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Housing boom sends Bay Area home prices soaring

Wed, 26 Jun 2013 14:07:31 +0000

A housing boom is sending home prices soaring nationwide, with real estate experts saying the San Francisco Bay Area — specifically the East Bay — is leading the way.

In its monthly report on housing prices, the SP/Case-Shiller Home Price Index — considered to be the leading measure of home prices across the country — said Tuesday the average selling price for a home in the San Francisco area jumped 23.9 percent over a 12-month period ending in April.

Jed Kolko, Trulia’s chief economist, told SFBay home prices in the East Bay showed even more dramatic increases:

“Trulia’s Price Monitor, which is a forward-looking indicator of price trends based on asking prices and reports the San Francisco and Oakland areas separately, showed prices up 31 percent in the East Bay year-over-year, the biggest increase among the 100 largest metros in the country.”

Kolko said home prices in other Bay Area counties also increased, but not as much as the East Bay:

“Prices in our San Francisco metro area, which includes San Mateo and Marin counties, were up 20 percent year-over-year, which is also a very steep increase but not as steep at the East Bay gain.”

Though the housing market is rebounding in most cities, a tight inventory of homes across the Bay Area and one of the fastest job growth rates in the nation is helping to boost home prices locally.

And as Kolko points out, home prices in the East Bay saw prices fall sharply during the bust, creating bargains for home buyers.

SP/Case-Shiller says nationwide prices the average price for a home during that same period of time ending in April jumped 12.1 percent — setting a monthly record.

David Blitzer, chairman of the index committee at SP Dow Jones Indices said the housing recovery is looking strong:

“Atlanta, Las Vegas, Phoenix and San Francisco posted year-over-year gains of over 20 percent in April. San Francisco was the highest at 23.9 percent. … Recent economic data on home sales and inventories confirm the housing recovery’s strength.”

Behind San Francisco in showing strong growth was Las Vegas, which saw prices climb 22.3 percent and Phoenix, which saw prices rise by 21.5 percent.

Article source: http://sfbay.ca/2013/06/25/housing-boom-sends-bay-area-home-prices-soaring/

The incredible soaring Bay Area home prices

Thu, 28 Mar 2013 01:02:22 +0000

Tuesday’s SP/Case-Shiller report underscored the rapid run-up in Bay Area home prices, showing that the San Francisco metro area — Alameda, Contra Costa, Marin, San Francisco and San Mateo counties — saw home prices surge 17.5% in January compared to a year ago. That outpaced the national run-up of 8.1 % and was second only to Phoenix.

For a detailed analysis of the numbers and what they mean for the Bay Area, click here.

Bidding wars and multiple offers are the new norm here.

Here’s a look at a San Jose house listed for $1,075,000 that sold for $1,120,000. Redfin agent Ashley Rabello said she had four offers within the first day of listing. The winning offer had no contingencies, a large percentage down, and was significantly higher than the asking price.

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Heavy action at all price points is new — and another harbinger of recovery.

“During the boom and bust, the lower-priced houses had the biggest percentage price increases and then the biggest percentage collapse,” said David Blitzer, chair of the index committee for SP/Dow Jones. That’s because the most-outrageous lending practices — subprime loans, liar loans, no money down — were more concentrated in the low end.

Case-Shiller tracks homes at three price tiers — low (under $383,942), middle ($383,9422 to $681,776) and high (over $681,776). “Until the boom, the three moved together; during the downturn, they spread apart,” Blitzer said. “Now they’re moving in sync again; it’s a sign the market is coming back to normal, behaving a lot less bizarrely than it did before.”

Carolyn Said is a San Francisco Chronicle staff writer. For insights and news on the real estate market, follow her on Twitter: @csaid

Article source: http://blog.sfgate.com/ontheblock/2013/03/27/the-incredible-soaring-bay-area-home-prices/

Home prices in Bay Area up 17.5% in January

Wed, 27 Mar 2013 06:59:10 +0000

Home prices in the five-county San Francisco metro area surged 17.5 percent in January versus a year ago – one of the biggest gains nationwide – according to a key gauge released on Tuesday.

