Home Prices Are Relaxing in Silicon Valley’s Most Expensive Pockets

Although Silicon Valley still ranks among the country’s most expensive places to buy a home, prices in the region are leveling off, with Atherton losing its title as the priciest ZIP code in the U.S.

That’s according to Forbes’ latest annual rankings of America’s most expensive real estate markets, which places two Silicon Valley ZIP codes — one in Atherton and one in Los Altos Hills — among the country’s 10 priciest. The study includes both single-family homes and condominiums using a rolling average for the 90-day period ending Nov. 18. ZIP codes with fewer than 10 homes for sale were not included, which the report says eliminated some expensive Northern California enclaves.

Atherton’s 94027, which had ranked as the country’s most expensive ZIP code for the past three years, fell to the No. 3 spot, with a median list price of $7.2 million. With homes listing for $6.08 million, Los Altos Hills‘ 94022 is America’s eighth most expensive ZIP code, up three spots from last year’s list.

Prices have cooled significantly in Atherton, where homes listed for $10.56 million last year. Pacific Union Silicon Valley real estate professional Carol MacCorkle told Forbes that fewer homes at the highest end of the Atherton market — those priced in excess of $20 million — have sold this year when compared with last year. At the lower end of the market, properties in the affluent town are no longer the subject of bidding wars and are staying on the market longer.

Hillsborough‘s 94010 ZIP code ranks No. 16, with a median list price of $5.08 million. With homes listing for $4.78 million, 94062 in Woodside places No. 20. Last year, Forbes ranked both of those ZIP codes in the top 10.

Relaxing prices are evident in other parts of Silicon Valley and the Bay Area, with local ZIP codes slipping down this year’s list from 2015. Palo Alto‘s 94301 dropped from No. 36 in 2015 to No. 48, with a median list price of $3.59 million. After finishing at No. 13 last year, Belvedere‘s 94920 fell to the No. 54 spot. ZIP codes in San Francisco, Tiburon, Los Altos, Kentfield, Saratoga, and Los Gatos also ranked lower on this year’s list than last year’s.

A recent analysis by Pacific Union Chief Economist Selma Hepp illustrates the slowdown that some Silicon Valley markets have seen, with Palo Alto, Menlo Park, Los Altos, Belmont, and Saratoga all seeing annual home price declines. At the same time, more affordable cities — including East Palo Alto — have seen home price appreciation in excess of 15 percent.

Article and images sourced from http://blog.pacificunion.com/home-prices-are-relaxing-in-silicon-valleys-most-expensive-pockets/

Real Estate Roundup: Bay Area Homes Are Selling Faster Than Anywhere Else

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

SAN FRANCISCO, SAN JOSE ARE THE NATION’S QUICKEST-PACED HOUSING MARKETS
The Bay Area’s well-documented inventory crunch is ensuring that serious homebuyers waste little time making deals this fall, with the San Francisco and San Jose metro area housing markets moving at the fastest pace in the nation.

That’s according to inventory data from the National Association of Realtors, which says that U.S. homes sold in an average of 79 days in October. At the end of the month, there were 2.02 million existing homes for sale, down 4.3 percent on an annual basis.

Bay Area homes are selling more than twice as fast as they do nationwide — 35 days in San Francisco and 37 days in San Jose. And in certain local submarkets, the pace of sales is even quicker. MLS data from Pacific Union’s October Real Estate Report shows that single-family homes in our East Bay region sold in an average of 17 days.

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BAY AREA HOME SALES DOWN BY DOUBLE-DIGIT PERCENTAGE POINTS IN 2016
Home sales have decreased across the Bay Area so far this year, particularly at the lowest end of the market, and more cooling appears to be in store for next year.

Citing data from PropertyRadar, The Mercury News reports that home sales across the region dropped by 10.3 percent from January to September of this year. San Francisco saw the largest declines, at 13 percent, while sales sunk by 11.3 percent in Alameda County and 10.1 percent in Santa Clara County.

