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Housing boom sends Bay Area home prices soaring

Wed, 26 Jun 2013 14:07:31 +0000

A housing boom is sending home prices soaring nationwide, with real estate experts saying the San Francisco Bay Area — specifically the East Bay — is leading the way.

In its monthly report on housing prices, the SP/Case-Shiller Home Price Index — considered to be the leading measure of home prices across the country — said Tuesday the average selling price for a home in the San Francisco area jumped 23.9 percent over a 12-month period ending in April.

Jed Kolko, Trulia’s chief economist, told SFBay home prices in the East Bay showed even more dramatic increases:

“Trulia’s Price Monitor, which is a forward-looking indicator of price trends based on asking prices and reports the San Francisco and Oakland areas separately, showed prices up 31 percent in the East Bay year-over-year, the biggest increase among the 100 largest metros in the country.”

Kolko said home prices in other Bay Area counties also increased, but not as much as the East Bay:

“Prices in our San Francisco metro area, which includes San Mateo and Marin counties, were up 20 percent year-over-year, which is also a very steep increase but not as steep at the East Bay gain.”

Though the housing market is rebounding in most cities, a tight inventory of homes across the Bay Area and one of the fastest job growth rates in the nation is helping to boost home prices locally.

And as Kolko points out, home prices in the East Bay saw prices fall sharply during the bust, creating bargains for home buyers.

SP/Case-Shiller says nationwide prices the average price for a home during that same period of time ending in April jumped 12.1 percent — setting a monthly record.

David Blitzer, chairman of the index committee at SP Dow Jones Indices said the housing recovery is looking strong:

“Atlanta, Las Vegas, Phoenix and San Francisco posted year-over-year gains of over 20 percent in April. San Francisco was the highest at 23.9 percent. … Recent economic data on home sales and inventories confirm the housing recovery’s strength.”

Behind San Francisco in showing strong growth was Las Vegas, which saw prices climb 22.3 percent and Phoenix, which saw prices rise by 21.5 percent.

Article source: http://sfbay.ca/2013/06/25/housing-boom-sends-bay-area-home-prices-soaring/

Bay Area housing inventory drops by 30 percent

Sat, 15 Jun 2013 07:29:33 +0000

Fewer Bay Area homeowners listed homes for sale in June than last the same month last year.

Blanca Torres
Reporter- San Francisco Business Times

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Housing inventory was down by more than 30 percent during the past year in the Bay Area, according to real estate website Zillow.

When comparing June of 2013 to June of 2012 in its database of listings, Zillow found there were fewer homes on the market in the San Francisco metro area, but nationwide, the number rose by 5.3 percent.

Zillow listed 4,528 total homes for sale in June of this year, down from 6,496 last year, in the San Francisco metropolitan area including San Francisco, Alameda, Marin, Contra Costa, and San Mateo counties.

In our market, having fewer homes for sale has pumped up prices and sparked bidding wars.

“Inventory will likely remain below year-ago levels for a while yet, as builders ramp up capacity and sellers wait to squeeze every drop of equity from their home before listing,” said Stan Humphries, Zillow’s chief economist.

Experts expect that with prices climbing up, more homeowners will list their properties for sale and prices will stabilize.

“Going forward, as this new supply makes its way to market, we expect the pace of home value appreciation to slow down from unsustainably high annual levels of 5 percent or above to more moderate levels closer to historic norms of 3 percent or 4 percent,” Humphries said.

Blanca Torres covers East Bay real estate for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/06/bay-area-housing-inventory-drops-by-30.html

Where have home prices risen most in the Bay Area? You’ll be surprised

Fri, 07 Jun 2013 19:02:02 +0000

East Bay homes, like this house in Fremont, saw the biggest price gains during the past year in the Bay Area.

Blanca Torres
Reporter- San Francisco Business Times

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Home prices are shooting up across the nation with the Bay Area leading the pack — but which submarket has soared the most? Oakland.

Metropolitan Oakland — which includes much of the East Bay — saw home prices jump 31.2 percent from May 2012 to May 2013, towering above San Francisco with 19.6 percent growth and the San Jose metro area with 23.2 percent, according to Trulia, the San Francisco-based real estate information site. Nationwide, home prices grew by 9.5 percent during the past year.

