. The median price currently stands at $768,910, the largest since October 2007.

Year over year, home prices across the region were up 6.9 percent, the first month in 2014 that the rate of annual appreciation has dipped into the single-digit range.

Bay Area sales volume grew by 7.2 percent in May – nowhere near the amounts observed in the previous two months, when home sales jumped by about 30 percent. Still, sales growth in our region was decidedly more robust than it was across the state, where it declined by about half of a percentage point.

Napa and San Mateo were the only Bay Area counties to post double-digit month-over-month price gains in May. At nearly $603,000, Napa County’s median price reached the highest levels recorded since November 2007. San Mateo County prices climbed above $1.1 million, overtaking Marin as California’s most expensive county for homebuyers.

CAR’s data shows that monthly price gains across the rest of the Bay Area were more moderate, ranging from 0.5 percent in Contra Costa and Solano counties to 4.3 percent in Alameda County. Santa Clara was the only local county where home prices decreased from April to May.

The months’ supply of inventory across the nine-county region expanded slightly to 2.5 in May, but the Bay Area real estate market still strongly favors seller – just as it did last spring. By comparison, the MSI across California has grown considerably over the past year and is now nearing a more balanced state.

Buyer demand still far outpaces supply in five of our local counties, which boast the smallest inventory pools in the state. Santa Clara County had the fewest number of homes for sale in California, followed by San Mateo, Alameda, Marin, and San Francisco counties.




(Photo: Flickr/Colin Harris ADE)

Real Estate Roundup: Bay Area Home Prices Could Match Record High Soon

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:

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BAY AREA HOME PRICES COULD SURPASS PEAKS LATER THIS SUMMER

Late last week, we reported that while single-family home prices in some Bay Area counties have already topped their prerecession peaks, the median price across the overall region had yet to reach its 2007 pinnacle. But that milestone could occur as soon as the next few months, according to a new report from DataQuick.
“While some of the Bay Area counties have already re-reached or passed their pre-recession price peaks, the region as a whole is on pace to reach that point later this summer,” DataQuick Analyst John Karevoll said in a statement.
DataQuick’s report, which includes statistics for both single-family homes and condominiums, places the current median price across the nine-county region at $617,000, a gain of 19 percent since last May and the highest since late 2007. The company says the Bay Area’s median price peaked in the summer of 2007, at $665,000.

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NUMBER OF UNDERWATER HOMES PLUNGES IN SANTA CLARA COUNTY
Silicon Valley’s exploding economy has helped drive up home prices in parts of the region, causing more homeowners to regain equity and the number of underwater homes to decrease dramatically.
A recent San Jose Mercury News article says the number of underwater homes in Santa Clara County declined from 136,000 in 2012 to 81,000 in 2013, a 40 percent drop.
“Equity is coming back, and people are breathing a sigh of relief,” David Ginsborg, of the Santa Clara County assessor’s office, told the newspaper. “Properties are worth more than what people paid for it.”
The article notes that southern Santa Clara communities pummeled hardest by the housing – including Gilroy and Morgan Hill — are now leading the county in value gains, thanks in part to a surge in nearby construction activity.

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SAN FRANCISCO NATION’S MOST EXPENSIVE, FASTEST-RISING RENTAL MARKET
Anyone seeking to emigrate from the Big Apple to San Francisco isn’t likely doing it to save a few bucks on rent, a recent Zillow suggests.
In a study published on its blog, Zillow pegged the median monthly rent for a two-bedroom apartment in San Francisco at $3,550, the highest in the U.S. and $50 more per month than in the New York City metro area. San Francisco rents increased nearly 16 percent year over year in May, the largest gains in the country.
While median rents across the Bay in Oakland aren’t quite as preposterous, they’re hardly a bargain at $2,450 per month. Oakland rents have increased by about 11 percent over the past year, the third-biggest jump in the U.S.

