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Bay Area home prices, sales climb in July

Tue, 20 Aug 2013 11:38:23 +0000

With more Bay Area residents choosing to sell their homes, real estate sales in July hit their highest monthly volume in almost seven years, while the median price continued its surge, according to a real estate report released Thursday.

A total of 9,339 new and resale houses and condos changed hands in the nine-county Bay Area in July – up 13.3 percent from July 2012, said DataQuick, a San Diego real estate research firm. The median paid was $562,000, a 33.5 percent increase from the same time last year.

Pent-up buyer demand, an improving regional economy and low interest rates have propelled home prices upward for many months. But a dearth of homes for sale meant the number being sold fell on a year-over-year basis every month since January. That trajectory reversed course in July.

“It was a really strong month,” said Andrew LePage, a DataQuick analyst.

Rising inventory shows the real estate market regaining equilibrium.

“Sellers want to jump on the train by putting their properties on the market, which levels supply and demand,” said Tanja Beck, an agent with Zephyr Real Estate in San Francisco.

Fewer bids

More inventory, as well as rising interest rates, should soon rein in the sharp price increases. Although bidding wars still occur, many agents say multiple offers now are measured in smaller numbers – perhaps three bids instead of a dozen.

While San Francisco is the nation’s most competitive market, with 80.5 percent of successful home buyers facing other bids, multiple offers in the city dropped nearly 10 percent from June to July, according to a report from real estate firm Redfin.

Nationwide, fewer bidding wars “points toward the strong sellers’ market beginning to shift toward more balance, giving frustrated home buyers a bit of relief,” Redfin said.

Distress sales are down sharply, another sign of a return to normal. Foreclosure resales were under 5 percent of the total – their lowest level since August 2007, before the credit crunch hit. In February 2009, foreclosure resales were 52 percent of the market, DataQuick said. Their historic monthly average in the Bay Area is about 10 percent of sales.

Short sales – properties sold for less than is owed on the mortgage – were 10 percent of July resales, down from 23.7 percent a year earlier.

Fewer distress sales also mean that people who sell their homes are likely to turn around and buy another property, creating a positive upward spiral.

“There was a time when more than half the sales were the lender pocketing money (in a foreclosure resale) so they just ended there,” LePage said. “Now a greater and greater percentage are traditional sellers, who will move up and buy from someone who themselves will move up.”

Upward mobility

Jessica and Josh Rowe exemplify that move-up buyer. The couple, along with their toddler and two French bulldogs, wants to move from San Francisco to the South Bay to live closer to their jobs. They listed their condo in Haight-Ashbury, a three-bedroom remodeled Victorian, at $949,000. It’s likely to go for well above asking price.

“To go from being sellers to being buyers, your confidence gets crazy-hacked,” said Jessica Rowe. “As a seller, you’re on top of the world, you make all this money – but as a buyer you can’t afford to get (something comparable) to what you just sold.”

The Haight condo itself illustrates the market turnaround. When the Rowes bought it three years ago – near the market’s bottom – the previous owners were on the brink of foreclosure. After unsuccessfully listing it at $799,000 for a month, they slashed the price to $755,000, which is what the Rowes paid.

The Bay Area’s median price is now 15.5 percent off the $665,000 peak it reached in summer 2007, LePage said. During the downturn, its nadir was $290,000 in March 2009.

The median represents the middle value of homes sold, meaning half sold for more and half for less. DataQuick said about three-quarters of the median’s increase stems from rising home values, the remainder from a shift in market mix.

More high-end homes and fewer inexpensive ones sold in July. Just over half (51 percent) of sales had mortgages above the old jumbo limit of $417,000, compared with 38.6 percent a year earlier and the low point of 17.1 percent in January 2009.

Federal Housing Administration loans, mostly used by first-time buyers, were 10.6 percent of purchase mortgages in July, down from 16 percent a year earlier. First-time home buyers consistently report getting squeezed out by investors and others paying all cash.

