homesmillbrae.com » Dozens http://homesmillbrae.com Thu, 20 Oct 2022 03:48:43 +0000 en hourly 1 http://wordpress.org/?v=3.1 Is There a Housing Shortage? http://homesmillbrae.com/1773/is-there-a-housing-shortage/ http://homesmillbrae.com/1773/is-there-a-housing-shortage/#comments Sat, 20 Oct 2012 01:16:35 +0000 http://homesmillbrae.com/1773/is-there-a-housing-shortage/ Continue reading →]]>

3dd68 sold 200 Is There a Housing Shortage?

It’s hard to imagine, given that the nation’s housing market is still digging itself out of an epic foreclosure crisis, that there just are not enough homes available to buy. That, apparently, is the case, according to the National Association of Realtors, who blame a drop in home sales on an “acute lack of supply” in certain formerly hot markets.

“Recent price increases are not deterring buyer interest,” notes Lawrence Yun, NAR’s chief economist. “Rather, inventory shortages are limiting sales, notably in parts of the West.”

A little perspective.

The housing recovery has largely been driven by investors on the low end of the market. Cities like Phoenix, Las Vegas and Sacramento, CA, where the foreclosure crisis hit hardest and where home prices fell the most, were swarmed by these investors, who were looking to convert this distress into rental rewards. Witness, sales of homes priced under $100,000 in the West are down 47 percent from a year ago, according to the Realtors. This after investors drove prices notably higher. Distressed sales made up just 24 percent of total home sales in September, while they had been making up over one third of sales for the past two years.

(Read More: Home Prices Find New Peaks in Dozens of Cities)

So where is all this distressed supply, given that there are still 5.45 million homes with mortgages that are either delinquent or in the foreclosure process (per LPS Applied Analytics)? Banks are doing more foreclosure alternatives, like short sales, but they are also making more aggressive loan modifications. Bank of America
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3dd68 realtime icon Is There a Housing Shortage?] this week announced that in the past five months it has reduced principal on 30,000 troubled loans, with an average reduction of $145,000. This as part of the mortgage servicing settlement signed early this year. Loan modifications with reduced principal have a much lower re-default rate.

Yun suggests that builders need to really ramp up production in order for home sales to recover more.

Housing starts for single family homes in September were up 43 percent from a year ago and building permits up 27%, but the real volumes are still about half the normal level. New homes are popular with first-time home buyers, who are only making up 32 percent of the market, whereas they normally represent about 45 percent. That is due to still tight credit conditions.

(Read More: Is Housing Recovering as Much as Everyone Thinks?)

The biggest problem is that regular home sellers are not putting their homes on the market at a high enough rate to offset the drop in distressed volumes. Why? Part of it is still a lack of confidence in the market, but most of it that, as of August, about 15 million homeowners still owed more on their mortgages than their homes were worth, according to Zillow. That’s 31 percent of homes with a mortgage. Negative equity and near negative equity is largely what is holding the market back now, even as distressed homes slowly move out of the system.

(Read More: Apartment Demand Ebbs as ‘Avalanche’ of New Units Open)

Given the huge drops in sales and inventory out West, which had been driving much of the gains in the overall market, some analysts predict deeper sales drops in the coming months. While sales of higher priced homes are up considerably from a year ago, they still make up a very small share of the total market. About 65 percent of the market is made up of homes priced lower than $250,000. These are a lot of numbers to digest, but they add up to a still bumpy recovery ahead for housing.

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Questions?  Comments?  And follow me on Twitter @Diana_Olick

Is There a Housing Shortage?

Article source: http://www.cnbc.com/id/49476348?__source=RSS*blog*&par=RSS

]]> http://homesmillbrae.com/1773/is-there-a-housing-shortage/feed/ 0 Peninsula rents going the way of SF and Manhattan http://homesmillbrae.com/1664/peninsula-rents-going-the-way-of-sf-and-manhattan/ http://homesmillbrae.com/1664/peninsula-rents-going-the-way-of-sf-and-manhattan/#comments Mon, 20 Aug 2012 02:05:27 +0000 http://homesmillbrae.com/1664/peninsula-rents-going-the-way-of-sf-and-manhattan/ Continue reading →]]> San Francisco and Manhattan are famously unaffordable cities to rent in– not that such information discourages people from renting in either location. High demand, of course, is part of the sky high prices.
But according to a new study by Apartment List.com, Peninsula rents are quickly  rising to rival those of San Francisco proper.  Over both 12-month and 18-month periods in the area as a whole, rents have risen an average of 10% and 18%, respectively. Here’s a run down of their data, showing rent changes for different sized units. (UPDATE: This chart is a corrected version of the previous one that contained incorrect percentage numbers.)

e0fbf chart1 600x227 Peninsula rents going the way of SF and Manhattan

Rents going up…and up! Data via ApartmentList.com

In terms of where to find the highest demand, Apartment List doesn’t have data on every city on the Peninsula, but reports that Mountain View jumped 45%, San Mateo jumped 54% and Sunnyvale jumped 40%.Over the last 12 months, the cities rank in this order (aggregate rise = 10%)

Clearly, the recent tech boom has a lot to do with this rent spike. The high salaries of this industry creates a competitive rental market, whereby landlords can ask higher rents. Tenants may end up offering even more than that rent, in order to stand out from the dozens of other people applying for an apartment.

John Kobs, CEO of Apartment List points out that another big factor is inventory of homes for sale. “For the past two years the available inventory of for sale homes in the Bay Area has been at an all-time low.” As a result, many people who want to buy are forced to become renters instead, unable to find a home for sale. And logically, “these people who are able to buy have higher income on average than renters, and are therefore able (and willing to) pay more rent. The supply side of for sale housing is a key driver in the increase in rents.”

Local Experiences

Many of us have friends looking for apartments now reporting back with horror stories– or maybe we have those horror stories ourselves: incredibly high rents, hundreds of people looking at available units, desperate applicants offering everything from home baked cookies to cold, hard cash to sweeten their chances. But can it all continue? Readers, is there any end in sight for rising rents in the Bay Area?

Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert.

Article source: http://blog.sfgate.com/ontheblock/2012/08/16/peninsula-rents-going-the-way-of-sf-and-manhattan/

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