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BUYERS’ BIGGEST OPEN-HOUSE BUMMERS
Even in markets where sellers hold the upper hand, there are some definite no-nos to steer clear of during an open house.
USA Today has compiled a list of the top 10 open-house donts for sellers, starting with sage advice to avoid helicoptering around buyers during walk-throughs. You also don’t want a soundtrack, a house that’s too hot or cold, or odors of any kind (and do hide the kitty-litter box while you’re at it).
Also, the article recommends enlisting the services of top-notch real estate professionals you trust to engage with prospective buyers — not ones who spend the entire open house with their nose buried in an iPhone.

Pacific Union CEO Talks about Bay Area Real Estate on Channel 5

Pacific Union CEO, Mark A. McLaughlin, discusses Bay Area real estate conditions, including foreign investment trends and tips for getting your offer accepted in a highly competitive market. The clip comes from a June 1, 2014 interview with Phil Matier on KPIX.

Click Here to View the Interview from Channel 5 KPIX

All-Cash Sales Reach All-Time High

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:
NEARLY HALF OF U.S. HOMEBUYERS PAYING ALL CASH
More buyers than ever before are forgoing financing and paying all cash for homes, according to RealtyTrac’s Q1 2014 U.S. Institutional Investor & Cash Sales Report.
All-cash sales accounted for nearly 43 percent of residential real estate transactions in the first quarter, the highest since the company began recording that statistic in 2011. The number of U.S. buyers paying all cash jumped 24 percent from the first quarter of 2013, and the trend has been particularly prevalent in the Lake Tahoe and Northern Nevada regions, the report notes.
“The cash buyer segment of the Northern Nevada housing market is very strong,” Craig King, COO of Chase International, told RealtyTrac. “More than 50 percent of transactions in our Reno office were cash sales.”
The report also found that while institutional investor activity reached a two-year national low, it increased 92 percent annually in the San Francisco area – the second-largest increase in the country.

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CALIFORNIA SEES BIG MORTGAGE-DELINQUENCY DROPS
Mortgage-delinquency rates across the U.S. were at their lowest levels in nearly six years in the first quarter, with large declines in California helping to buoy the national recovery.
TransUnion’s most recent mortgage report shows that U.S. mortgage delinquencies dropped 24 percent year over year in the first quarter, the ninth straight quarter of decreases. Currently, the national mortgage-delinquency rate stands at 3.6 percent.
California posted annual mortgage-delinquency declines of about 37 percent, the second highest in the country. TransUnion says that while California’s delinquency rate was double the national average five years ago, it has fallen to 2.8 percent to outpace the rest of the country.

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PACIFIC HEIGHTS HOME SELLS FOR 70 PERCENT MORE THAN LIST PRICE
While multiple offers and overbids are commonplace in San Francisco, one homebuyer in the city’s prestigious Pacific Heights neighborhood has taken things to what some might call illogical extremes.
As Curbed reports, the two-bedroom home at 2514 Gough Street sold for $3.4 million, an astonishing 70 percent above its initial asking price of $2 million. Built in 1941, the home features amenities such as a gated courtyard entry, a Japanese rock garden, and a patio and garden area.
By comparison, the average San Francisco homebuyer paid about 10 percent above asking price for a single-family home in April, according to Pacific Union’s most recent monthly real estate report.

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AMERICANS BULLISH ON HOUSING AND JOB MARKETS
More Americans than ever believe now is a good time to sell a home, according to Fannie Mae’s April 2014 National Housing Survey.
Forty-two percent of survey respondents told Fannie Mae that the current market is right for sellers, which the company says is a record high. Only 5 percent of those surveyed felt that housing prices would decline in the next year, the study’s all-time low.
Just 12 percent of Americans reported having a smaller income than they did a year ago, also the lowest level Fannie Mae has recorded. The report notes that fewer people are worried about losing their jobs, which may attract more buyers to the housing market.
“Consistent with Friday’s upbeat jobs report, concern about job loss among employed consumers also has hit a record survey low,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a statement. “These results are in line with our expectations for increased housing activity and gradual strengthening of the housing market going into the spring and summer selling season.”


