homesmillbrae.com » Last Spring

As investors shift, housing is the new stock market

Wed, 28 Aug 2013 00:07:29 +0000

Another large-scale investor, Aaron Edelheit, CEO of Atlanta-based The American Home, has a different take on the slowdown in investor demand.

“Last year, the amount of institutional investors activity exploded. What you’re seeing now is the natural digestion of that exponential growth. That means maybe a slowdown in how many home they acquire, it may mean letting go employees in areas where it doesn’t make sense.”

These investors are moving their focus from acquisition to profitability, hoping to show Wall Street that the business model is not only feasible but highly profitable. The American Home now boasts 2,500 homes in Atlanta; Nashville, Tenn.; Orlando and Tampa, Fla.; and Charlotte, N.C.

Edelheit said rental demand is tremendous, and management is working well, but the model is still too green for the larger investment community. “You look at the stock prices of the companies that are public, and it’s pretty clear that Wall Street remains unconvinced in the single family rental model, and I think it’s natural for these firms to start right sizing and make sure that they are profitable.”

That could mean consolidation, with some of the larger firms that have stronger management structures buying up smaller players. Large-scale investors are still a relatively small segment of the 14 million single family rental market, but it appears they are here to stay, despite the recent volatility. Smaller investors, however, may be moving on, having exhausted their cash and their credit opportunities.

(Read more: Home prices across the US defy gravity)

Last spring, Redfin was running seminars for small “armchair” investors on how to buy and manage single family rentals. The classrooms were packed.

“There was a surge because people read the papers—in March, April, there was a bull market in housing. Suddenly at every cocktail party somebody wanted to make a killing in real estate,” Kelman said. “Some wanted to ride the wave, but some just caught it late.”

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Questions?Comments? facebook.com/DianaOlickCNBC

Article source: http://www.cnbc.com/id/100988740

Trulia Classifies Housing Markets in San Francisco Bay Area, Seattle, Denver …

Wed, 06 Feb 2013 04:10:29 +0000

January 2013 Trulia Price Monitor Summary

% change in
asking prices

# of 100 largest
metros with asking-
price increases

% change in asking
prices, excluding
foreclosures

Month-over-month,
seasonally adjusted

0.9%

Not reported

1.2%

Quarter-over-quarter,
seasonally adjusted

2.2%

2.9%

Year-over-year

5.9%

6.5%

Booming Housing Markets Have Both Price Gains and Healthy Fundamentals

Healthy housing markets are defined by strong job growth, low vacancy rates, and low foreclosure inventory. In “booming” markets such as San Francisco and Seattle, rising asking prices are supported by strong job growth and are unthreatened by future foreclosures. However, investor-fueled price increases in “rebounding” markets like Phoenix and Las Vegas are at risk from slow job growth, high vacancies, or future foreclosures. At the other end of the spectrum, healthy markets without dramatic price gains, such as Houston, will continue to hum along after avoiding the worst of the housing bubble and bust. Meanwhile, markets like Chicago continue to struggle without strong market fundamentals or big price gains.

BOOMING

Big price increases and healthier
market
fundamentals.

HUMMING

Stronger market fundamentals
without dramatic price
gains.

REBOUNDING

Big price increases, but weaker
market fundamentals.

STRUGGLING

Neither strong market
fundamentals nor big price
gains.

New Construction Eases Rent Gains Nationally

With more newly-constructed multi-unit buildings coming to completion, rent gains fell behind asking price increases at the national level for the first time since the price recovery began last spring. In January, rents rose 4.1 percent Y-o-Y nationally, slowing down from 4.7 percent in July 2012. Regionally, rent gains cooled the most in San Francisco, where rents rose only 2.4 percent versus 11.5 percent in July 2012. According to the Census, construction activity in San Francisco has been well above normal for the last year, and it’s nearly all in multi-unit buildings.

