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Bay Area rents, home prices up sharply

Thu, 03 Jan 2013 07:04:47 +0000

If you’re seeking a new pad in the Bay Area, you can expect to pay more than a year ago whether you’re buying or renting, according to a report released Wednesday.

Asking prices for homes for sale around the Bay Area rose substantially in December compared with the same time last year, according to San Francisco real estate website Trulia, ranging from a 16.3 percent spike in tech-fueled Santa Clara County to a 7.6 percent increase in Napa County. The nine-county Bay Area saw an average increase of 13 percent. By comparison, asking prices nationwide rose 5.1 percent in December compared with December 2011, Trulia said.

“Both job growth and tighter inventory gave (sale) prices a lift,” said Jed Kolko, Trulia’s chief economist. “Price increases accelerated throughout 2012, getting bigger as the year went on.”

Analyzing asking prices of homes currently for sale provides a leading indicator of what sales numbers are likely to look like in a few months’ time, Trulia said.

Data on sales throughout much of 2012 have shown the housing market recovering from the extended downturn that started in 2007.

Nationwide, Trulia said, “2012 marked a huge turnaround year for most local housing markets” with prices increasing in 82 of the 100 largest metro areas in December. In December 2011, only 12 markets had price increases.

Las Vegas, Seattle and Phoenix were Trulia’s “top turnaround” markets, followed by Oakland metro (Alameda and Contra Costa counties) and San Jose metro (Santa Clara and San Benito counties).

California cities such as Sacramento and Fresno that were devastated by the housing crisis also saw strong gains in 2012, Trulia said.

“Nine of the top 10 turnaround markets in 2012 were in the West,” Kolko said. “The only one east of the Rockies was Atlanta.”

Asking rents also rose, with Alameda County seeing the biggest spike (13.2 percent) and already pricey San Francisco the least (2.9 percent), Trulia said. The average increase for eight Bay Area counties (Napa did not have enough data) was 7.8 percent. Nationwide, rents grew 5.2 percent.

“We’re seeing rent increases across the region,” Kolko said. “In San Francisco they were smaller because rents are already so much higher there than elsewhere and it has had strong rent increases before this. The slower increase doesn’t make the city affordable.”

While rising home prices illustrate a housing market beginning to recover – and to stimulate economic recovery – they of course are not good news for those house hunting.

“They come with the perennial challenge of affordability in the Bay Area,” Kolko said.

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

Article source: http://www.sfgate.com/realestate/article/Bay-Area-rents-home-prices-up-sharply-4163037.php

Home Improvement Shows Gains—But May Not Last

Tue, 14 Aug 2012 19:30:32 +0000

The nation’s largest home improvement retailer, Home Depot, surprised the Street on Tuesday, beating profit estimates for the last quarter. It is also raising earnings outlooks for fiscal 2012.

It’s banking on continued improvement in market share and in the housing market, especially in California and Florida, which were two of the worst hit states in the recent crash.

Those two states were among the top sales performers for Home Depot
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] in the quarter. (Related: Home Depot Earnings)

“These are encouraging signs of stabilization in the housing market,” said Home Depot Chairman and CEO Frank Blake on an investor conference call.

As some analysts claim the housing market is rising from the bottom, citing the highest level of housing starts in three years, others caution that the ills still plaguing the market stand as severe headwinds to the home improvement retailers in general.

The foreclosure slowdown to a five-year low, said California-based analyst Mark Hanson, could hurt the likes of Home Depot. He cites the 22 percent (month-over-month) July drop in home sales in Phoenix as an example.

“The Phoenix region is a leading indicator to other more ‘distressed’ regions that made up most of the dead-cat bounce in Q1 and Q2 housing. The foreclosure rehab trade is now a headwind to Home Depot,” Hanson said. (Related: Why Drop in Foreclosures Is Bad for Housing Market)

Hanson expects July existing home sales to come in at the lowest annualized rate of the year. While few others are predicting such a “triple-dip,” Hanson has been warning for months that a drop in distressed supplies would stem the rebound in home sales, and it did just that in May and June.

This is not to say that the foreclosure crisis is gone, just perhaps delayed for the next few quarters. There are still 5.7 million loans that are either delinquent or in the foreclosure process, according to the latest reading from Lender Processing Services. While not all of those loans will go to final foreclosure, many of them will, and there is a huge cadre of hungry investors waiting to buy them up and do quick rehabs in order to rent them out.

Along with foreclosure issues, rising mortgage rates could also thwart some home improvement gains. Record low rates have prompted a surge in refinancing, giving many Americans extra cash to spend on remodeling. Home Depot cites sales gains in kitchen and bath, some of the first projects homeowners undertake when they have the means to do so.

“Today’s rates on the street are the highest since the last week in May, back at 4 percent,” said Hanson (quoting no-point to no-cost loan rates).

He also also noted most of those who could benefit from rates below 4 percent already refinanced in June and July. “Thus the cliff dive in weekly mortgage applications over the next three weeks will be one for the record books.”