(Photo: Flickr/401(K) 2012)

Bay Area Median Sales Price at Highest Level in More Than Six Years

A lack of inventory pushed the March Bay Area median sales price to its highest level since 2007, but the shortage also held back the number of properties sold.

The median sales price across the nine-county region jumped 23.2 percent from a year earlier to $579,000, according to figures released this week by the research firm DataQuick. That’s the highest since December 2007, when the median was $587,500.

The numbers show median sales prices have now climbed to three-quarters of their precrisis zenith.

The Bay Area median peaked at $665,000 in the summer of 2007, then dropped to a low of $290,000 in March 2009 amid the nationwide recession.

Since then, the median has increased on a year-over-year basis in each of the last 24 months.

Every Bay Area county posted double-digit year-over-year median price increases in March, ranging from 13.5 percent in San Mateo County to 30.4 percent in Solano County. Across the nine counties, all-cash deals made up 25 percent of all transactions, down 3 percent from February and 6 percent from last March.

Like all-cash purchases, Bay Area sales volume declined year over year, falling by 12.9 percent. The 6,308 homes sold make last month the slowest March since 2008.

Solano County had the biggest drop-off in transactions, 28.3 percent, while Napa County posted the smallest decline at 8.5 percent. In San Francisco sales volume expanded by 8.2 percent, the only Bay Area county where buyers purchased more homes than they did the previous March.

So just how tight is inventory in the Bay Area as the spring buying season heats up? According to MLS data as of April 16, the months’ supply of inventory for single-family homes declined year over year in six of Pacific Union’s eight Bay Area regions in March. Generally speaking, an MSI between 4.0 and 6.0 is considered a balanced market, with numbers above 6.0 favoring buyers and those below 4.0 slanted toward sellers.

The chart below breaks down the yearly MSI change in each of our Bay Area regions for single-family homes:



DataQuick closed its report by noting that our region’s housing market continues to recover, pointing to factors such as a yearly drop in foreclosures, a low rate of multiple mortgages, and stable down-payment amounts.



(Image: Flickr/Woodleywonderworks)

Bay Area home prices projected to surge

Almost every corner of the Bay Area is poised for robust home-price appreciation this year in a surge that will outpace projected national growth, according to a forecast from real-estate information site Zillow.com.

 Link to Original Image

Looking at 245 Bay Area ZIP codes, Zillow projects that 244 will see home values ratchet up by significant margins in 2013, with 27 ZIPs seeing double-digit appreciation. Only one of the ZIPs analyzed - 94515 in Calistoga - is forecast to see values recede, by a modest 1.4 percent.
"The forces of supply and demand seem to be exacerbated here right now," said Svenja Gudell, senior economist with Zillow in Seattle. "We're happily surprised by how well (the market) is doing and how much it's picking up steam."
Strikingly, some of the strongest percentage increases are likely to happen in both the cheapest and the priciest areas in the nine-county region, Zillow predicts. Low-end Solano County markets such as Vacaville, Fairfield, Dixon and Suisun City, where values plunged during the real-estate downturn and are still half off their peaks, should see values bump up by more than 14 percent - admittedly easier to do off a low base.
At the same time, Portola Valley, Atherton and Palo Alto - with million-dollar-plus median values that now exceed their boom-time heights - should see appreciation above 12 percent, Zillow said.
Popular San Francisco neighborhoods such as Noe Valley, the Castro, Twin Peaks, the Mission and Bernal Heights are poised for double-digit appreciation, along with Menlo Park, Larkspur, Palo Alto, Alameda and North Berkeley, Zillow predicts.

