Clients, Friends & Family, please join me for the San
Jose Veterans Day Parade, on Saturday, November 11th. It is one of
the largest and most entertaining venues in the country. Please feel free to
Google Veterans Council of San Jose for a
preview. This year I will be in charge of the grandstand where VIP’s will be
seated. The festivities will begin at 11:00am and will end at approximately 12:30pm.
The grandstand is located right in front of The Hilton Hotel, Downtown San
Market Street will be closed. I recommend you park at the
high rise lot on Park Avenue where the restaurant Scott’s Seafood is located.
Walk a half block to Market Street and please look for me. Please email me at email@example.com if you
are planning on attending so that I can reserve a seat for you and your family.
Have a reflective and positive Veterans Day Weekend, Hope to
see you there!
September’s median single-family home price in
the nine-county Bay Area was $852,230, up 11.5 percent year over year
Bay Area home sales dropped by 14.2 percent from
August and 4.2 percent year over year, and future declines are expected for
areas affected by wildfires.
The months’ supply of inventory fell both
statewide and in the Bay Area from September of last year.
Despite fewer properties on the market than there were at
the same time last year, California home sales increased modestly in September.
Here in the Bay Area, which has the state’s most severe inventory drought, the
opposite held true, as sales dropped throughout much of the region.
The latest monthly home sales and price report from the
California Association of Realtors says that there were 436,920 existing
single-family home sales on a seasonally adjusted annualized rate in September,
a gain of 2.2 percent from August and 1.7 percent higher year over year. In the
nine-county Bay Area, sales declined by 14.2 percent from the previous month
and 4.2 percent from September of last year.
In a statement accompanying the report, CAR President Geoff
McIntosh said that he expects sales to further recede this year in areas
affected by wildfires, including Napa and Sonoma counties. In September, home
sales were down on an annual basis by 12.4 percent in Napa County and 0.5
percent in Sonoma County.
California’s median single-family home price ended September
at $555,410, down slightly from August but up 7.5 percent year over year. In
the nine-county Bay Area, the median sales price was $852,230, an annual gain
of 11.7 percent.
Eight of nine local counties saw the median sales price
increase from September 2016, ranging from 18.0 percent in Santa Clara County
to 5.1 percent in Sonoma County. Napa was the only Bay Area county where the
median sales price decreased from the previous year, falling by 2.7 percent.
CAR Senior Vice President and Chief Economist Leslie
Appleton-Young pointed to a familiar culprit — not enough homes on the market
to meet demand — as the primary factor pushing prices higher. All but 10 of the
51 counties for which CAR tracks data saw annual home price increases in
“The statewide median price rose at the fastest annual pace
since February 2017 as the housing supply shortage continued to dictate the
market, taking a toll on home sales and affordability,” Appleton-Young said.
“The tight inventory situation is particularly acute in the Bay Area region,
which saw double-digit price increases in Alameda, Contra Costa, San Francisco,
and Santa Clara counties, while sales fell markedly from the previous year in
six of the nine Bay Area counties.”
California had a 3.2-month supply of homes for sale in
September, a modest improvement from August but down from last September.
Active listings, which have been falling by more than 10 percent every month so
far this year, continued their slide, declining by 11.2 percent.
A similar trend played out in the Bay Area, with the months’
supply of inventory expanding from August to 2.2 but down from the 2.6-month
supply recorded in September of last year. Four Bay Area counties have the
lowest inventory levels in the state: Santa Clara (1.4), San Mateo (1.9),
Alameda (2.1), and Contra Costa (2.2).
Written by Pacific Union
There has been a massive trend towards renting. The vast majority of household growth since
the housing bubble imploded has been with rental households. I know this is hard to believe for Taco
Tuesday baby boomers but this is simply the new reality. And all of those investors that bought up
single family homes for rentals are living it up. There are now a few major changes impacting
the housing market – many more single family homes are rentals and many more
renters are staying put. In other words,
many are not looking to buy and builders realize this. There is now a large category of permanent
renters since many people live and work in more expensive metro markets. Short of forking out an insane amount of
money to live in say San Francisco, people are opting to rent. The proof is in the numbers.