—By CNBC’s Diana Olick

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48662461?__source=RSS*blog*&par=RSS

Home Prices See Gains, But That’s Not the Whole Story

Tue, 05 Jun 2012 18:21:33 +0000

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It is not exactly a trend, but for the second-straight month, U.S. home prices saw year-over-year gains.

Including distressed sales (foreclosures and short sales), prices rose 1.1 percent in April, according to a new report from analytics firm CoreLogic.

Excluding distressed sales, prices rose 2.6 percent. Prices have not been up two months in a row since June 2010, when the home buyer tax credit was in force.

The national gains, however, belie a deeply disparate state-to-state housing market.

Home prices rose dramatically in markets where distressed homes make up the majority of sales, like Arizona, up 8.8 percent annually and Florida, up 5.5 percent. That’s because inventories of foreclosures have shrunk due to more slowdowns in bank processing.

Meanwhile other states with relatively smaller shares of distressed sales saw prices plunge: Delaware, down 10 percent, Alabama down 4.4 percent and Connecticut down over 2 percent, according to CoreLogic.

The spring sales season, while not exactly robust, was busy, especially for investors in distressed properties.

As for the summer, the numbers do not look as strong. After two months of gains, asking prices on for-sale homes, a two-month leading indicator, were unchanged in May month-to-month, according to a new report from sale site Trulia.com.

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Article source: http://www.cnbc.com/id/47689898?__source=RSS*blog*&par=RSS

Bay Area property tax decline seems to be ending

Sun, 11 Sep 2011 10:33:34 +0000

The beleaguered housing market may finally be bumping along the bottom, according to Bay Area county assessors, whose jobs rest on gauging the state of real estate.

After two years during which tax rolls in most of the nine Bay Area counties shrank, often by large margins, this year property tax rolls are fairly flat compared with last year, the assessors said. Admittedly, they’re being compared with a lower base.

“We’re in a holding pattern,” said Marc Tonnesen, assessor for Solano County, one of the areas hardest hit by the foreclosure crisis. Solano’s tax roll was down just 1.56 percent this tax year, after falling 3.62 percent last year and 11 percent the year before. Two cities, Benicia and Fairfield, actually posted gains in their property tax rolls, he said.

One trend is that assessors are starting to restore assessed value to some properties whose tax bills were reduced during the downturn. Under California’s Proposition 8, assessors must reduce a property’s tax value when it drops below the market rate and then restore the value as the market improves.

“We’re beginning to see signs, however meager, of improvement in the market,” said Larry Stone, Santa Clara County assessor. The county partially restored value to 45,000 properties, largely in more affluent areas, he said. Overall, Santa Clara’s assessment roll was up 0.88 percent this year.

Its gain was almost perfectly in line with the increase in inflation allowed under Proposition 13. Under Prop. 13, properties’ tax value can increase 2 percent per year or by the California consumer price index, whichever is less. This year the index was 0.753 percent. (The increases in value for previously reduced properties are an exception to the Prop. 13 cap.)

Santa Clara, whose county seat is San Jose, acts as a leading indicator of market trends, said Bill Rousseau, chief deputy assessor in Sonoma County. “It’s usually a couple of years ahead of the Bay Area,” he said. “In the 1990s, after the downturn, Santa Clara came back about two years before we did.”

San Francisco, which has been the most bulletproof county during the downturn, was the only one where the roll rose last year (by 4 percent). This year, it was up by 1.3 percent, the biggest increase of any county.

“Our residential market bottomed out last year and it is still on the road to recovery,” said Assessor Phil Ting. “We haven’t seen properties being restored to prior values yet, but we will probably see that in the next year or two.”

Some hard-hit counties are still struggling to dig out. Contra Costa’s tax roll was almost flat after falling 3.39 percent last year and 7.6 percent the year before. About half of the properties – 180,000 – got their assessments reduced because they’re worth less than their base year factored value (the sales price plus the annual inflation factor). While 2,000 properties saw some values restored, most were bumped up only marginally, said Gus Kramer, county assessor.

Compared with coastal areas with job centers, Contra Costa lags, he said.

“Santa Clara and San Francisco counties are both basically hubs of the high-tech industry,” he said. “We don’t have that here in Contra Costa. Unemployment is still extremely high in this county.”

Meanwhile, San Mateo County has not seen a recovery yet, said Assessor Mark Church. “The market is still struggling to correct and is weak,” he said. “We continue to experience declines in value in some areas but we’re also experiencing some restorations in value.”

Alameda County is a microcosm of the scattershot way real estate markets recover. While 83,700 properties were assessed lower than their base value this year, 22,800 had value partially restored (which still means they are lower than base year value) and another 2,600 were fully restored to their pre-downturn values, plus the annual inflation factor.

Properties getting a bump up in value after having declined “seem to be all over the county in different (price-point) stratas,” said Assessor Ron Thomsen.

E-mail Carolyn Said at csaid@sfchronicle.com.

This article appeared on page D – 1 of the San Francisco Chronicle

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/09/10/BUJG1L0PG9.DTL