All-cash sales continued to be a strong force, accounting for 24 percent of July purchases, DataQuick said. In February, they peaked at 32.3 percent of sales.

Absentee buyers, who are mainly investors, snapped up 20.9 percent of Bay Area homes in July. Their market share also peaked in February, at 28.7 percent.

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

Article source: http://www.sfgate.com/business/article/Bay-Area-home-prices-sales-climb-in-July-4736589.php

Changes to jumbo loans kick market while it’s down

Tue, 02 Aug 2011 10:39:31 +0000

Barring last-minute action by Congress, many Bay Area home shoppers will soon find it harder to buy more expensive homes because of changes in eligibility requirements for a popular type of mortgage.

Starting Oct. 1, interest rates on loans between $625,500 and $729,750 will increase, potentially raising monthly mortgage payments by hundreds of dollars.

Before the change, loans up to $729,750 qualified for a reduced interest rate.

Private lenders say they’re ready to pick up the slack. But real estate professionals are afraid that higher interest rates and down payments will make buying a home more difficult at a time when the market is still weak.

“It’s a big mistake,” said Ken Rosen, chairman

of Rosen Consulting Group, a real estate market research firm in Berkeley. “It’s the right policy in the long run but the wrong time to do this. If there was one single smart person in Washington they would say we want to encourage lending at the bottom of the cycle. Let’s get prices up 5 or 10 percent first.”

The break for homebuyers and those looking to refinance in high-cost areas like Silicon Valley stemmed from emergency legislation passed by Congress during the 2008 credit crunch.

Shrinking limits

The law — called the Housing and Economic Recovery Act — raised the maximum amount permitted on mortgages that qualify for Fannie Mae, Freddie Mac and Federal Housing Administration programs.

Those loans have the implied backing of the U.S. government, which lowered their interest rate.

Now, under a complicated formula in the same legislation, five Bay Area counties will see the maximum drop from $729,750 to $625,500 on Oct. 1. Bigger loans will have to come from private lenders at interest rates that are about half to three-quarters of a percent higher.

The change would add $217 a month to a mortgage payment on a $725,000 loan if the Fannie and Freddie rate were 4.375 percent, when the private rate was 4.875 percent.

“While the interest rates are slightly higher, those are still extraordinarily good mortgage rates. They shouldn’t affect buyers’ ability to buy a home nor desire to buy a home,” said Brad Blackwell, executive vice president and national sales manager for Wells Fargo Home Mortgage.

But Rosen predicted fewer people would be able to buy a home, although the lower limits won’t hit the Silicon Valley as hard as other places because it has “just about the strongest housing market in the country.” The East Bay has a much weaker housing market and will feel the impact more, he said.

The California Association of Realtors, which wants Congress to keep the higher maximum, says nearly 8 percent of home purchases in Santa Clara County could be affected; 11.5 percent in Contra Costa County; almost 10 percent in San Francisco; and about 6 percent in Alameda County.

“This change in policy would definitely have an impact at the worst possible time,” said Robert Kleinhenz, deputy chief economist with the California Association of Realtors. He said the homeowner trying to trade up to a larger home will suffer.

Rep. John Campbell, R-Newport Beach, is co-sponsoring a bill that would extend the higher limits for two more years. Housing Secretary Shaun Donovan, however, said Thursday that lowering the limits was “the right step to take,” and wouldn’t have a big impact on the housing market.

Median price factor

Mortgage brokers and real estate agents say some customers are racing to beat the deadline.

“I am seeing people kind of rush to get in there,” said Andrew Soss, president of the California Association of Mortgage Professionals of Silicon Valley.

Bank of America has already stopped accepting applications for the high-limit loans out of concern that they won’t be completed before the deadline.

The limits are based on median home prices, and in some counties median prices have dropped substantially. Monterey loses more than any other county in the United States: $246,800. Its former limit of $729,750 is being ratcheted down to $482,950 because of declines in home values in the southern, agricultural part of the county.