Regaining value

One major way that the low-cost and high-end markets diverge is in where values are now relative to their peak. Zillow shows 25 ZIP codes where values have regained all the value lost during the downturn and then some. All are in pricey Silicon Valley or San Francisco neighborhoods where the median price is around $1 million. Meanwhile, about 100 ZIP codes are still 30 percent or more below their peaks - all in hard-hit, lower-end communities in Solano, Alameda and Contra Costa counties.
For the San Francisco metropolitan area (the counties of San Francisco, San Mateo, Marin, Alameda and Contra Costa), Zillow projects that that values will rise 7.3 percent this year, more than double its predicted 3.3 percent national increase. The San Jose metro area (Santa Clara and San Benito counties) should rise 6.6 percent, it said.
"That is a really great number in the San Francisco metro," Gudell said. "It is rather special compared to the U.S. as a whole."
Zillow's projections take into account both long-term historical trends back to 1997, as well as current data on how markets have behaved in recent months. It also factors in information on employment, income and other economic factors to predict what housing values might do, she said.

Can't meet demand

Every market around the Bay Area - whether low-end, high-end or somewhere in the middle - now has one outstanding characteristic that is driving up prices: too few homes for sale to meet buyer appetite.
"There is no place where we see a steeper decline in listed homes (for sale) than the Bay Area," said Lanny Baker, CEO of ZipRealty in Emeryville, which has agents throughout the Bay Area and the country. "This time last year there were 13,000 homes listed here. Today we see about 5,000 homes - a 60 percent reduction."
Moreover, the mix of homes being sold has changed dramatically, something that particularly affects lower-end markets such as Solano County. Far fewer bargain-priced, bank-owned foreclosures are on the market.
In the low-cost markets, investors waving fistfuls of cash are snapping up properties, usually to keep as rentals, sometimes to flip. In the high-end markets, it's tech millionaires - armed with far bigger wads of cash - who are jostling to live in homes in Silicon Valley or San Francisco.
"As soon as something new hits the market, it's snapped up," said Sandy Rainsbarger, an agent with ZipRealty in Vacaville. That town's 95688 ZIP, where the median value is now $287,900, is projected by Zillow to see values rise 17.1 percent this year - the biggest price appreciation in the Bay Area. "There are multiple offers on every single property."

Buyers pushed aside

Meanwhile, "regular" buyers, especially first-time home buyers who are relying on Federal Housing Administration mortgages, are finding themselves shoved aside time after time in frenzied bidding wars.
"The Bay Area is one of the fastest-moving markets in the country," Baker said. "We see houses sell on average in 26 days here. One statistic we look at is what percentage of homes sell in just seven days; that's like a red alert. If it gets to 15 percent, we know we're in a zany market. In the Bay Area, it's at 13 percent. In Sacramento, 25 percent of homes sell in less than seven days.
"I think throughout this year, we'll see Bay Area markets continue to be very, very strong," Baker said. "On the lower end, the specter of foreclosures and 'Gosh, nobody's ever going to want to live this far out' has washed away, and there is more confidence in values recovering.
"On the high end, we've got Silicon Valley and the tech economy doing really well."





Article & Map sourced from:  http://www.sfgate.com/realestate/article/Bay-Area-home-prices-projected-to-surge-4288392.php?cmpid=twitter#photo-4215782

Real Estate Roundup: San Franciscans Say Homebuying Cost Is City’s No. 1 Issue

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:

HOMEOWNERSHIP COST CHIEF CONCERN IN SAN FRANCISCO

For the past two years, the always-hot-button issue of homelessness topped San Franciscans’ list of concerns. But in 2014, city denizens point to the cost of home ownership as their first and foremost worry.

SFGate reports that a survey conducted by the San Francisco Chamber of Commerce found that 34 percent of residents think housing affordability is the most important issue the city faces, up from 20 percent in 2013. Along the same lines, skyrocketing rental costs are the No. 2 concern, with 21 percent of respondents noting it as a concern.

As our region’s robust economic recovery continues, San Francisco residents are less worried about job growth this year than last: 18 percent now cite it as an issue, down from 23 percent in 2013.

HALF OF BAY AREA BUYERS PAY MORE THAN LIST PRICE

Buyers in the San Francisco and San Jose metropolitan areas were more than twice as likely to pay over asking price than those in other parts of the country, according to research from Redfin.