Where Rent Gains Slowed Down Most

U.S. Metro

% Change in
Rents, Y-o-Y,
Jan 2013

% Change in
Rents, Y-o-Y,
July 2012

Percentage
Point
Difference

San
Francisco, CA

2.4%

11.5%

-9.1%

Portland,
OR-WA

4.7%

9.2%

-4.4%

Seattle,
WA

6.4%

10.8%

-4.4%

Denver,
CO

7.4%

10.3%

-2.9%

San
Diego, CA

2.0%

4.4%

-2.4%

PRE-APPROVED QUOTES

“In many local markets today, dramatic price gains can mask serious
red flags,” says Jed Kolko, Trulia’s Chief Economist. “Strong job
growth, low vacancy rate, and low foreclosure inventory–not huge price
gains–are signs of a healthy housing market. Without strong underlying
market fundamentals, price rebounds might be here today, but gone
tomorrow.”
“Rent gains are slowing down because of more supply, not less demand,”
explains Jed Kolko, Trulia’s Chief Economist. “Many of the multi-unit
buildings that have been under construction over the past two years
are now coming onto the market. Renters in San Francisco, Seattle, and
Denver are starting to get a touch of relief, even though rising
prices might put homeownership out of their reach.”

MULTIMEDIA

To read the full report, see here.
To download the full list of price and rent changes for the largest
metro areas, see here.
To download a graph of price changes from January 2011 to January
2013, see here.
To download a scatter plot graph contrasting price trends with the
market’s health for the 100 largest metros, see here.

METHODOLOGY

To view the full methodology and 2013 release schedule, see here. The next release of the Trulia Price Monitor and the Trulia Rent Monitor will be Tuesday, March 5, at 10 AM ET.

ABOUT TRULIA, INC.

Trulia (NYSE: TRLA) gives home buyers, sellers, owners, and renters the inside scoop on properties, places, and real estate professionals. Trulia has unique info on the areas people want to live that can’t be found anywhere else: users can learn about agents, neighborhoods, schools, crime, commute times, and even ask the local community questions. Real estate professionals use Trulia to connect with millions of transaction-ready buyers and sellers each month via our hyper local advertising services, social recommendations, and top-rated mobile real estate apps. Trulia is headquartered in downtown San Francisco. Trulia is a registered trademark of Trulia, Inc.

Article source: http://www.fortmilltimes.com/2013/02/05/2478046/trulia-classifies-housing-markets.html

Attention Mortgage Shoppers, Could Walmart Be Next?

Sat, 08 Dec 2012 16:43:48 +0000

They also want better service and transparency.

Although most respondents to the survey showed satisfaction with primary banks (81 percent), many expressed frustration that could push them to find a lending alternative. Top on the list of gripes: “slow execution.” More than half of consumers say the process needs to be faster. Others cited difficulty with communications, inability to track the status of the application and even untrustworthy advice.

“I think they trust good service, word of mouth and experience, and when they get those things, the survey shows, it’s less about them being a bank and more about reaching the values that are core to them. That’s trust, service and price,” adds Hautop.

Familiarity is also a driving factor.

Most banking is done online today, with many consumers rarely if ever going into a retail bank. These same consumers are making weekly trips to discount retailers. As the mortgage market now shifts from a largely refinance trade to purchase applications for a home, banks need to take that level of exposure and the information about a captive audience and translate that into increasing market share.

Read More:(Fannie, Freddie Place Evictions on Hold for the Holidays)

Warehouse giant Costco got that message last spring, announcing a new mortgage lending program with New Jersey-based First Choice Bank. Costco itself doesn’t lend but gathers quotes from other lenders, so that the customer can comparison shop, essentially a marketing service.

Bottom line, consumers want to trust their lenders again. Retail giants don’t have to deal with the legacy of lending ills uncovered after the housing and mortgage crash. Armed with new federal regulations designed to insure truth, clarity and transparency in lending, consumers now feel more protected when shopping for a mortgage and may be more willing to shop outside the bank.