Along with constrained inventory, fewer distressed properties on the market are contributing to cooling sales. Distressed sales in the Bay Area dropped by 35.7 percent in the first nine months of the year. The shortage of distressed properties, which typically fall below the $500,000 price point, is further eroding affordability across the region, which could translate to another year of sluggish sales in 2017.

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ONE-THIRD OF HOME SHOPPERS SEEK FORMAL OFFICE SPACES
Here’s another factor to consider when staging a property: A home-office space will appeal to a significant portion of potential buyers and likely increase its price.

A recent report from John Burns Real Estate Consulting documents the rise of telecommuting and how it affects demand for home offices. The company says that 39 percent of new home shoppers work from their houses at least one day per week and that almost one-quarter of Gen Xers work out of their homes at least three days per week.

JBREC’s survey found that one-third of buyers want a formal home office, with younger buyers more likely to prefer this amenity. As many homebuyers born in the 1970s and 1980s have young families, a space with a door helps them better concentrate and participate in conference calls. The majority of respondents to the poll indicated they would pay a premium for a home with a dedicated work space.

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FEWER AMERICANS MOVING THAN EVER BEFORE
The number of Americans who moved their residence has dropped to an all-time low this year, although quite a few Californians packed their bags for the Lone Star State.

RIS Media reports that just 11.2 percent of the population moved domestically this year, even with a solid housing market and economy. Consistent with other reports, the Golden State’s expensive real estate market and high cost of living are pushing some residents to cheaper places; this year, more than 65,000 Californians moved to Texas.

Other residents appear to be fleeing high-cost urban counties for the suburbs, particularly in Southern California. In 2016, almost 40,000 people have left Los Angeles County and migrated to neighboring Orange and San Bernardino counties.

(Photo: Flickr/Bunches and Bits {Karina})

Article and images sourced from http://blog.pacificunion.com/real-estate-roundup-bay-area-homes-are-selling-faster-than-anywhere-else/

Real Estate Roundup: Bay Area Rental Home Investors Can Score Nice Winter Bargains

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

A WINTER WINDOW OF OPPORTUNITY FOR SAN FRANCISCO REAL ESTATE INVESTORS
With the holiday season waiting in the wings, many Bay Area home shoppers typically call off their searches until the new year. But for investors in the market for a rental property, the upcoming weeks could be the ideal time to buy.

That’s according to a new study by HomeUnion, which ranks U.S. real estate markets based on those that offer the best seasonal bargains for investors. Nationwide, single-family rental investors typically pay 7.2 percent less per square foot during the winter than they do in spring and summer and also see a slightly higher cap rate. Real estate activity drops in the winter in some cold-weather cities while rent losses are marginal, and investors also face less competition from families seeking to buy homes in a favorable school districts.

Relatively mild winter temperatures aside, San Francisco ranks as the nation’s second best seasonal market for rental investors, with cap rates increasing by 21.8 percent during the winter months. San Francisco landlords who buy a property over the next few months can expect to pay a median price of $920,000 compared with $1,200,000 this past summer.

Investors in San Jose and Oakland also see cap-rate increases in the winter, a respective 11.1 and 9.4 percent. Single-family rentals are selling for $308,000 less than they did in San Jose this summer and $117,000 less in Oakland.

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CALIFORNIA: HOME TO THE NATION’S MOST EQUITY-RICH HOMEOWNERS
Rising home prices continue to restore equity to more U.S. homeowners, with Californians doing particularly well in that respect.

ATTOM Data Solutions’ most recent Home Equity and Underwater Report says that there were more than 13 million equity-rich homeowners across the country at the end of the third quarter, representing 23.4 percent of mortgage holders. The company defines equity-rich homeowners as those that have at least 50 percent equity in their homes.

Four of the country’s five most populous states — California, Texas, Florida, and New York — were also in the top five for the number of equity-rich homeowners. The Golden State has more than 2.9 million equity-rich homeowners, a 7 percent gain from the third quarter of last year. California ranks second only to Hawaii for the number of equity-rich homeowners, at 35.7 percent.

