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Corelogic: There is no housing bubble

Sat, 20 Jul 2013 15:27:51 +0000

Rising mortgage rates will help to temper the possibility of a bubble as well, but they will not cut into demand dramatically, as some have predicted, according to Fleming.

“Buyers buy based upon payment, and those payments are still highly affordable relative to their incomes,” he said. “Even with 100 basis point swing, there’s still plenty of room in that [affordability] index.”

The concern, however, has been that as mortgage rates rise, home prices would necessarily fall, as buyers lose purchasing power. That may not be the case, according to a new analysis.

(Read more: Map: Tracking the US real estate recovery)

“History shows that a rapid rise in interest rates tends to have little correlation with home prices. Rather, rising rates are more likely to contribute to a decrease in home purchase volume and an increase in the market share of adjustable-rate mortgages,” wrote Mark Palim in a Fannie Mae commentary.

Article source: http://www.cnbc.com/id/100890224

Home price gains not enough for a ‘bubble’ say economists

Tue, 16 Jul 2013 21:18:35 +0000

Rising mortgage rates will help to temper the possibility of a bubble as well, but they will not cut into demand dramatically, as some have predicted, according to Fleming.

The concern, however, has been that as mortgage rates rise, home prices would necessarily fall, as buyers lose purchasing power. That may not be the case, according to a new analysis.

(Read more: Map: Tracking the US real estate recovery)

Article source: http://www.cnbc.com/id/100890224

Regular folks transform into cash buyers to compete in hot housing market

Sat, 29 Jun 2013 14:16:58 +0000

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“Cash is king” is an all-too-true cliche in today’s Bay Area real estate market, where all-cash offers can beat out those with mortgages, even when the financed offers are higher. That’s motivating some folks — even fairly regular people who don’t have Silicon Valley mega-bucks — to go the extra mile to be able to make cash offers.

Whether it’s borrowing from relatives, taking out a home equity loan, tapping retirement funds, or a combination, having that cash in hand can vault a buyer to the front of the line. For a detailed look at how some ordinary people took extraordinary steps to become cash buyers, click here.

“It’s an oft-told tale right now,” said Stuart Maus, an agent with Red Oak Realty in the East Bay. “The market is super-competitive. A cash buyer can afford to lay up a little bit, knowing that the terms of all cash and the ability to have a short close may counter a slightly higher offer with a longer escrow period. A buyer with all cash can sharpen their pencil and come in more aggressively with price.”

Consider 3361 Victor in Oakland’s Redwood Heights neighborhood (pictured above). The modernist home closed in late April for $820,000, 19 percent over asking.

“The winning buyer paid all cash with no loan or appraisal contingencies and a three-day inspection period,” said Aman Daro of Red Oak Realty (Red Oak’s Deidre Joyner was the listing agent). “There were three offers. The highest offer had inspection, appraisal and loan contingencies, so the listing agent got the lower, all-cash offer to up their price and the sellers accepted it.”

Shana Negin and her husband, who both work as technology creatives, got financial help from her parents for an Oakland home, in which all four of them put their names on the deed.

“They wanted to put some of their retirement investments into something stable and also wanted to help us out,” she said. “Even though we have a pretty decent income, we were never going to have an opportunity to buy a house without that kind of help,” she said. “In a broader picture, people’s parents have been helping them throughout history. If this is a trend, people are just returning back to the way it was.”

Even people who buy with all cash may very well want to get a mortgage afterwards so they can pay back the source of the funds or simply have more liquidity. There are a number of issues cash buyers should consider in structuring their purchase to make sure that their cash-out refinance will go smoothly. For advice from mortgage pros on this, click here.

“A responsible buyer will not only have their cash lined up for the purchase, but will have a plan for how to manage ownership of the property in the year ahead,” said Dianne Crosby, senior vice president of RPM Mortgage in Orinda.

Carolyn Said is a San Francisco Chronicle staff writer. For news and insights on Bay Area real estate, follow her on Twitter: @csaid

Article source: http://blog.sfgate.com/ontheblock/2013/06/07/regular-folks-transform-into-cash-buyers-to-compete-in-hot-housing-market/

Yes, price cuts do still happen on the San Francisco market

Tue, 25 Jun 2013 20:06:37 +0000

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With all the news of a hot market, over-bidding, and homes being bought before they even hit the MLS, we thought a small dose of humble pie might be in order for San Francisco real estate. For instance, despite being 4 beds, 4 baths with a deck, backyard and lower level rec room, the Octavia Street home above hasn’t sold in over 25 days; not only that, it’s had to drop its price $300K in hopes of finding a buyer.

What will it ultimately sell for?

Condos

Condos have been in demand as well, but that doesn’t mean every single one flies off the market at over-asking price. This Bryant St. unit, a loft-like 1 bed, 2 bath with deeded parking, listed in early June for $649K and is now down to $599K.

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What price do you think it might actually get, readers?

Co-ops

Co-ops too, despite the (limited) allure of exclusivity and general rarity they enjoy, have suffered recent price-cuts. This classic example on Gough St., a 4 bed, 3,5 bath in Pacific Heights, has dropped from $2,850,000 to $2,695,000.

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How much will it finally fetch?

We’re hardly pointing out a major reversal in the market. As this infographic courtesy of Paragon Real Estate Group shows, May sales were heavily weighted toward at-or-above-asking prices.

May sales in SF sold largely at or above asking. Courtesy Paragon R.E., SF

Still, 10% of homes sold at less than asking (though not by much), proof of some (waning) buyer power still in existence.

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, and writes for SFGate and CurbedSF. Follow Anna on Twitter: @AnnaMarieErwert

Article source: http://blog.sfgate.com/ontheblock/2013/06/25/yes-price-cuts-do-still-happen-on-the-san-francisco-market/