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Luxury housing market shows early signs of slowdown

Sun, 09 Mar 2014 08:41:16 +0000

First Republic Bank’s Prestige Home Index indicates luxury homes in San Francisco had a strong finish to 2013. But some suggest that California’s high-end housing market is starting to see a slowdown.

Mark Calvey
Senior Reporter- San Francisco Business Times

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The Bay Area’s luxury home market is signaling a slowdown ahead even as prices late last year were still showing year-over-year double-digit increases.

First Republic Bank’s Home Prestige Index released Monday found that luxury home prices in the Bay Area and other key California markets are near records amid tight supplies of homes selling for $1 million and often more.

But it’s the commentary from real estate agents that set off alarms for careful followers of the luxury housing market. The commentary follows recent economic reports pointing to a national housing slowdown, which some blame on the extremely cold weather. The National Association of Realtors said last week that January existing home sales fell more than 5 percent nationally, the worst showing in 18 months. But if bad weather is to blame, some ask why were sales down 7.3 percent in the warm and sunny West?

In discussing First Republic’s latest quarterly figures released Monday, real estate agents in California’s luxury housing market are using telltale language of trouble ahead, with such phrases as “supply is plentiful” and the “market is solid,” while others see “buyer resistance” and “expect the market to level off.”

That type of talk could put a further chill on the housing market and prompt more home owners to put their properties on the market before prices fall.

Real estate agents say that pricing and demand for the limited supply of homes on the market is approaching levels last seen just before the housing market began to crater in 2007.

Earlier this month, Christopher Stafford and Terry Wright, both of Paragon Real Estate Group in San Francisco, sent an email to clients alerting them to “shifts in the San Francisco real estate market.”

“It is far too early in the year to reach definitive conclusions regarding substantive changes in the market, but there are indications of a number of shifts,” the Paragon agents said. “From the hurly burly on the street, the word is that the quantity of offers coming in on new listings is declining. Where a new listing might have attracted 10 or 12 offers last spring, three or four are coming in now; where three or four offers would have arrived, the seller is getting one.”

For those who don’t fully appreciate what the decline in offers mean, the Paragon brokers put it bluntly, “The amount of competition deeply affects home-price increases.”

“And, according to Broker Metrics, for every two listings that accepted offers in December and January, another listing expired or was withdrawn without selling.”

The Paragon agents see plenty of potential buyers checking out online listings and open houses, but more of them are first-time buyers who are “proceeding more cautiously.” Plus that group doesn’t come in with the buying power of home equity built up over the years.

“Though the market remains hot by any reasonable standard, by some statistical measure it is cooling,” the Paragon agents advised clients. “This may reflect a transition or only a lull before the spring sales season begins.”

On Monday Stafford echoed a frequently heard lament in Bay Area real estate circles, “There is no inventory.”

“It seems some of the heat has been taken off the market,” Stafford told me, adding that he views any references to the market “cooling” as overstating the case.

Those hoping that the Bay Area’s luxury housing market gets a big lift this spring might be disappointed as the affluent experience what Marcum’s accountants call “tax shock” as their higher 2013 tax bills must be paid. This segment of the market is also greatly affected by stock market performance, given how much wealth is created in the Bay Area through stock options and initial public offerings. The IPO market also helps set prices paid by acquirers of private companies. The tie between stocks and luxury housing is so strong that one real estate agent, when asked for his outlook on the region’s luxury home market, said, “You’re asking me to predict what the stock market will do.”

The traditionally strong spring housing market may see even more inventory come to market if home owners decide that they’ll get better prices by selling sooner than later.

On Monday, First Republic’s closely watched survey of luxury home values clocked in strong gains from a year ago, but more modest gains from the third quarter, especially when looking at the third quarter’s gain over the second quarter of 2013.