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MORTGAGE RATES SOAR AS THE DUST SETTLES FROM THE ELECTION
Mortgage rates ballooned last week in the wake of the U.S. presidential election, which could make for a flurry of activity followed by a slowdown.

According to Freddie Mac data, 30-year, fixed-rate mortgages average 3.94 percent for the week ended Nov. 17, up from 3.57 percent a week earlier. In a statement accompanying the report, Freddie Mac Chief Economist Sean Becketti said that he expects a final blitz of home sales and refinances as buyers try to beat intrest-rate hikes, then a pronounced cooling in the market.

At last week’s Pacific Union Real Estate and Economic Forecast to 2019, company CEO Mark A. McLaughlin demonstrated how rising interest rates could impact affordability in the Bay Area. Assuming a 4 percent fixed interest rate on a 30-year mortgage, about 25 percent of Bay Area households can afford a $1 million mortgage. If interest rates rise to 5 percent, the number of households who can afford that $1 million mortgage drops to 20 percent; if rates rise to 6 percent, affordability further erodes to 16 percent of the population.

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UNEMPLOYMENT-BENEFIT CLAIMS AT LOWEST LEVEL SINCE THE 1970S
Amidst a U.S. economy that is still booming despite the political uncertainty that surrounds elections, the number of people receiving unemployment benefits has dropped to its lowest levels in 40 years.

In a press release, The U.S. Department of Labor says that there were 235,000 initial unemployment benefit claims for the week ended Nov. 12, the lowest level since November 1973. Claims have been below 300,000 for 89 consecutive months, the longest such streak since 1970.

The U.S. economy added 161,000 new jobs in October, with the unemployment rate declining to 4.9 percent. According to the latest numbers from the California Employment Development Department, the state’s unemployment rate remained at 5.5 percent on a seasonally adjusted basis for the fourth consecutive month in October.

(Photo: Flickr/thefuturistics)

Article and images sourced from http://blog.pacificunion.com/real-estate-roundup-bay-area-home-investors-can-score-nice-seasonal-bargains/

Pacific Union’s October 2016 Real Estate Update

The first month of the fourth quarter was a typically busy time for Bay Area real estate markets, with the months’ supply of inventory (MSI) declining or holding steady from September across the majority of Pacific Union’s regions. The exceptions were the Mid-Peninsula and Napa County, where the number of single-family homes for sale increased slightly, and the Lake Tahoe/Truckee region, where more sellers listed their properties in advance of the upcoming ski season.

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

MARIN COUNTY

The number of homes for sale in Marin County declined on both a monthly and yearly basis, ending October with a 1.4-month supply of inventory. At $1,249,000, the median sales price wasn’t far off from the preceding eight months.
Homes sold in an average of 49 days, one day longer than in August and September, and buyers paid 98.2 percent of original prices.
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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SAN FRANCISCO – SINGLE-FAMILY HOMES

The median sales price for a single-family home in San Francisco hit a yearly high in October, closing out the month at $1,410,000. Sellers took home 103.6 percent of original prices, a bit less than in September.
At an average 28 days on the market, homes sold almost two weeks faster than they did in the preceding month, while the MSI fell to 1.7.

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SAN FRANCISCO – CONDOMINIUMS

The median sales price for a San Francisco condominium has stabilized over the past year and finished October at $1,164,000. Properties have been commanding premiums for the past year and that trend continued in September, with condominiums selling for 102.2 percent of asking prices.
Month over month, the MSI inched down to 2.7 but was up from October 2015. The pace of sales quickened for the second month in a row, with units taking 37 days to leave the market.

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SILICON VALLEY

Although Silicon Valley is still the Bay Area’s most expensive real estate market, the median price relaxed on both a monthly and annual basis to $2,610,000. The MSI declined to 1.6, down on a monthly and yearly basis.
Homes sold in an average of 39 days, more than double the amount of time from one year earlier. Buyers paid 96.9 percent of original prices, the seventh consecutive month that homes have sold for less than 100 percent.
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
With a 1.4-month supply of inventory in October, the number of homes for sale in our Mid-Peninsula subregion was consistent with levels recorded for most of 2016. Although the pace of sales has been slowing somewhat, homes still found a buyer in exactly four weeks.
The median sales price increased modestly from September to $1,662,500. Buyers paid 96.1 percent of asking prices, the first month in at least a year with no average premium.
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.