Overall, U.S. home prices registered their biggest annual climb since summer 2006, rising 8.1 percent compared with last year, according to the SP/Case-Shiller composite index. Every one of the 20 major metropolitan areas Case-Shiller tracks posted year-over-year gains. The annual gains accelerated in 19 of the markets, with Detroit the only exception.

“The number that jumps off the page is San Francisco’s 17.5 percent increase in the past 12 months,” David Blitzer, chairman of the index committee for SP Dow Jones Indices, said. “That’s pretty big. Only one city, Phoenix (with a 23.2 percent increase), did better. Compared to the low points, you’re way up there, about 25 percent over the low. It’s a strong comeback.”

Resale homes

Case-Shiller defines the San Francisco metro area as Alameda, Contra Costa, Marin, San Francisco and San Mateo counties. The index tracks sales of the same single-family houses over time, comparing changes with a base value of 100, which represents values as of January 2000.

The San Francisco index is now 147.45, meaning that prices are 47.45 percent above their January 2000 level. The region’s index peaked at 218.37 in May 2006 and hit a low of 117.74 in March 2009 – so prices are still 32.5 percent below their peak, according to the index.

Several forces propel the upward trend, notably an improving economy, low interest rates, tight inventory and fewer foreclosures.

The San Francisco area “is the second-leading place in the country in job creation (after Houston), and doesn’t build a lot of houses, so supply is very tight,” said Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley. “We added 210,000 jobs to the Bay Area in the past 2 1/2 years – that’s a lot of people.”

Similar forces are driving the rental market, which is also experiencing big price run-ups. Exacerbating that situation, the tight for-sale inventory “is forcing a lot of people who want to be buyers to remain as renters,” Rosen said.

Rosen and others said Case-Shiller actually understates the turnaround – prices have risen even more than the index can capture. In part, that’s because it has a long lag time, measuring prices in January. Real estate service DataQuick, for instance, reported that February median sales prices in the nine-county Bay Area were up 24.6 percent compared with the same time in 2012.

“I would say Case-Shiller under-represents,” said Charmaine Frank, Redfin real estate’s area manager for San Francisco, San Mateo, Santa Clara and Marin counties. “The market has taken a pretty dramatic turn since January.”

Cash is the fuel

Like agents throughout the Bay Area, she said there are “enormous bidding wars going on. We see upwards of 40 to 60 offers on some properties; typically the top five to eight will be all-cash buyers.”

The numerous cash sales help fuel price appreciation, she said, because buyers skip getting an appraisal since they don’t have a mortgage. Appraisals, which rely on recent comparable sales, would moderate the rapid run-up.

“There’s a huge shortage of homes on the market right now,” said Cindi Hagley, a broker with the Hagley Group at Prudential California Realty in San Ramon. “For example, there are only 12 single-family homes for sale in Dublin right now. Ordinarily there should be 100 to 150 homes for sale there.”

Patrick Newport, U.S. economist with market analyst Global Insight, said that the rising home prices should help boost the economy further. “They stimulate new construction, and they also help consumer spending because they raise the value of people’s homes,” he said.

With multiple bids and properties selling well above asking price, could another real estate bubble be forming?

“Not yet,” said Rosen. “If they keep (interest) rates this low for two more years, the answer is yes.”

“This time, rapidly rising prices are a good thing,” Newport said. “A lot of homeowners are underwater; this helps them come out of that.”

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com Twitter: @csaid

Article source: http://www.sfgate.com/business/article/Home-prices-in-Bay-Area-up-17-5-in-January-4386974.php

How Investors Are Skewing Home Price Recovery

Wed, 29 Aug 2012 02:57:24 +0000

Home prices finally appear to be catching up with the increase in overall sales pace. That is usually the case, as prices lag sales on the way up and on the way down.

The latest reading from SP/Case-Shiller, which employs a three month running average, shows home prices in June posted positive annual growth rates nationally and for the top ten and top 20-city composites. (Read More: Home Prices Rose in All Major US Cities in June: Case-Shiller.)