Read More: Housing Next Year: Prices Will Rise – 2013 Predictions)

—By CNBC’s Diana Olick; Follow Her on Twitter @Diana_Olick and on Facebook.

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100001629

Housing Alert: Short Sales May Be in Big Trouble

Sat, 29 Sep 2012 00:03:34 +0000

As lenders plow through a backlog of over five million delinquent mortgages, short sales are becoming an ever more popular escape route. A short sale is when the bank allows a home to be sold for less than the value of the mortgage. The bank takes the loss, but that loss is generally less than a more costly foreclosure.

The government has been pushing more short sales at Fannie Mae and Freddie Mac through financial incentives, and banks are streamlining the process. Short sales have been gaining so much steam, they actually surpassed sales of foreclosed properties last spring, according to LPS Applied Analytics’ Home Price Index. But all the progress that has been made could end abruptly.

A short sale is debt forgiveness. Debt forgiveness is taxable. In order to help the huge volume of troubled borrowers and promote more short sales, Congress in 2007 passed the “Mortgage Forgiveness Debt Relief Act and Debt Cancellation.” The debt forgiveness from a short sale or a mortgage principal reduction would no longer be taxable. That act is part of many Bush era tax cuts that expire at the end of this year. Without an extension, short sales would grind to a halt, as might mortgage modifications that involve principal reduction.

“Realtors believe if the legislation is not extended, households who are already struggling to pay their mortgages will be further burdened with tens of thousands of dollars in additional taxes that they probably can’t afford to pay because the IRS would count the cancelled debt as income,” said Jamie Gregory, a lobbyist for the National Association of Realtors. (Read More: After Brisk Summer, Pending Home Sales Drop in August)

Short sales and mortgage principal reduction are the foundation of the $25 billion mortgage servicing settlement signed early this year by the nation’s largest lenders and state attorneys general. As of the end of August, first lien principal reduction trial modifications were offered and begun for about 28,000 homeowners, totally approximately $3 billion of potential relief, according to the settlement monitor, Joseph A. Smith. Banks have granted $10.6 billion in consumer relief, which would include short sales. More than a quarter of a million short sales were completed in the first half of 2012, according to RealtyTrac.

So what is the possibility of congress extending the tax relief? One Hill-watcher puts it at 60-40. The Senate Finance Committee passed a package of tax extenders right before the recess, including a one year mortgage relief extension, but leadership in the House of Representatives has not figured out how it wants to handle these extenders. With the looming “fiscal cliff,” tax cuts are an increasingly tough sell. This particular extension does have bipartisan support, but that doesn’t always mean passage in Congress, especially around a presidential election.

“It could be an uphill fight to get this passed this fall, as it will likely get caught up in larger debate of over taxes, deficits and the financial cliff. But we believe that it is a helpful provision for distressed borrowers, as getting a tax bill on forgiven debt can be another punch in the gut for families who are already facing financial hardship,” says David Stevens, president and CEO of the Mortgage Bankers Association. (Read More: Is Housing Risen From Ashes? ‘Industry Has Come Back’)

Rep. Jim McDermott (D-WA), who introduced legislation last March to extend the tax relief for three years said in a release, “Collecting federal income tax on relief intended for struggling homeowners is not only bad policy, but is simply wrong.”

With great uncertainty as to the fate of the tax relief, some say short sales could get a boost this fall. Borrowers and banks alike may rush to get in before the expiration, which could help boost overall home sales numbers.

Sector Watch: US Home Builders

—Toll Brothers
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—DR Horton
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—Hovnanian Enterprises
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—PulteGroup
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—Ryland Group
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—Lennar Corp
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—Beazer Homes USA
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—Meritage Homes
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—KB Home
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Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/49214903?__source=RSS*blog*&par=RSS

Why Rise in Home Prices May Not Mean Much—Yet

Wed, 01 Aug 2012 23:40:12 +0000

Average home prices through May increased for the second month in a row, according to the latest SP/Case-Shiller Home Price Indices, which measure both the top ten and top twenty housing markets in the US.