Article and images sourced from http://blog.pacificunion.com/pacific-unions-october-2016-real-estate-update/

San Francisco Again Named Nation’s Hottest — and Quickest-Paced — Housing Market in October

U.S. homes sold slightly quicker this year in October than they did one year ago, particularly in San Francisco, which once again ranks as the country’s hottest real estate market.

Realtor.com’s latest analysis of the 20 most in-demand places for home shoppers pegs San Francisco as the hottest U.S. market in October, based on the fastest pace of sales as well as the most listing views on its website. The City by the Bay ranked as the nation’s hottest market in September and for most of the past year and a half, although the Vallejo-Fairfield metropolitan area claimed the top spot for four consecutive months earlier this summer.

Homes in the San Francisco metropolitan area — which includes Oakland, Hayward, and surrounding communities — found a buyer in an average of 34 days in October, the fewest days on market of the 20 cities included in the report. Realtor.com did not include this statistic for individual submarkets for the past few months, but its October 2015 analysis of the same kind found that homes in San Francisco sold in an average of 33 days. With a median list price of $830,000 last month, San Francisco properties are hitting the market 7.8 percent higher than they did one year earlier.

Vallejo fell one spot from September to the No. 3 position. Homes in the Solano County suburbs are selling in an average of 45 days at nearly half the price as in San Francisco, listing for an average of $420,000.

California real estate markets have dominated Realtor.com’s hot list since its inception, and October brought more of the same, with 11 of the state’s cities finding the top 20. San Diego ranked No. 6, followed by San Jose (No. 7), Stockton (No. 9), Modesto (No. 11), Santa Rosa (No. 13), Sacramento (No. 14), Eureka (No. 15), Fresno (No. 17), and Santa Cruz (No. 20). San Jose and Santa Cruz were the hot-list’s two most expensive markets, with respective median list prices of $907,000 and $863,500.

Continued intense competition for California homes mirrors national trends, as the U.S. median list price rose 8 percent on an annual basis to $250,000, a new peak for October. In a statement accompanying the report, Realtor.com Chief Economist Jonathan Smoke says that demand for real estate is stronger than usual this fall, causing inventory to drop by 11 percent since October 2015 and homes to sell 2 percent faster.

(Photo: Flickr/Chris Chabot)

Article and images sourced from http://blog.pacificunion.com/san-francisco-again-named-nations-hottest-and-quickest-paced-housing-market-in-october/

Real Estate Roundup: Rising Home Sales and Prices Projected for 2017

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

2017 FORECAST: STEADY RISE IN HOME SALES, PRICES 
Next year will see steady growth in existing-home sales and prices, with stronger growth in 2018, according to the latest forecast by real estate analysts — boosted by a greater number of millennials entering their prime homebuying years, rising household formation, and continued job growth.

Forecasts for the coming year were a highlight of the National Association of Realtors’ annual Conference & Expo, held last week in Orlando, Florida. NAR analysts expect sales to grow  by 2 percent to 5.46 million in 2017, followed by 4 percent growth in 2018. The national median existing-home price is expected to rise by 4 percent next year.

NAR Chief Economist Lawrence Yun said that tight supply and affordability problems currently facing buyers in many markets will gradually ease next year.

“NAR surveys from both current renters and recent buyers prove that there’s an overwhelmingly strong desire among the younger generation to own a home of their own,” Yun said in a statement. “The housing market over the next couple of years should get a big lift in demand from these new buyers. The one caveat is it’s essential that there’s enough new and existing supply at entry-level prices for them to reach the market.”