More renters are not moving
Many households used renting as a bridge before venturing
out and buying a home. But more people
are renting and staying put:
Across all age groups, people are staying put longer in
their rentals. And this is being pushed
by investors renting out single family homes:
Look at the chart above.
This is an anomaly in terms of how many single family homes are out in
the market as rentals. In terms of how
many SFRs are rented as a percentage of the entire SFR pool, this is an
increase of 50% from the 1980s.
You have many young adults that simply cannot move out on
their own even for a rental:
And if you are looking to buy in today’s house humping
market be prepared to pay a premium because inventory is pathetic:
leads us to a generational low homeownership rate:
So what you have is a rental market that now has many more
single family homes as rentals and many more renters are viewing these places
as permanent versus transitory apartments.
The fact that many more renters are staying put reflects this change. And why would a landlord argue with
this? It is great to have long-term
tenants. And for many, this meets their
needs instead of buying an overpriced shack.
Inventory remains pathetically low and younger American
adults in large numbers are simply staying put and living at home with mom and
dad. This is not a typical housing
recovery. This is a distorted market and
this is the outcome of mapped out bailouts with the banks, hedge funds buying
up single family homes, and builders becoming reluctant to build.
People try to paint this recovery as a broad one but what
this is highlighting is that this “recovery” is essentially jamming 100 hungry
people into a restaurant and saying that the first 20 people that get to the
counter will get a cold taco. Everything
is relative and right now, that dump of a home with crappy construction and
toxic mold is looking appealing at $1 million.
Blaming a “severe lack of homes for sale and high demand,”
the California Association of Realtors (CAR) claims in a report released last
week that it now takes almost double the income to qualify to buy a home in
California as it did in 2012.
The situation is even worse in the Bay Area.
CAR now recommends “a minimum annual income of $110,890”
(before taxes) in order to purchase a single-family home in California selling
for the median price of $533,260, based on a $2,770/month mortgage payment
after 20 percent down and an interest rate of just over four percent.
That is if buyers stick to the time-honored (but for many
unreachable goal) of only paying 30 percent of monthly income to housing. In
the Bay Area, the association recommends bringing in $179,390/year, which would
come out to nearly $15,000/month.
To put that amazing sum in perspective, computer programmers
in the Bay Area are averaging only $106,710/year, according to the Occupational
Employment and Wage Estimates from the Bureau of Labor Statistics from May
Software developers are bringing in about $133,500/year.
Cops somewhere around $105,540. And teachers $43,340.
Even more startling, five years ago the recommended income
was $90,370. A pretty heavy sum in and of itself—median income nationwide was
just over $51,000 that year according the US census—but just about half what it
These figure depend on CAR’s estimates about median housing
prices, of course. The report pegs the average home in San Francisco at $1.45
million, for example.
Earlier in the summer, Paragon Real Estate Group estimated
the same price between $1.4 million and $1.5 million, depending on the month.
Sites like Trulia and Redfin put it at $1.19 million and $2.24 million
respectively, although those aren’t scientific samplings.
Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious.
MODEST HOME SALES, PRICE GAINS EXPECTED NEXT YEARThe national housing inventory crunch is not expected to ease in the coming year, though more new homes should help spur a slight uptick in sales.
In its 2018 Outlook, Freddie Mac projects 6.30 million home sales in 2018, up from an expected 6.18 million this year, which would be the most in a decade. That 2 percent increase will largely be driven by sales of new homes, as sales of existing homes are unlikely to grow due in part to aging-in-place trends.
Freddie Mac expects home price growth to cool slightly next year, from a projected 6.3 percent in 2017 to 4.9 percent. Those projections line up almost exactly with the latest numbers from economists at John Burns Real Estate Consulting, which predicts 6.0 percent appreciation this year and 4.9 percent next year.