Prices are still down from a year ago, but those annual drops are improving.

“On a monthly basis, all 20 cities and both composites posted positive returns and 17 of those cities saw those rates of change increase compared to what was observed for April. Seventeen of the 20 cities and both Composites also saw improved annual rates of return,” notes SP’s David Blitzer.

“We have observed two consecutive months of increasing home prices and overall improvements in monthly and annual returns,” he added. “However, we need to remember that spring and early summer are seasonally strong buying months so this trend must continue throughout the summer and into the fall.”

This is not the first time since the initial home price collapse in 2006 that we have seen prices rise, only to fall again. We saw large price gains in 2009, thanks to the home buyer tax credit, and we saw slight gains last spring due to some seasonality and a big run on distressed properties by investors.

So how do we know if the latest gains we are seeing are here to stay?

Much of the answer lies in foreclosures. Many markets have seen their supply of foreclosed properties fall dramatically, due to huge investor demand.

Take Phoenix, for example, where investors claim there is just not enough to buy. Home prices there are up 11.5 percent from a year ago.

Miami and Tampa are also seeing solid gains. But Atlanta continues to be the weakest spot; as foreclosure supplies there surge, prices are down 14.5 percent.

Foreclosures are falling nationwide, but the crisis is far from over, and the concern is that all the delays in foreclosure processing will continue to wreak havoc on home prices for at least another year, if not longer.

There were 1.4 million homes in some stage of foreclosure in June, down slightly from 1.5 million in June of 2011, according to a new report from CoreLogic.

Completed foreclosures, however, fell more dramatically, down 24 percent from a year ago. This is likely due to renewed loan modification efforts by lenders, as well as new state legislation, that are keeping many homes from final foreclosure.

The big questions continue to be how long these foreclosure delays will last and how successful foreclosure alternatives and loan modifications will ultimately be. And these numbers don’t include loans that are delinquent but not yet in the foreclosure process. Those number around 3.6 million according to Lender Processing Services.

With so many different home price surveys showing gains this spring, and in the absence of a home buyer tax credit, it would appear that this price recovery is the real thing.

But there is in fact one government stimulus in play that some have been discounting, and that is record low interest rates. Those low rates should be giving home buyers even more purchasing power than we are seeing in the price numbers.

The concern is that these price gains are largely on the low end, distressed sector, where the bulk of home sales are right now. Lack of supply is pushing prices up there, but not, perhaps, in the rest of the market, where sales are still sluggish, and buyers need mortgages, unlike so many all-cash investors.

While some housing analysts have already called a bottom to home prices, others warn we may not have seen the last of the losses.

The spring market was slightly better than expected, especially for the home builders, but we have to remember that the builders and the overall housing market are not necessarily the same.

Home builders may be seeing gains due to the drop in supply of distressed properties, but that drop in supply could in turn slow the existing home sales market and push price numbers down yet again.

-By CNBC’s Diana Olick
Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48417387?__source=RSS*blog*&par=RSS

PriceSquares.com Goes Live in the North Bay

Tue, 29 Nov 2011 00:56:44 +0000

SAN FRANCISCO, CA, Nov 28, 2011 (MARKETWIRE via COMTEX) –
Last spring, Oliver Burgelman, Realtor with Zephyr Real Estate,
developed a new market-tracking website tool called PriceSquares.com.
The site originally covered properties in San Francisco, but the
demand for expansion quickly became apparent, particularly for the
North Bay. Consequently, the site now includes Marin, Napa, Sonoma,
Solano and Mendocino counties. The site also has undergone some
visual changes for a cleaner and more user-friendly interface.

The website instantly displays a map grid indicating whether the
average price per square foot is increasing or decreasing and shows
properties currently available for sale by MLS district, zip code,
neighborhood (in San Francisco), or by a customized “price square” of
the viewer’s choosing. The highest and lowest priced properties in a
given area are also clearly indicated on the map.