“I think this is a very strong report,” said SP’s David Blitzer in an interview on CNBC. “I think this is a clear sign we’ve turned around.”

The summer months are usually stronger for home prices historically, due to the mix of homes that are selling. Larger, more expensive homes sell in the spring and summer, so that families can move without disrupting school. Still, the gains are showing not just month-to-month, but year-over-year, so seasonality should not play too much of a role.

What is playing a strong role is a combination of investor activity in the market and supply, both of which have been falling. Listed inventory in July was down nearly 24 percent from a year ago, according to the National Association of Realtors. Investor activity in the market fell to 21.9 percent of all transactions in July, according to a new survey by Campbell/Inside Mortgage Finance. That’s down from 23.5 percent in June and a two-year peak of 25.3 percent in May. (Read More: As Housing Boom Recovers, Will Apartment Boom End?)

From the survey:

Real estate agents responding to the HousingPulse survey indicated that recent price increases caused the sharp reversal in investor interest. “Investors are dropping out due to the increase in prices,” reported an agent in California. “Prices are too high here for investors,” added an agent in Massachusetts.

Thomas Popik, research director for Campbell Surveys, claims the drop in investor share is not just due to a rise in overall home sales and fewer distressed sales.

“Overall homebuyer demand and home price appreciation is being driven by historically low interest rates,” Popik said. “But savvy investors are the canaries in the coal mine—they are warning that if rates rise, the high proportion of distressed properties could once again push home prices down.”

Foreclosures have been falling steadily, with 58,000 completed in July, down from 69,000 in July of 2011, according to CoreLogic. (Read More: Cautious Moves on Foreclosures Haunting Obama.)

“Completed foreclosures were down again in July, this time by 16 percent versus a year ago, as servicers increasingly rely on alternatives to the foreclosure process, such as short sales and modifications,” said Mark Fleming, chief economist for CoreLogic.

Given the unprecedented nature of the recent housing crash, there is not a lot of historical perspective to help us gauge if this is in fact a real recovery in home prices or a temporary bump due to a slowdown in distressed supply and a pull-back by investors. Seasonal factors will likely come into play in the fall, tempering home price gains. (Read More: Cities With the Most Affordable Homes.)

There is still too much noise in the numbers, however, to draw any firm conclusions yet. Nearly 12 percent of all homeowners with a mortgage are either delinquent in their payments or already in the foreclosure process, according to the Mortgage Bankers Association.

Banks are still sitting on thousands of already-foreclosed properties, while the government looks to unload even more foreclosures through bulk deals. Record-low mortgage rates are beginning to rise again, and new rules governing the mortgage market that could further affect those rates are in the works. Too much noise.

—By CNBC’s Diana Olick

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48813075?__source=RSS*blog*&par=RSS

Falling Home Prices Hit Big Banks, Fannie, Freddie

Sat, 04 Jun 2011 19:56:41 +0000

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Home prices began double-dipping months ago, but now that SP/Case Shiller has chimed in, it really must be so.

This report is the most widely-followed home price index, equally quoted in bank boardrooms, Treasury Department back rooms, and Congressional Committees.

The report finds home prices in Q1 of this year are now 2.9 percent below the previous quarterly bottom in Q1 of 2009, effectively giving up all the gains of the past few years, which were of course fueled by the home buyer tax credit.

“Just about everybody agrees we’re going to miss the seasonally strong period in 2011, which we should be at the very beginning of right now with May, but nobody thinks that will make any difference,” says SP’s David Blitzer. “Everybody’s now keeping their fingers crossed for 2012 and wondering whether people just don’t want to own homes anymore.”

Keeping your fingers crossed for the housing market is just the tip of the iceberg. Prices have now fallen, on this index, more than they did during the Great Depression. “On that occasion, the peak in prices was not regained until 19 years after they first fell,” notes Paul Dales at Capital Economics.

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Article source: http://www.cnbc.com/id/43224167?__source=RSS*blog*&par=RSS