Both Freddie Mac and JBREC also have identical projections as to where 30-year, fixed-rate mortgages will be by the end of 2018: 4.4 percent. Freddie Mac projects that rising interest rates will cause refinancing activity to decline to 25 percent of the market by next year, its lowest level since 1990.
ONE-DOZEN EAST BAY HOUSING MARKETS ARE IN THE SEVEN-DIGIT PRICE RANGEEast Bay real estate markets have seen their fortunes rise during the current housing cycle, and now a dozen communities in Alameda and Contra Costa counties have median sales prices of more than $1 million.
Citing data from Bay East Association of Realtors, The Mercury News reports that Alamo was the region’s most expensive market in August, with a median single-family home sales price of $1,665,000. The other cities in the two counties with $1 million-plus home prices: Orinda, Lafayette, Danville, Moraga, San Ramon, Walnut Creek, Berkeley, Albany, Fremont, Dublin, and Pleasanton.
Inventory in the Alameda and Contra Costa counties continued to decline in August, and BEAR Spokesperson David Stark doesn’t see supply levels improving anytime soon.
“With schools in session, there will be even fewer homes on the market,” he told the Mercury News.
Buyers priced out of the East Bay’s more expensive enclaves might want to consider the Contra Costa County communities of San Pablo, Richmond, Pittsburg, and Antioch, all places where a single-family home can be had for less than $500,000. However, it appears the secret is out, as year-over-year inventory levels have shrunk in those four cities by between 24 percent and 48 percent.
FORECLOSURES SEE A LARGER-THAN-USUAL LATE-SUMMER SPIKEForeclosure activity typically increases in August as the real estate market takes a breather, but this year’s jump was particularly large, with San Francisco posting one of the biggest gains in the U.S.
A new report from ATTOM Data Solutions says that there were 75,115 properties with foreclosure filings last month, a gain of 14 percent from July, the largest such increase in 10 years. Foreclosure activity in San Francisco spiked by 62 percent month over month, second only to Phoneix for the largest increase in the country.
In a statement accompanying the report, company Senior Vice President Daren Blomquist noted that foreclosure filings are down on an annual basis and cautioned against reading too much into the monthly gain.
“While this seasonal increase is certainly not enough to set off alarm bells nationwide, especially given that foreclosure activity was down annually for the 23rd consecutive month in August, there is cause for concern in a few local markets where foreclosure activity has consistently been trending higher on an annual basis this year,” he said.
MORTGAGE RATES RISE AFTER PROLONGED DECLINESMortgage rates have risen for the first time in seven weeks, and more increases are likely on their way later this year.
Freddie Mac says that 30-year, fixed-rate mortgages averaged 3.83 percent for the week ended Sept. 21, up from 3.78 percent the previous week. Fifteen-year, fixed-rate mortgages also saw a 0.5 percent weekly increase, rising to 3.13 percent.
While mortgage rates remain low by historic standards, the Federal Reserve signaled last week that it would raise interest rates one more time in 2017, most likely in December.
Golden State homes should appreciate at almost double the national rate by next spring, though price growth and increasing rental costs do not bode well for affordability.
CoreLogic’s latest Home Price Insights report says that U.S. home prices rose by 6.6 percent from May 2016 to May 2017. California home prices grew by 5.8 percent in that time period, while the San Francisco core-based statistical area saw 4.6 percent annual appreciation.
Single-family rent inflation grew by 3.1 percent year over year in May, a reflection of constrained housing inventory and yet another obstacle for those hoping to enter the housing market while mortgage rates remain historically low.
“For renters and potential first-time homebuyers, it is not such a pretty picture,” CoreLogic President and CEO Frank Martell said. “With price appreciation and rental inflation outstripping income growth, affordability is destined to become a bigger issue in most markets.”