In January, 53.3 percent of houses in San Jose sold for above asking price, while exactly 50 percent of San Francisco sales involved overbids. Across the 22 U.S. regions included in Redfin’s study, 22 percent of homes sold for more than list price in January.

Redfin also found that bidding wars became more common in the first month of the year. The company says that 58.1 percent of offers written by its agents faced competition, up 5.3 percentage points from December. Still, the report notes that the market is not quite as hectic as it was at one point last year, when 70.4 percent of buyers faced bidding wars.

HOME INVENTORY: UP NATIONALLY BUT DOWN LOCALLY

Home inventory across the U.S. was up 11.1 percent year over year in January, according to Zillow’s January Real Estate Market Reports. The increased options for buyers helped slow price appreciation to 0.2 percent from December, the smallest monthly increase since May 2012.

Meanwhile, inventory shrank in two Bay Area metro regions. In San Jose, inventory was down 5.9 percent from the previous January; in San Francisco, the number of available homes for sale declined 1.8 percent.

Zillow’s January Home Value Index ranked homes in the San Jose region as most valuable in the country at nearly $745,000, a month-over-month increase of 0.2 percent. The San Francisco area was not far behind, with an average home value of more than $642,000, up 0.4 percent from December.

CALIFORNIA FORECLOSURE STARTS SPIKE IN JANUARY

Foreclosure starts rose across the country in the first month of 2014, and in California, activity was particularly busy.

RealtyTrac’s U.S. Foreclosure Market Report shows that U.S. foreclosure activity increased 8 percent from December to January, the largest monthly increase in almost two years. On the bright side, foreclosures are still down 18 percent year over year and have declined annually for 40 straight months.

California was one of 22 states where January foreclosure starts grew on a year-over-year basis. The Golden State had the fourth highest yearly foreclosure-start jump in the country: 57 percent. January marked the first month that foreclosures increased in California after 17 consecutive months of decline.

(Image: Flickr/Phil Gibbs)

Bay Area Home Prices Highest in U.S. in Fourth Quarter

A pair of recent reports – one from the National Association of Realtors and another from a Southern California real estate consulting firm – recount an exceptional 2013 in Bay Area residential real estate and deliver an optimistic forecast for the coming year.
According to NAR’s recent fourth-quarter report, two Bay Area metropolitan areas led the country in terms of median sales price as 2013 drew to a close. The San Jose area had the highest median single-family home sales price in the U.S., at $775,000, while San Francisco ranked No. 2 at $682,400. Two of the other top five priciest housing markets were also in California.
San Jose and San Francisco both posted double-digit year-over-year price hikes, along with 40 other U.S. markets of the 164 included in the report. Prices grew by 15.0 percent in San Francisco and 13.1 percent in San Jose.
NAR chief economist Lawrence Yun said that slim inventory was responsible for the double-digit appreciation in many markets, adding that new home construction could help alleviate rising prices.
A short supply of available homes and vigorous price growth across Northern California also took center stage in the January 2014 Regional Analysis and Forecast published by John Burns Real Estate Consulting.
The report divides the country into 10 regions and ranks each based on a combination of five factors: job growth, resale transaction volume, resale supply, supply of unsold homes, and year-over-year price gains. As of January, the report puts Northern California as the No. 1 real estate market in America, up one position from the previous month.
According to the company, Northern California leads the country in smallest months’ supply of inventory for both resale and unsold homes: 1.9 and 0.6, respectively. Constrained inventory appears to have heavily affected home resale activity in the East Bay market, which the report says had the smallest resale volume in the country for the trailing twelve months ending November 2013.
Northern California was one of just three markets that the report believes is heading up, noting healthy price appreciation and employment growth as particular strengths.
Our overall region was tied for first place when measuring year-over-year home price growth, which the Burns report places at 20 percent. Additionally, the company ranks two Bay Area subregions within the top 10 in the country for year-over-year job growth: San Jose and San Francisco each added nearly 27,000 jobs over the past year, gains of 3.0 and 2.7 percent respectively.