In the Bay Area, luxury home values in last year’s fourth quarter rose 12.4 percent from the fourth quarter of 2012 and 1.8 percent from the third quarter of 2013. That was just below the third quarter’s gain of 1.9 percent from the second quarter of 2013.

In Los Angeles, the fourth quarter’s luxury home values rose 13.7 percent from from a year ago and 1.3 percent from the third quarter. The quarter-over-quarter gain was down sharply from a 6.7 percent gain seen in the third quarter from the second quarter.

In San Diego, luxury home values rose 16.6 percent year-over-year and 1.3 percent from the third quarter of 2013. Again, that represented dramatic slowdown in price gains from the third quarter’s 6 percent increase from the second quarter.

San Francisco-based First Republic Bank produces the quarterly Prestige Home Index with Core-Logic Case-Shiller, a provider of automated property valuation services to the financial services industry. First Republic has tracked luxury homes since the bank’s founding in 1985.

The fourth quarter figures and analysis may provide a snapshot of rising luxury home values as the market was turning down.

“Luxury home prices again posted double-digit gains on a year-over-year basis,” said Katherine August-deWilde, president and chief operating officer of First Republic Bank. (NYSE: FRC) “Market conditions in California’s luxury communities continue to be very strong. Limited inventory, robust demand and low interest rates are driving prices higher.”

In Marin County, higher-priced homes saw gains.

“Going into the end of the year, homes $4 million and above finally picked up,” said Pat Montag of Sotheby’s International Realty in Mill Valley. “Prices are getting close to the peak of the market in 2007. We have very little inventory and that’s constraining the market.”

San Francisco also participated in the strong housing market last year.

“Prices continue to rise because there is so little inventory and so much demand,” said Mary Lou Castellanos of Sotheby’s International in San Francisco. “There are a lot of people who want to buy. The homes that do come to market generate multiple offers and offers over the asking.”

And new tech wealth is spurring luxury home buying on the Peninsula.

“From Palo Alto to Atherton, we are seeing offers 20 percent to 40 percent over the asking price,” said Pat Kalish of Alain Pinel Real Estate in Palo Alto. “It’s tech money as well as foreign buyers. From all indications, prices will keep increasing because the inventory is so low. If you’re a homeowner, this is one of the best times ever to sell.”

Hope springs eternal among those selling real estate.

Southern California also enjoyed a strong market as the stock market clocked in with one of its best years ever in 2013.

“The demand is incredible. It is much stronger than it was in 2006 at the height of the market. Homes that were selling at $10 million in 2005 and 2006 are now $20 million and $25 million. It’s astounding,” said David Mossler of Tele Properties in Beverly Hills.

Further south in Orange County Ron Miller of HOM Sotheby’s in Newport Beach told First Republic Bank that homes at $4 million are selling above year-earlier comps.

“The attractive properties are generating multiple offers,” Miller said. “I see some buyer resistance now and expect the market to level off.”

Even further south in the San Diego area, more signs of a cooling market are evident.

“We’re seeing multiple offers and offers over the asking for properly priced homes up to $3 million,” said Linda Sansone of Willis Allen in Rancho Santa Fe. “From $3 million to $5 million, the market is solid, prices are appreciating and supply is tight. For homes $5 million and above, there is plenty of supply, and prices are rising modestly.”

Sue De Legge of Sue De Legge Associates, also in Rancho Santa Fe, said home-price appreciation was driving the market.

“Rising prices are motivating more sellers to list their homes,” she said. “We expect more inventory to be brought to market in coming months.”

And as a reminder for those who missed Econ 101, rising supply is likely to put downward pressure on prices. One thing is certain: this spring’s home-selling season will be well worth watching.

Mark Calvey covers banking and finance for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/2014/02/home-prices-san-francisco-real-estate.html?page=all

American Housecleaning in San Francisco Launches Cleaning Services for …

Thu, 26 Sep 2013 08:05:57 +0000

American House Cleaning in San Francisco

Menlo Park, CA (PRWEB) September 26, 2013

Every real estate agent knows how important it is to properly stage a home that they have put on the market for sale. A well-staged home means shorter time on the market because it makes the home look more appealing to prospective buyers. American House Cleaning’s new cleaning services are specialized for real estate agents and will help increase the appeal of homes during a showing.

