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Decrepit Homes in San Francisco Bay Area Fetch Top Dollar for Mountain Views

Fri, 22 Feb 2013 18:37:17 +0000

A sorry-looking shack, with deep cracks in the cinder-block walls and busted windows, that looks like it’s ready to collapse: You wouldn’t pay a dime for that, would you? OK, say it’s nestled in the gorgeous hilltops of the San Francisco Peninsula with no shortage of pristine mountain views. Now how much would you pay? More than $1 million? Well, that’s how much it’s going for.

Even rundown, shabby homes in the San Francisco Bay Area are fetching prices that top-notch single-family homes do. The reason is simple: those gorgeous mountain views. It seems that a great view can get homebuyers to pay top dollar — even if the home itself is nothing to look at. The aforementioned shack? It’s going for $1.275 million. Another home in San Jose, Calif., has a bathroom that hasn’t had any work done to it since the 1930s, a kitchen that’s falling apart and a shabby exterior. The listing agent even admits that he’s “looking for someone to come in, remodel, probably flip this house.” Well, hope the flip nets a big profit because to buy this house as it is, you’ll need $585,000. See the video above to learn why such decrepit homes are going for such high prices.

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Article source: http://realestate.aol.com/blog/2013/02/21/decrepit-homes-mountain-views-san-francisco-bay-area/

Real Estate > Decrepit homes mountain views san francisco bay area Decrepit …

Fri, 22 Feb 2013 00:35:47 +0000

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Article source: http://realestate.aol.com/blog/2013/02/21/decrepit-homes-mountain-views-san-francisco-bay-area/

Renter Nation Rages On

Sat, 28 Jul 2012 11:25:13 +0000

The supply of empty homes for rent is falling, and the nation’s homeownership rate is hovering near a fifteen year low.

How can that be when the housing market is finally turning around and more homes are selling?

The answer is simple: Investors.

The nation’s home ownership rate ticked up a statistically insignificant basis point, from 65.5 percent in the first quarter of this year to 65.6 percent in the second quarter, according to the U.S. Census Bureau. Q1 was the lowest home ownership rate since 1997 and is down from the peak of 69.4 percent in 2004.

Given that home sales improved significantly during the first half of this year, you would think that home ownership rate should have surged higher, but the rate is calculated using only owner-occupied homes. If an investor buys one home or 100 homes, those homes are not even put into the calculation because they owner doesn’t live in the homes. Realtors estimate around 20 percent of homes sales are currently to investors, but given bulk deals offered by the government and banks on foreclosed properties, that percentage is likely higher.

“The very modest increase in the homeownership rate in Q2 does not persuade us to alter our view that the share of the population who own their home will fall further over the next couple of years,” writes Paul Diggle of Capital Economics. “Meanwhile, supply conditions in the rental market are tightening, with a falling proportion of single and multi-family rental homes vacant.”

Rental vacancies in fact fell to their lowest rate since 2001. That is why so many investors are rushing in to buy distressed properties. The rental market his hot and getting hotter. Average asking rent rose 5 percent from a year ago, though they are down slightly from the previous quarter.

Since the peak of home ownership in 2004, six and a half million additional U.S. households are renting, which Diggle calculates is equivalent to 90 percent of the increase in total household numbers over that time. He estimates home ownership will fall to 64 percent over the next two years.

An investor-driven recovery in home sales is certainly positive and is helping to clear the huge backlog of distressed properties on the low end; investors are necessary now, but until real owner-occupants, including the all-important first-time home buyer, return, a robust recovery in all price tiers of the market will remain out of reach.

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48354027?__source=RSS*blog*&par=RSS