Originally developed for his own use and that of his clients, the
value of Burgelman’s website has received praise and recognition,
creating quite a stir in the blogosphere including noteworthy
mentions on Curbed SF and The Front Steps.

The website is easy to navigate with a fountain of useful information
and tips as well as convenient instructions for maximizing its
usefulness as a market tool. Opening a free user account is not
necessary to use the site. However, an account allows one to follow
properties, save information, analyze sold properties, receive
property updates and be alerted to new listings. Registered users may
also add comments to viewed properties, which are then visible to all
site visitors.

“The response to Price Squares has been very gratifying, from clients
and colleagues alike. I initially created this to save time searching
multiple websites to find this information, and it’s nice to see so
many others appreciate its convenience as well,” commented Burgelman.
“I am already working on expanding into more market areas.”

Burgelman, who partners with Mike Ackerman at Zephyr Real Estate, is
one of the company’s Top Producers and is an e-PRO Internet
Professional. He is a Certified Residential Specialist, a member of
the San Francisco, California and National Associations of
REALTORS(R) and is fluent in English, Dutch and French.

For more information about PriceSquares.com or information about
other market areas, please contact Oliver Burgelman at
oliver@zephyrsf.com.

About Zephyr Real Estate
Founded in 1978, Zephyr Real Estate is San
Francisco’s largest independent real estate firm with $1 billion in
annual gross sales in 2010 and a current roster of more than 200
full-time agents. In 2010, Zephyr launched its new website, which has
earned three web design awards, including the prestigious WebAward
for Outstanding Website from the Web Marketing Association. Zephyr
Real Estate is a member of the international relocation network,
Leading Real Estate Companies of the World; the luxury real estate
network, Who’s Who in Luxury Real Estate; and the local luxury
marketing association, the Luxury Marketing Council of San Francisco.
Zephyr has six strategically located offices in San Francisco, a
business center in Marin County, and serves a large customer base
throughout the San Francisco Bay Area. For more information, visit

www.zephyrsf.com .

Image Available:

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Contact: Melody Brown Zephyr Real Estate San Francisco, CA 415.729.3555 Email Contact

SOURCE: Zephyr Real Estate

http://www2.marketwire.com/mw/emailprcntct?id=BE5CC27F46565942

Copyright 2011 Marketwire, Inc., All rights reserved.

Article source: http://www.marketwatch.com/story/pricesquarescom-goes-live-in-the-north-bay-2011-11-28

Who Will Buy the Foreclosures?

Sat, 21 May 2011 06:20:54 +0000

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Not to sound like a broken record, but only when we work through the vast inventory and shadow inventory of foreclosed properties, can home prices bottom and housing recover overall. Obviously certain markets are more burdened by the distress than others, but it’s a universal truth.

In April, however, the percentage of investors and all-cash buyers in the market dropped a bit. Investors have been buying the lion’s share of foreclosures, as first-time home buyers continue to play a very small role in housing’s recovery. First-time buyers should be about 40 percent of the market, but realtors say they are now about 36 percent. They made up nearly half of the market last Spring, but that was all thanks to the home buyer tax credit.

In addition to a tough job and mortgage market, first-time buyers are also looking at a lot of work when buying a foreclosed property.

I found this survey from Campbell/Inside Mortgage Finance particularly interesting this month:

For the month of April, 45% of foreclosed properties were damaged and not inhabitable without renovation. Because mortgage financing is generally not available for foreclosed properties that need major repairs, investors often buy these properties for cash. Fifty-five percent of damaged foreclosed properties were bought by investors in the month of April, while only 27% were bought by first-time homebuyers.

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Article source: http://www.cnbc.com/id/43111762?__source=RSS*blog*&par=RSS

The Small-Time Landlord Versus Tenant Protection

Sat, 30 Apr 2011 23:01:07 +0000

In San Francisco, one of the toughest places in the country to find a place to live, more than 31,000 housing units — one of every 12 — now sit vacant, according to recently released census data. That’s the highest vacancy rate in the region, and a 70 percent increase from a decade ago.