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SAN JOSE, SAN FRANCISCO SELLERS LEAD U.S. IN HOME PRICE GAINS 
U.S. homes sold for an average of 23 percent above their purchase prices in the third quarter of 2016, the highest gain in nine years. And the news is even better in the Bay Area, where homes in the San Jose area sold for 68 percent above their purchase prices and 67 percent in the San Francisco area.

San Jose and San Francisco once again led the nation in home price gains, according to data compiled by ATTOM Data Solutions. They were followed by Portland, Oregon and Seattle (tied at 51 percent) and Los Angeles (49 percent).

The company’s Q3 Home Sales Report also showed that distressed sales nationwide fell to a nine-year low of 12.9 percent of all sales. All-cash purchases also fell to a nine-year low, to 25.9 percent of all sales, down from a peak of 44.8 in 2011.

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MILLENNIAL HOMEBUYERS TURN TO REFINANCING
Millennial homebuyers are growing in number, and they’re increasingly choosing to refinance their homes, too. That’s the news from mortgage software provider Ellie Mae, which released its monthly Millennial Tracker report last week.

Refinances accounted for 20 percent of all closed loans by millennial borrowers in September, up from 17 percent in August, the company said. Eighty percent of millennial loans were for home purchases, compared with 54 percent overall for U.S. borrowers.

Other findings from the September Millennial Tracker report:

• The average FICO score for millennial borrowers rose to 726 in September.
• The average interest rate on home loans continued declining, to 3.728 percent.
• The average loan amount increased to $184,179, up from an average of $181,326 in August.

“As the average rate on home loans continues to decline, we are seeing millennials with more purchase power, indicated by the average loan amount increase,” Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae said. “We’re also seeing a slight uptick in the number of refinances in September, indicating maturity among those millennials who previously purchased a home and are looking for an opportunity to lower the cost on their existing mortgage.”

(Photo: Flickr/SoulRider.222)

Article and images sourced from http://blog.pacificunion.com/real-estate-roundup-rising-home-sales-prices-in-2017/

Real Estate Roundup: U.S. Annual Income Growth Climbs to 50-Year High

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

HOUSEHOLD INCOME GROWTH SEES SIGNIFICANT ANNUAL GAIN
The average American worker got a much-needed monetary boost last year, though incomes have not yet returned to their prerecession highs.

Citing data from the U.S. Census Bureau, The Wall Street Journal reports that the median household income increased by 5.2 percent from 2014 to 2015 to $56,516. That’s the largest annual gain since 1967 but still 2.4 percent below the record high U.S. incomes of 1999. Incomes are 1.6 percent below their precession levels of 2007 and may surpass them next year at the current growth rate.

The news comes on the heels of an analysis by CNBC, which found that incomes in Silicon Valley grew by more than 20 percent from 2009 to 2014. The Bay Area is home to most of the highest-paying companies in the nation, with the overwhelming majority in the technology sector.

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SAN FRANCISCO NEW HOMES SHRINKING OVER THE PAST CENTURY
Although the average U.S. new home size is much larger than it was 100 years ago, square footage in San Francisco has become more scarce.

In a recent analysis, PropertyShark.com found that homes and condominums built with in the past six years are 74 percent larger than those built in the 1910s. The average new U.S. home is now 2,430 square feet, with the majority of large metro areas seeing double-digit-percent size gains from a century earlier.

San Francisco is one of four U.S. markets where new homes today are smaller than they were way back then. Since the 1910s, home sizes have shrunk by 28 percent in the City by the Bay, the largest declines in the country. The average new home in San Francisco is 1,150 square feet, second only to Boston for smallest in the nation.

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HOW HAPPY ARE BAY AREA RENTERS?
Satisfaction levels among Bay Area renters vary widely, although its most expensive city earns high marks from tenants.

That’s according to Apartment List’s annual renter confidence study, which polled 30,000 tenants nationwide and graded cities based on 10 different criteria, including affordability, access to public transportation, and job opportunities. Although San Francisco is the nation’s most expensive rental market, tenants there are pretty content, with the city earning an overall grade of A-minus. Other Bay Area rental markets with an A rating include Berkeley, Daly City, and Sunnyvale.