Staging a home involves preparing a home for sale by making it more attractive to buyers by eliminating clutter and arranging furniture and accessories. But nothing is more important than the cleanliness of the home. By partnering with local real estate agents, American House Cleaning plays an important role in ensuring that homes are market ready.

If a home is dirty, prospective buyers may wonder if there are more serious maintenance issues that they don’t know about. Also, if the home is empty, it is even more crucial that it is clean. Dusty floors, dirty windows, and grime on kitchen and sink countertops are more visible when there is nothing else to distract the eye.

American House Cleaning is a locally owned and operated, full-service cleaning company that has served loyal clients throughout the Bay Area since 1986. They work hard to deliver consistently superior results to individuals, businesses, real estate agents, property managers, and office complexes at affordable rates.

American House Cleaning is also a proud sponsor of SAMCAR, the San Mateo County Association of REALTORS®. SAMCAR is a trade association that promotes professionalism and the ownership of real property by developing and implementing programs and services to help the individual REALTOR® achieve success. They are the voice of real estate professionals and property owners in San Mateo County.

To learn more about American House Cleaning’s services for real estate agents, and to request an instant quote, visit AmericanHouseCleaning.com.

About American House Cleaning

American House Cleaning is a non-franchise, locally owned and operated, full-service cleaning company that has served loyal clients throughout the Bay Area since 1986. We’re proud to deliver consistently superior results to individuals, real estate agents, and property managers.

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Article source: http://www.prweb.com/releases/American-Housecleaning/CA-Real-EstateAgents/prweb11164740.htm

Forget easing prices, new homes are up, up, up

Tue, 24 Sep 2013 20:03:52 +0000

Existing home price gains decelerated in July on the Case-Shiller index, likely due to the sharp jump in mortgage rates, but the gains were still sizable and unlikely to abate much. That’s due simply to lack of supply. The number of for-sale homes continues to drop across the nation.

(Read more: Map: Tracking the recovery)

While inventories improved slightly in August on a national basis, up 0.4 percent month-to-month, they are still down 6.3 percent from a year ago, according to the National Association of Realtors.

While home sales were higher in August, the Realtors said it was, “the last hurrah,” as several indicators showed buyer traffic slowed dramatically at the end of the summer.

“The sharpest falloff in the HousingPulse Homebuyer Traffic Indexes was seen among current homeowners, the largest group of home purchasers in this year’s housing market. The first-time homebuyer group also saw a decline in its traffic index,” according to a new report from Campbell/Inside Mortgage Finance.

The fall and winter months are traditionally the slowest in the housing business, and weaker demand will affect prices. Sales of newly built homes have not exactly been gangbusters, and new orders at both Lennar and KB Home were weaker than expected. Make no mistake, underlying demand exists, it’s just a question of when it emerges in force.

So far, even weak demand has pushed prices higher, again, due to historically low supply.

(Read more: Real estate’s new frontier: Crowdfunding)

“Construction of single-family homes has been depressed since late 2007, while the U.S. population has increased by more than 12 million over that time,” said economist Patrick Newport of IHS Global Insight. “Since underlying demand is, by our estimate, running at a rate nearly twice that of housing completions, the shortages are likely to get larger before getting smaller.”

This means that home-price gains, as measured by the Case-Shiller indexes, are likely to remain strong for some time, even if they retreat some from the current pace.”

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Questions?Comments? facebook.com/DianaOlickCNBC.