Housing affordability is already a national problem, dropping to a near nine-year low in the second quarter, according to a recent report from ATTOM Data Solutions. That analysis said that home prices grew faster than wages on an annual basis in 87 percent of U.S. housing markets, including most of the Bay Area.
California’s affordability problem is unlikely to improve in the coming year if CoreLogic’s forecast is accurate. The HPI calls for 9.7 percent home price appreciation through May 2018, compared with 5.3 percent appreciation nationwide.
Although the Bay Area has some of the nation’s priciest homes, most parts of the region are still considered to be valued normally. CoreLogic says that the San Francisco, Oakland, San Jose, Napa, and Vallejo CBSAs had normal home values as of May. San Rafael is currently considered undervalued, while Santa Rosa is overvalued.
Looking ahead, CoreLogic expects that homes in the San Jose, Oakland, Napa, Vallejo, and Santa Rosa CBSAs will be overvalued by May 2022. Home values in San Francisco and San Rafael are projected to remain normal over the next five years.
CALIFORNIA, AUGUST 24, 2017 – The San Francisco Bay Area real estate market softened in July 2017 as single-family home and condominium sales fell a higher than expected 19.5 percent from June 2017. July 2017 home sales were down 5.6 percent from 2016 marking the lowest July sales volume since 2010.
“San Francisco Bay Area home sales took a tumble in July, the lowest July sales since 2010 and the biggest June-to-July decline since 2006,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “While a sales decline in July is expected as we approach the end of the prime selling season, home affordability remains a persistent drag on the market with no end in sight.”
At the county level, July 2017 sales were down from July 2016 in eight of the nine Bay Area counties. San Mateo, Solano, and Sonoma counties posted the largest annual declines of 16.2, 15.6, and 13.9 percent, respectively. Marin County was the only county that posted an annual sales gain of 6.1 percent.
The July 2017 San Francisco Bay Area median home price (single-family residence) was $800,000, down 4.5 percent from $815,000 in June 2017. On a year ago basis, prices were up 5.6 percent from $759,000 in July 2016. At the county level, July 2017 median home prices ranged from a low of $410,000 in Solano County to a high of $1.25 million in San Mateo County.
On a year ago basis, July 2017 median home prices were down in four of the nine Bay Area counties. The largest price declines were in Marin (-13.7 percent), San Francisco (-9.8 percent), San Mateo (-3.8 percent) and Santa Cruz (-0.9 percent). The biggest annual price increases were in the lower priced counties, Sonoma (9.1 percent), Solano (7.9 percent), Alameda (6.2 percent), Contra Costa (6.1 percent).
“Not surprisingly Sonoma and Solano counties saw the highest annual median price increases,” said Schnapp. “These counties are the farthest from the San Francisco-Silicon Valley million-dollar corridor. Vallejo, a city in Solano County, saw their annual median home price jump nearly 20 percent.”
“Smart investors and homebuyers recognized that Vallejo, whose July median home price was $385,000, nearly 70 percent less than San Francisco’s, presented an interesting value proposition,” said Schnapp. “Vallejo’s secret weapon is the San Francisco Bay Ferry system that transports commuters from Vallejo to downtown San Francisco in an hour. Grab a cup of coffee, sit down next to a window and connect your laptop to the ferry’s WiFi system and watch some of the most spectacular scenery in the world roll by at 40 miles per hour. It’s no wonder that Vallejo real estate is popping.”
“Given the fact that economic growth fundamentals are unlikely to change anytime soon, for the savvy real estate investor or buyer that can tolerate a longer commute, there is still plenty of value out there in counties within striking distance of the San Francisco Bay Area,” said Schnapp. “Nosebleed prices in the Marin to San Francisco to Silicon Valley corridor are beginning to falter as buyers migrate to neighboring counties or out of the area in search of more affordable housing.”