“It’s a ridiculously huge drop, and a ridiculous equation they are using to formulate this,” said Stuart Shankle, broker at Shankle Real Estate in Monterey. “It’s going to leave a tremendous void in the market.”

Mortgage bankers downplay the impact and say they’re ready for the business the new limits will bring to their doors.

“We view it as more of a little blip,” said Buck Hawkins, vice president of the California Mortgage Bankers Association. “Most of us in the industry suspect the private money will come into that space and compete. It won’t be a subsidized rate. It will be a market rate, about three-eighths to three-fourths basis points higher,” he said.

Matthew Ostrander, a California Mortgage Bankers Association director and co-founder of Parkside Lending in San Francisco, expects any impact to be temporary.

“The Bay Area is going to do OK,” he said.

Contact Pete Carey at 408-920-5419.

Article source: http://www.mercurynews.com/business/ci_18590197?source=most_emailed

Credit Crunch Has Home Builders Sleepless in Seattle

Thu, 17 Mar 2011 02:38:13 +0000

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The only thing more cold and gloomy than my pre-dawn live shot here in Seattle this morning was the February housing report from the Department of Commerce.

Housing starts plunged 22.5 percent in February from the previous month, and building permits, which are an indicator of future activity, dropped 8.2 percent.

You can’t blame it all on the weather either, as starts were even down 28 percent out West.

Some of the housing pundits this morning are saying this is all a good thing, as there is still far too much supply on the market, and builders need to sell all that before they start building more, but tell that to a home builder. The real issue now is credit. The big public builders can get some cash from the banks, but they represent barely a quarter of the market. The private builders are in real need now.

“Our view is that the housing market will start to get back on its feet this year,” notes HIS Global Insight’s Patrick Newport. “The forecast, however, hinges on builders being able to access credit. If builders cannot get financing to build new homes, housing will remain in the dumps.”

Here in Seattle, California-based Shea Homes is going in a new direction for financing, tapping private equity, which appears to be far more willing to back private builders than the banks.

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Article source: http://www.cnbc.com/id/42110876?__source=RSS*blog*&par=RSS

Bay Area home sales down from December but up from last year

Thu, 24 Feb 2011 23:21:05 +0000

Bay Area home sales have dropped since December, but sales are still higher in early 2011 than they were during the same period in 2010, a real estate information service said.

It’s normal for sales to be slow this time of year, meaning January and February are not necessarily predictive of upcoming trends, according to a report by real estate monitoring service DataQuick.

Overall home sales rose slightly in early 2011 compared with the same time last year, with 4,966 sold in the Bay Area, DataQuick said.

Within the Bay Area, Napa County had the highest increase, rising 35.6 percent from last year. Solano County saw the biggest decrease with a drop of 3 percent from last year, according to DataQuick.

New-home sales dropped to their lowest in more than 20 years with 253 sales, DataQuick officials said.

“Builders just can’t build homes that can compete in price with the bargains out there, especially foreclosure resales,” DataQuick president John Walsh said in a statement.

The median price for new and resale houses and condos in the Bay Area dropped to $338,000 in January 2011, compared to $350,000 in January 2010, DataQuick reported.

Sales of higher-cost homes appear to still be suffering from the credit crisis, which made adjustable-rate mortgages and “jumbo” loans more difficult to obtain, the report said.

Jumbo loans, which accounted for nearly 60 percent of the Bay Area purchase loan market before the credit crunch more than three years ago, accounted for only 27.1 percent of January’s purchasing lending, the report
said.

Government-insured Federal Housing Administration loans made up 25 percent of all home purchase mortgages in January.

Monthly mortgage payments are down from last month and last year, according to DataQuick.

The typical mortgage for January was $1,412, compared to $1,558 in December and $1,525 in January 2010.

Foreclosure activity remains high but is below peak levels reached over the last two years, the report said.

Article source: http://www.sfexaminer.com/local/2011/02/bay-area-home-sales-down-december-last-year