Renters in other parts of Silicon Valley are more lukewarm about their situations, with Santa Clara and San Jose receiving a C and a C-minus, respectively. Renters in three Bay Area cities are downright disgruntled; Oakland, Richmond, and Concord all come away with an F.

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MILLENNIAL HOMEOWNERSHIP RATE WILL KEEP FALLING
Much has been written about low homeownership rates among the youngest generation of homebuyers, and one respected real estate analyst sees that trend continuing for the next decade.

CNBC reports that homeownership rates for those under the age of 35 has dropped by 21.2 percent since 2004, the biggest decline of any demographic. John Burns of John Burns Real Estate Consulting told CNBC that he expects homeownership among millennials to continue declining until 2025.

Burns also predicts a nationwide decrease in homeownership across all demographics over the next decade. By 2025, about 60 percent of the population will own homes, the lowest level since the 1950s.

(Image: Flickr/FutUndBeidl)

Article and images sourced from http://blog.pacificunion.com/real-estate-roundup-u-s-annual-income-growth-climbs-to-50-year-high/

Bay Area Home Styles: Spotlight on the Edwardian

Edwardian-style homes in San Francisco.

This is the sixth installment in a series of bimonthly posts about architecture styles, each dedicated to a popular home type that can be found in the Bay Area.

The Edwardian architectural style gained popularity in the early 1900s (approximately 1901-1914).  The style is named in correspondence with and in honor of the reign of King Edward VII of the United Kingdom, Queen Victoria’s son. The well-known and easily identifiable Victorian home actually refers to a style born during her reign (1837–1901).

The Edwardian-style home takes influences from Victorian, Art Nouveau, Georgian, and Arts and Crafts architecture. In fact, the popular Craftsman-style home was being built at nearly the same time (1905-1929) as the Edwardian.

What makes an Edwardian an Edwardian? For one, it relaxed the heavy, ornate style used in Victorian architecture. Edwardian homes brought back a simpler, classic look but still included external decorative touches to reflect wealth. Generally, Edwardian houses were painted lighter colors and featured less complex ornamental patterns, both inside and out. While the Victorian was filled to the brim with furniture and decorative elements, the Edwardian was all about less clutter. These homes were built at a time when gas and electricity were being introduced to dwellings, and this is reflected in the lighter, airy style.

Inside, the Edwardian was fresh and light, with floral patterns and pastel colors. Bamboo and wicker furniture was used, ceilings were tall, wallpaper was cheerful, and fireplaces were smaller. Stained glass was still prevalent, but woodwork was generally less elaborate.

According to the Bold Italic in its Guide to San Francisco Architecture, “Edwardian homes are highly concentrated in areas that were rebuilt after the fire, such as in the south of Market, downtown, and Mission neighborhoods.” And, according to a The Culture Trip article, “There are actually more Edwardian-style homes in San Francisco than the famed Victorians.” Again, this is due to the 1906 earthquake and fire that destroyed so many homes in the city.

Is it a Victorian or an Edwardian? SFGate helps break down the difference in styles in this blog post. And this Know Your Architectural Styles article from Curbed SF links to a great visual timeline.

Many public buildings that were constructed in the British Empire during the Edwardian era used the Edwardian Baroque style. Its characteristics draw from the style of Sir Christopher Wren (England, 17th century) and French architecture of the 18th century. Sometimes this architecture is referred to as “Wrenaissance” style. Hallmarks of Edwardian Baroque include rusticated facades, arched openings, domed corner rooftop pavilions, and grand central columns. Large, open spaces were common. Click here for a list of examples of Edwardian Baroque architecture from around the world.

If you are a house hunter looking to purchase an Edwardian-style home, we wish you luck on your royal chase. If you are currently living in an Edwardian, congratulations on your classic — and classy — residence.

Article and images sourced from http://blog.pacificunion.com/bay-area-home-styles-spotlight-on-the-edwardian/