Neighborhoods with at least one good elementary school have greater home values as well as higher home price appreciation over the long term compared to homes without good schools, according to the 2016 Schools a Housing Report released today by ATTOM Data Solutions, the new parent company of RealtyTrac.
ATTOM analyzed home values and price appreciation in 2016, along with the 2015 average test scores in 18,968 elementary schools nationwide in 4,435 zip codes.
A good school is defined as a school with an overall test score of at least 30% above the state average.
Of the zip codes with at least one good school, the average estimated home value was $427,402. This is 77% higher than the average home value of $241,096 in the zip codes without good schools.
“While good schools are one of the top items on most homebuyer checklists because of the quality-of-life benefit they provide, this report shows that high-performing schools also come with a financial benefit for homeowners in most markets, at least over the long term,” said Daren Blomquist, ATTOM senior vice president.
“Meanwhile, home prices in zip codes without any good schools tend to be more volatile, which might work to a homeowner’s financial benefit in the short term but not over the long term of at least 10 years,” Blomquist said.
Approximately 143 metros, or the 83% of the 173 metropolitan statistical areas analyzed for the report, had higher average home values in zip codes with good schools than in zip codes without good schools.
In some metros, the difference was significant from areas with at least one good school and the areas without. The metro area with the greatest difference in home prices was Birmingham, Alabama, at 169% higher. Flint, Michigan, came in second at 129% higher, followed by St. Louis at 99% higher, Detroit at 97% higher and Baltimore at 95% higher.
“In my experience, buyers will almost always choose to buy a home in a good school district,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market, where average home values were 64% higher in zip codes with goods schools than in those without.
“In turn, this creates greater demand for homes in high-performing school districts and causes these sub-markets to appreciate in value at higher rates than other neighborhoods,” Gardner said. “Interestingly, we see demand for these homes from buyers without school-aged children as well because they look at the school district as an added layer of protection should home prices start to soften.”
Homeowners in zip codes with at least one good school gained an average of $74,716 in value since the purchase, an average return on investment of 32%. On the other hand, homeowners in zip codes without good schools gained an average of $23,311 in value since their purchase, an average return on investment of 27.5%.
For families looking to rent, it is an entirely different story as some are being priced out of good school districts. Families looking to move this summer are taking a closer look at the quality of school districts.
Rents in some cities are significantly higher in areas with the best-rated schools over areas with low-rated schools.
Autumn wind will be here any week now and they will blow a chilly reminder that winter is fast approaching. Perform the following maintenance tips each fall to protect your property's value and prevent major repairs.
Roof, Gutters and Downspouts
Rain, ice, snow and wind can all cause damage to your roof and gutters. Now’s the time to trim back all tree limbs and vegetation away from the roof. You also should remove debris, such as leaves and sticks from your gutters and downspouts. Clogged gutters don’t allow water to properly drain away from the home, which can cause seepage in your ceilings and walls. You can also invest in gutter guards, a screen that prevents debris from entering the gutter and directs the flow of water away from the house and into the ground.
You don’t want to find out that your water heater isn’t operating properly when you need it most. So use this time to perform an annual inspection, which includes having your tank’s pressure and temperature relief valve checked. In addition, remove sediment from the bottom of the tank by draining two gallons of water to improve heat transfer and the efficiency of your heater.
Heating and Cooling System
If you have a forced warm-air heating system, you should check the exhaust vent and air shutter openings for dirt and dust. Clean any lint and dirt from the blower blades, motor and burner (if you have a gas heater). Vacuum air passages and check and replace, if necessary, fan belts. To prevent airborne dirt from circulating throughout your home, wash out your reusable filter or replace it if it’s disposable.
Doors and Windows
To help control heating costs, make sure your doors and windows are properly sealed. Now is the time to repair or replace weather stripping around door bottoms and jambs and window frames. Check for loose or missing glazing putty and caulking for deterioration. If you have storm windows, install them.