Article source: http://www.cnbc.com/id/101058777

Home sales suffer on higher rates: Realtors

Wed, 28 Aug 2013 18:14:57 +0000

The figures come on the heels of very weak sales of newly built homes in July, down 13 percent from June, according to the U.S. Census. Analysts blamed higher interest rates and some expected existing home sales to fall even further than this latest reading. Interest rates are about a full percentage point higher today than in May.

Mortgage applications had been lower for much of the summer, and refinances continue to fall, but applications to purchase a home rose 2 percent last week from the previous week, according to the Mortgage Bankers Association.

This, even as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $417,000 or less increased to 4.8 percent, the highest since April 2011. They are still down 6 percent in the past month. Mortgage rates, however, have been moving lower this week on weak economic data.

Higher home prices could also be hurting potential sales, as very low inventories continue to cause bidding wars from coast to coast. Inventories of existing homes are down significantly in most of the nation’s major housing markets.

(Read more: Map: Tracking the recovery)

San Francisco, for example is seeing some of the highest home price appreciation, as listings were down 29 percent in July year over year, according to the California Association of Realtors.

“More homes clearly need to be built in the West to relieve price pressure, or the region could soon face pronounced affordability problems,” Yun said.

Single family housing starts were down 2.2 percent in July month to month, as home builders still struggle to find finished lots and skilled labor. Underlying demand is running nearly twice the rate of housing completions, according to IHS Global Insight. Some home builders admit they are slowing production in order to gain pricing power.

(Read more: Home prices across the US defy gravity)

Article source: http://www.cnbc.com/id/100993579

Sean Sullivan San Francisco Real Estate New Construction Comments on the …

Thu, 25 Jul 2013 21:42:41 +0000

(PRWEB) July 25, 2013

Sean Sullivan San Francisco Real Estate New Construction and Senior Sales Leader with Climb Real Estate Group in San Francisco who was recently featured in a KRON4 news report, comments on the California Association of Realtors® (CAR) June Home Sales and Price Report(1) which shows a decline in units sold, as prices continue to trend upward statewide. Sullivan notes the California Association of Realtors® (CAR) June Home Sales and Price Report which shows a decline in units sold, while prices continue to trend upward statewide. The CAR report states that as prices continued to increase statewide in June with double-digit gains over June 2012, the number of units sold was down 3.8 percent from May, and down 3.7 percent from June 2012. The statewide median price of an existing, single-family detached home rose 2.7 percent from May’s revised median price of $417,350 to $428,510 in June. June’s price was up from 33.5 percent over June 2012. “The June decline in home sales was attributed partially to the hike in interest rates in recent months. The average 30-year fixed rate had been stabilizing at around 3.5 percent since the beginning of the year, until it jumped more than 50 basis points in June to reach above the 4 percent mark for the first time in more than a year and a half,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “This rate increase portends a somewhat higher rate environment going forward as the Fed mulls over the start of its tapering off program in response to positive signs from the economy.” Available now at ICON, these 1 and 2 bedroom homes feature contemporary, tasteful finishes located adjacent to shopping, transit, services, food and drink. Amazing views toward the top of the 6 story building. Represented for sale by Paragon Real Estate Group’s Suzanne Gregg and Jason Gorski.

Sullivan says it is important to realize that the San Francisco Bay Area bucked the statewide trend in that housing prices in June decreased very slightly by 1.1 percent over May, but still showed an increase of 23.3 percent over June 2012. The median sold price in June was $712,030, while in May it was $719,610 and in June 2012 it was $577,640. San Mateo County showed a 5.4 percent increase over May prices, and San Francisco County showed a 9.7 percent decrease. The month-to-month median price change from April to May 2013 was 5 percent. Alameda County shows a 2 percent decline in prices in June over May, but 29.7 percent increase from June 2012. Linea condominiums are perhaps the most architecturally stunning residential development along Upper Market. Linea offers myriad views and floor plans to suit buyers who crave privacy or who want to be front-and-center in this dynamic location. Glass curtain wall construction allows for floor-to-ceiling windows in most homes. With the historic Art Deco San Francisco Mint and a new Whole Foods as neighbors, Linea graces an already remarkable location. Transit and the neighborhoods of Hayes Valley, Upper Market and Mid-Market are at your fingertips. Developer represented by Polaris Pacific.