To know one big reason why, ask Wayne Koniuk. By trade, Mr. Koniuk fashions artificial limbs for amputees. By habit, he fits prostheses at no charge for people who cannot pay. This has left him a less-than-wealthy man.

But he does have one substantial asset: a Divisadero Street building that his father, Walter, an orthotist, bought in 1970 and gave to his only son in 2001 so Wayne could run his business on the ground floor and Wayne’s adult children would always have a place to live.

“For eternity,” Mr. Koniuk recalls his father saying, “my grandkids will always have a place they can go. No matter whatever happens, that building should stay in the family.”

Mr. Koniuk, who himself lives in suburban Belmont, gave a half-interest in the building to his older son in 2007 so he could evict a tenant and move in himself. But under San Francisco’s extraordinarily pro-tenant housing laws, landlords can do this only once per building.

So while Mr. Koniuk desperately wants to move his younger son into the building’s other four-bedroom apartment, he cannot. He is exploring legal options. Robert Murphy, who has lived there for 30 years without a lease, remains, paying $525.82 a month.

Last spring, Mr. Koniuk offered Mr. Murphy $45,000 to move out. Mr. Murphy’s lawyer demanded $70,000, a sum Mr. Koniuk says he does not have. Meanwhile, the city’s Rent Board notified Mr. Koniuk that he was allowed to increase Mr. Murphy’s monthly rent this year by $2.63.

Mr. Murphy did not respond to several phone messages left over a two-week period. Harold Jaffe, the lawyer who wrote the demand letter, said he no longer represented Mr. Murphy.

Increasingly, small-time landlords like Mr. Koniuk are just giving up. One of his Divisadero Street neighbors has left two large apartments on the second and third floors of her building vacant for more than a decade, after a series of tenant difficulties. It’s just not worth the bother, or the risk, of being legally tied to a tenant for decades.

“Vacancy rates are going up because owners have decided to take their units off the market,” said Ross Mirkarimi, a progressive member of the Board of Supervisors. He attributes that response to “peaking frustrations in dealing with the range of laws that protect tenants in San Francisco that make it difficult for small property owners to thrive.”

Perversely, that is hurting the city’s renters as well, as a large percentage of the city’s housing stock is allowed to just sit vacant, driving up rents that newcomers pay for market-rate housing.

San Francisco is a notoriously tough city for small-time landlords. “It is the dream of every landlord to be a landlord in the most lucrative market in the country,” said Ted Gullicksen, head of San Francisco’s powerful Tenants Union. “There’s no sympathy whatsoever.”

Without strong protections, tenant advocates say, only the wealthy would be able to afford to live here. Countless longtime residents, especially the elderly, would be out on the streets.

This is a consensus view in many circles, as illustrated by a recent feature in The San Francisco Chronicle. “Throwing senior citizens out on the sidewalk is never a good idea, but it isn’t stopping North Beach developer Peter Iskander,” it began.

Left unsaid was that one of the article’s featured characters, Carlo Tarrone, pays $450 a month in rent. Or, more significantly, that Mr. Tarrone in 1999 bought (half in cash) a two-unit residential building near Telegraph Hill that the real estate Web site Zillow values at $1.7 million. Mr. Tarrone, whom I interviewed by phone, is by no means poor or facing homelessness.

Mr. Koniuk is not a slick developer who aims to toss widows and orphans into the street. He could sell, but he does not want to. He wants to honor his father’s wishes and allow his own sons to live in his own building.

“My name is Koniuk. My sons’ name is Koniuk. My father’s name was Koniuk,” he said. “We should be able to move them into a building we own.”

estevens@baycitizen.org

Article source: http://www.nytimes.com/2011/05/01/us/01bcstevens.html