Frozen or burst pipes can cause major damage to your home and be expensive to remedy. Before frigid weather hits, protect your pipes in unheated areas from freezing by adding insulation, which reduces heat loss from hot-water pipes and condensation on cold water pipes. This can be accomplished by wrapping the pipes with heating tape or blanket insulation and duct tape or by encasing the pipes with preformed plastic foam. In addition, examine your pipes for cracks and leaks.
Before you light the logs and get ready to settle in front of a cozy fire, make sure that your fireplace is in good working order. Clean the chimney flue and, if needed, have it inspected and repaired. Check the seal on your flue, which is designed to keep out drafts. Replace the seal if it is loose or damaged.
If you decide to perform the fall maintenance yourself, disconnect the power for any electrical or gas systems. In addition, before inspecting, cleaning or making any repairs refer to your owner’s manual for all equipment for proper instructions, which should be the final authority on any maintenance.
Outdoor Surfaces and Landscaping
Fall is also a great time to seal your driveways, wood patios and other hardscape surfaces. In addition, prune tree branches away from your home and electrical wires. Plant spring flower bulbs and move sensitive potted plants indoors.
Although this list is merely a guide, it can help you keep your home in good shape and have a winter free of major repairs.
For Realtors across the country, summer means more than just nice weather.
This season seems to shine a special light on the housing market, as an influx of potential homebuyers and sellers put on their best game face and come out to play.
Traditionally, we see 40 percent of total home sales occur in the spring and summer months, and last year proved no different: The National Association of Realtors (NAR) reported the top 10 dates for home listings in 2016 all fell in April, May or June.
As we head into 2017’s hottest months, the forecast reveals much of the same.
It’s critical to have everything prepared in order to be as competitive as possible this summer.
Whether you’ll be helping an old client or working on a new opportunity, show off your best skills and strategies, and keep these four tips in mind.
Lack of inventory was a major hindrance to market success in 2016. As news of the shortage percolated over the year, many potential buyers became hesitant to go through with a home search.
As a result, Realtors had a harder time getting buy-in from potential clients.
While the problem will take over a year to remedy, 2017 could be the year we see builders hit their stride.
According to a recent Deloitte report, homebuilders’ confidence continues to rise, and housing starts are predicted to reach 1.5 million in 2017. This is up from 1.3 million last year.
Because inventory is still on the low end, it’s important to connect with contractors to stay abreast of new listing opportunities.
Building these relationships will ensure a steady stream of properties on the market, and allow you to avoid the seasonal wrestling match.
Another important tool Realtors neglect to utilize: their past clients.
With the chaos of 2007 far behind us, consumer confidence is back, creating new potential homebuyers for the market.
Agents shouldn’t let the influx of new prospects distract them from tending to their old clients. It’s always important to contact them, share valuable information and remind them why they loved working with you in the first place.
Treating these past clients right is the key to drawing new business; referrals and word-of-mouth are the secret to success for many top producers.
If you can get your customers to spread a good word, you’ve already got proof of production on your side.
Some Realtors may show resistance to technology, but doing so keeps their business from evolving.
Technology has so many benefits, and you’d be missing a massive opportunity to increase your business if you don’t hop on the bandwagon.
From 3-D home tours and paperless systems to rapid digital transactions like e-signing services, technology can truly help set you apart.
Today’s client is an educated one. Thanks to the wealth of data at their fingertips, more and more interested homebuyers are contacting a Realtor only after they’ve done their own research.
While clients are taking the reigns early on, agents still play an essential role; technology can’t completely replace a caring, invested Realtor, and something as simple as an open house still works wonders.
Buying a home is a huge financial undertaking that still unnerves many clients.
According to NAR, 87 percent of buyers purchased their home through a real estate agent or broker just last year. NAR reports this number has steadily increased by 69 percent since 2001.
As the summer season kicks-off, let these words of wisdom stick with you: In real estate, you don’t have to build it for them to come — you just have to sell it for those that do.
Written by: Chris Miller