The San Francisco Bay Area was the only region in the state which showed a month-to-month decline in median housing prices. This fact can be seen as a positive sign because it should ease concerns of a housing bubble in the Bay Area. The median time on the market for the Bay Area in June shows a slight increase over May, at 34.1 and 31.4 days respectively. Sean Sullivan specializes in San Francisco Real Estate new construction and more information about other new properties can be found on his website. The Century, a chevron shaped condominium building will open for sales late this summer. The five story structure has 1 and 2 bedroom floor plans at the crossroads of Duboce Triangle and Upper Market. The Penthouses feature commanding views and large private terraces. The neighborhood is an urban dwellers dream with parks, transit, bars, restaurants and stylish retail just downstairs. Developer represented for sale by Vanguard Properties’ Jean-Paul Samaha and Ed Deleski.

About Sean Sullivan San Francisco Real Estate Agent

Sean Sullivan serves as Climb Real Estate Group’s Senior Sales Leader. With more than fifteen years in the real estate industry, Sullivan has sold over $600 million in residential real estate and built a reputation for customer-focused sales leadership in San Francisco. Sullivan has extensive experience in a variety of real estate transactions, both on the buyer’s and on the seller’s sides, and collaborates with attorneys, brokers, and the real estate community at large. His relationships with sellers, buyers and developers allows him to leverage market knowledge and experience in negotiating and surmounting challenges. As a Top Producer in 2010, 2011, and 2012, his reputation is built on putting clients first by being responsive, consultative, collaborative, ethical and honest.

“Community is important to me,” said Sullivan. He is a member of San Francisco Association of Realtors, California Association of Realtors and National Association of Realtors and active in SPUR (San Francisco Planning and Urban Research Association), SF SAFE, The National Trust for Historic Preservation, Jewish Vocational Services, SF Bicycle Coalition and Panhandle Park Stewards.

Television, radio, print and electronic media often reach out for Sullivan’s take on the local and national real estate market. He has appeared on television numerous times, been featured on the front page of The San Francisco Chronicle and featured on The Today Show, Fox News Business, The Daily Mail UK and LA Times. In 2012 I received the great honor of The Armed Forces Civilian Service Medal.

Originally a Connecticut Yankee, he has lived in San Francisco for 16 years. His interests include family, urban planning, yoga, surfing, and gardening. He has also been fortunate to travel to over 30 countries. He currently resides in the Upper Haight. Sean Sullivan can be contacted at 415-215-0554, Sean(at)climbsf(dot)com. Please visit his website at: http://sfresource.com.

Contact Information

Sean Sullivan, Senior Sales Leader

Climb Real Estate Group

San Francisco, CA 415-215-0554

Sean(at)climbsf(dot)com

http://sfresource.com

(1) http://www.car.org/newsstand/newsreleases/2013releases/june2013sales

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Article source: http://www.prweb.com/releases/2013/7/prweb10954088.htm

Investors are moving out of housing. Here’s why

Mon, 22 Jul 2013 21:34:46 +0000

First-time homebuyers could say the same. Usually about 40 to 45 percent of the market, they made up just 29 percent of buyers in June, according to the National Association of Realtors. A lack of supply has made the market far too competitive for these buyers, who usually need financing and have smaller down payments.

(Read more: Map: Tracking the US real estate recovery)

“We can thank investors for that limited inventory, of course, as many entry-level buyers are now going to have no choice but to rent,” said Peter Boockvar of The Lindsey Group.

Even as investors move out, cash is still king in this market. Thirty-one percent of sales were all-cash. That share is usually below 10 percent. June’s home sales were largely unaffected by the recent rise in mortgage rates, as contracts for those sales were signed in April and May.

