This week the social media giant is expected to open its doors to the general public. Overnight, Facebook will become a publicly traded company and a plethora of 20-somethings will see their personal wealth skyrocket.

In April, Facebook estimated its value at $77 billion, but since then the Palo Alto-based company’s worth has been assumed to be somewhere in the $100 billion range. This influx of cash will have a number of impacts, one of which could be the increase in property value.

Using a conservative analysis, Movoto — a real estate brokerage in the San Mateo — estimated that Facebook’s coming out party could increase property value in trendy Bay Area neighborhoods and cities by $1 to 2 billion.

“Competition to buy listed homes in desirable Bay Area zip codes is already discouraging for the average home buyer.” said Mark Brandemuehl, VP Marketing Business Development at Movoto. “The Facebook IPO will only add to the millionaires competing to buy a small number of homes, and it seems inevitable that prices will be driven up.”

To make this analysis Movoto spoke with Carole Rodoni, president of Bamboo Consulting, a Bay Area real estate agent. Rodoni expected overall property value to rise.

She estimated that property value in fashionable areas will increase anywhere from five to 10 percent. This is on top of the area’s typical appreciation. She expected this mini housing bubble to last between a year and 18 months.

Those trendy areas are:

• Pacific Heights;
• Noe Valley;
• South of Market Area in San Francisco;
• Hillsborough;
• Atherton; and
• Palo Alto.

Rodoni called these new renters and homebuyers “shuttle babies” because they prefer to move back and forth between areas. It also means these shuttle babies are looking to move to areas where “you can walk, and within four blocks, you get your whole life.”

How the Math Works:

To figure out how Rodoni’s estimate would translate into a dollar amount, the Movoto team divided the trendy Bay Area locations into two parts: cities such as Hillsborough and neighborhoods in San Francisco.

For the cities, Movoto used Census data to calculate the number of owner-occupied households in the area. After learning this figure, we used housing data to calculate the 75th percentile of current home list prices-or, the most valuable homes on the market, which the wealthy are more likely to purchase. We then applied the estimated five to 10 percent price increase to homes priced at the 75th percentile and above.

Movoto used a similar process for the San Francisco neighborhoods.

A Second Opinion

But like most things, there’s a difference in opinion.

Kathy Krize, a real estate agent in the Menlo Park area, called the local housing market “quirky” and suggested there was a small housing bubble in high-end areas. Nonetheless, Krize was hesitant to attribute the increase in home prices in the Bay Area to Facebook.

“I think all this media hype going on isn’t necessarily true; it may have an impact, but not the impact everyone is talking about,” she said.

She did note that some potential homebuyers believe they need to purchase a home before the newly minted rich do so, and at the same time there are buyers who want to wait to put their homes on the market in the hopes of gaining value.

“The fact is, a lot of them already have the ability to purchase,” she said about Facebook employees. “I think the impact would have been seen already. I’m not seeing a lot of people from Facebook coming into the open houses.”

From her experiences, Krize said that she’s seen an increase in the number of cash offers and noted homes are regularly selling above the asking price. She noted that buyers using more traditional financing are losing out to cash offers.

“It’s a quirky market,” Krize added. “It’s not to say that every home on the market is getting picked up. What I’m saying is that there are a lot of buyers who want to have prime property and there isn’t a lot of prime property on the market.”

Krize offered this example to explain the market trend: She recently listed a two-bedroom, one-bath home in a marginal neighborhood — what she called a great starter house — for $368,000. After five offers the house sold for $420,000.

“There is something going on with the market,” Krize said. “We are seeing it across the board.”

Article source: http://www.huffingtonpost.com/david-j-cross/san-francisco-real-estate_b_1527172.html

Even with inventory (listings) down compared with the same period last year, buyer demand drove an increase in the number of homes sold in Q1 in all our regions. If this trend continues, the total number of homes sold this year could reach 20,850 – and exceed the 10-year average in the Bay Area for the first time since 2005.

While the number of homes changing hands is jumping, price levels overall, on average, are down 1%.  The first quarter report from Better Homes and Gardens Mason-McDuffie Real Estate shows San Francisco and Napa’s median price increasing by 4% and 7%, while Alameda’s median dropped by 10% compared to the first quarter of 2011.  Slim pickings are sparking multiple offers with quality homes in favored locations as inventory is down by more than half compared to last year.

As of the final day of the first quarter, 7,703 existing detached homes were listed for sale across the entire Bay Area, down a staggering 54 percent from 16,669 homes on the market on the same date a year ago.

Even with the lack of homes on the market, it looks like buyers are out of the gates.  In my local Marin neighborhood, newly listed homes that had a hard time selling a year or two ago, where they lingered for over 100+ days and were finally pulled, are getting snatched up within 2-3 weeks.  With the traditional buying season just beginning and the Facebook IPO on its way, this sets the stage for an interesting summer.

Courtesy of Better Homes and Gardens Mason-McDuffie Real Estate

Article source: http://blog.sfgate.com/ontheblock/2012/05/04/bay-area-home-sales-off-to-best-start-since-2005/

WASHINGTON, DC-NAREIT?s Calvin Schnure has crunched the numbers and tells GlobeSt.com?s Erika Morphy that demand will outpace supply until at least 2017.

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Article source: http://www.globest.com/news/12_301/sanfrancisco/leasing/Private-Biotech-Firm-Signs-220000-SF-Lease-319364.html

Existing home sales were basically flat in April, down close to one percent month-to-month and down nearly 13 percent year-over-ear, but you have to remember last year we were heavily under the influence of the home buyer tax credit.

Now we are heavily under the influence of the mortgage market, or lack thereof.

It’s all in the numbers.

Let’s start with all-cash.

Thirty-one percent of buyers in April used all-cash, and that’s down from 35 percent the previous month. It’s likely because the number of investors buying in April also fell. Investors have been the only real fuel in this market, buying distressed properties at distressed prices.

Just look at the share of what’s selling at what price point:

The low end is moving (your investors), and the high end is moving because higher-end folks don’t always need a mortgage; neither investors nor high-end buyers were affected by the home buyer tax credit last year. The trouble is, the middle of the market makes up the lions share of home sales, over 60 percent, and it’s not moving.

What’s also juicing the lower end is the fact that the FHA raised insurance premiums on April 18th, so mortgage applications for FHA loans surged 20 percent in the four weeks before and then fell nearly 27 percent the week after. With that surge, you would have thought we’d see a lot more sales, but that wasn’t the case.

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For the first time in years, a guy who quantifies the foreclosure crisis got to report some good news.

Kyle Lundstedt’s colleagues at LPS Applied Analytics call him Dr. Doom, as he calculates all the numbers for the monthly Mortgage Monitor Report.

But this month he got to report a drop in mortgage delinquencies, down more than 11 percent month-over month, to the lowest level since 2008.

“We’re starting to see that there are a lot of folks who are still hanging in there,” says Lundstedt. “The population is a better credit quality population.”

The subprimes, Alt-A’s, the bad lending of the housing boom, have largely moved through the system already, not to mention that big banks and servicers are getting far more aggressive with loan modifications. One quarter of the loans that were more than 90 days delinquent last year are now current. That’s not to say they will all stay current, but that’s a good sign.

Unfortunately, that’s all Dr. Doom could muster on the bright side: “It’s progress; it’s not game-changing.”

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