The Realtors’ group expects higher rates to slow sales in the coming months, and if investors, who drove the market for so long, continue to exit, those sales could be even slower.

(Read more: Go green? Get a bigger mortgage)

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Questions? Comments? facebook.com/DianaOlickCNBC

Article source: http://www.cnbc.com/id/100903814

Chinese investors buying up San Francisco real estate

Sat, 22 Jun 2013 01:51:05 +0000

Last month, California’s median home price experienced its biggest gain in more than 33 years, according to the California Association of Realtors. But it didn’t put off wealthy Chinese who have been pouring money into Golden State real estate.

The San Francisco Bay Area is seeing a tremendous surge in real estate investment from China. According to the San Francisco-based Asia Society, California is on track this year to receive record investments in both commercial and residential real estate.

The society recently held a panel discussion on “Courting the Chinese Buyer: The New California Real Estate Boom”. The experts there agreed that Chinese investment in Bay area properties would continue to be strong.

Yat-Pang Au, founder and CEO of Veritas Investments Inc, one of the largest owners and operators of apartments in San Francisco, said that one of the reasons it made sense to invest in San Francisco was that it is a true cosmopolitan city recognized throughout the world, but still one of the cheapest. Au called it “a natural fit” for a Chinese investor.

“We have good schools, a safe environment, clean air,” Au said. “It is a relatively safe investment in real estate.”

According to the National Association of Realtors, buyers from China are now the second-largest group of foreign investors in US residential real estate (after Canadians), spending $9 billion in the year ending March 2012.

While Chinese individual investors are focusing on residential real estate, Chinese enterprises are making an even harder push into the commercial market.

Chinese developer Zarsion Holdings Group inked a deal to build a $1.5 billion waterfront development in Oakland, California, during Governor Brown’s trade mission to China in April. There is also a joint venture underway between China Vanke Co Ltd and US firm Tishman Speyer Properties to develop luxury apartments in San Francisco.

Wilson Chen, president of Portland-based American Pacific International Capital, thinks that China’s slowing economy will not slow down Chinese investment overseas; on the contrary, he believes there will be more people looking to diversify their portfolios with investments outside of China.

Chen said that inflation in China was huge and in the international currency market, the US dollar was weak against the Chinese yuan. “When Chinese investors come to the US to invest, they pretty much grab the money off the printing machine and come over here to buy cheaper stuff,” he said.

Chinese investment in the US hit an all-time record in 2012 of $6.5 billion and will likely surpass that level in 2013, according to the research firm Rhodium Group.

Leonard Rosenberg, head of the Palo Alto-based law firm Mayer Brown, said investment growth in China goes beyond market forces.

“I think there are policies in place to encourage Chinese investment, particularly the state enterprises,” Rosenberg said, noting that Chinese insurance laws were modified to allow state-owned insurance companies to invest in real property assets.

Rosenberg also mentioned a recent Bloomberg report about China’s official overseer of foreign-currency reserves talking about potentially investing in US real estate.

“It makes sense that they will want to move into real estate in general,” he said. “US real estate is very transparent and a low barrier entry sort of industry.”

The experts suggest being aware of the cultural gap between US and Chinese investors. Because the Chinese are usually thinking differently in terms of what their US partner can offer.

“There are some gaps that cannot be bridged,” Chen said, “primarily on the financial structure side, but also some on the legal structure side that they don’t understand.”

As an example he mentioned that China has no property tax, so when Chinese people come to the US to buy property, they say, Ok, that’s cheap, then buy it, without realizing what they’re getting into.

Yuwei12@chinadailyusa.com

(China Daily USA 06/21/2013 page10)

Article source: http://usa.chinadaily.com.cn/epaper/2013-06/21/content_16643650.htm

Chinese investors buying up San Francisco real estate

Fri, 21 Jun 2013 07:50:36 +0000