Everyone keeps talking about how expensive homes are getting in San Francisco, but East Bay prices have more room to grow. Those growth figures over one year look pretty steep — and they are — but you have to keep in mind that prices dropped by greater percentages after the 2008 mortgage crisis.

“Inventory is really low,” said America Foy, an agent with Better Homes and Gardens Real Estate who specializes in the East Bay.

A lack of inventory has led to bidding wars even in lower-cost areas or starter homes, Foy said, but more home owners are realizing that their homes are worth more and putting more homes on the market as demand shows no sign of slowing down.

“Some people have been saving up for the last four or five years, so they are ready to buy a house,” Foy said. “It’s smart to buy a house right now, that’s what people are feeling.”

Trulia looked at how much home asking prices had grown in 100 metropolitan markets in the United States and determined the 10 most expensive markets based on price-growth and percent of income going toward a mortgage.

You see the full list here. Here’s Trulia’s top ten:

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Blanca Torres covers East Bay real estate for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/06/where-home-prices-grew-most-in-bay-area.html

The incredible soaring Bay Area home prices

Thu, 28 Mar 2013 01:02:22 +0000

Tuesday’s SP/Case-Shiller report underscored the rapid run-up in Bay Area home prices, showing that the San Francisco metro area — Alameda, Contra Costa, Marin, San Francisco and San Mateo counties — saw home prices surge 17.5% in January compared to a year ago. That outpaced the national run-up of 8.1 % and was second only to Phoenix.

For a detailed analysis of the numbers and what they mean for the Bay Area, click here.

Bidding wars and multiple offers are the new norm here.

Here’s a look at a San Jose house listed for $1,075,000 that sold for $1,120,000. Redfin agent Ashley Rabello said she had four offers within the first day of listing. The winning offer had no contingencies, a large percentage down, and was significantly higher than the asking price.

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Heavy action at all price points is new — and another harbinger of recovery.

“During the boom and bust, the lower-priced houses had the biggest percentage price increases and then the biggest percentage collapse,” said David Blitzer, chair of the index committee for SP/Dow Jones. That’s because the most-outrageous lending practices — subprime loans, liar loans, no money down — were more concentrated in the low end.

Case-Shiller tracks homes at three price tiers — low (under $383,942), middle ($383,9422 to $681,776) and high (over $681,776). “Until the boom, the three moved together; during the downturn, they spread apart,” Blitzer said. “Now they’re moving in sync again; it’s a sign the market is coming back to normal, behaving a lot less bizarrely than it did before.”

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

Article source: http://blog.sfgate.com/ontheblock/2013/03/27/the-incredible-soaring-bay-area-home-prices/

Home prices in Bay Area up 17.5% in January

Wed, 27 Mar 2013 06:59:10 +0000

Home prices in the five-county San Francisco metro area surged 17.5 percent in January versus a year ago – one of the biggest gains nationwide – according to a key gauge released on Tuesday.

Overall, U.S. home prices registered their biggest annual climb since summer 2006, rising 8.1 percent compared with last year, according to the SP/Case-Shiller composite index. Every one of the 20 major metropolitan areas Case-Shiller tracks posted year-over-year gains. The annual gains accelerated in 19 of the markets, with Detroit the only exception.

“The number that jumps off the page is San Francisco’s 17.5 percent increase in the past 12 months,” David Blitzer, chairman of the index committee for SP Dow Jones Indices, said. “That’s pretty big. Only one city, Phoenix (with a 23.2 percent increase), did better. Compared to the low points, you’re way up there, about 25 percent over the low. It’s a strong comeback.”

Resale homes

Case-Shiller defines the San Francisco metro area as Alameda, Contra Costa, Marin, San Francisco and San Mateo counties. The index tracks sales of the same single-family houses over time, comparing changes with a base value of 100, which represents values as of January 2000.

The San Francisco index is now 147.45, meaning that prices are 47.45 percent above their January 2000 level. The region’s index peaked at 218.37 in May 2006 and hit a low of 117.74 in March 2009 – so prices are still 32.5 percent below their peak, according to the index.

Several forces propel the upward trend, notably an improving economy, low interest rates, tight inventory and fewer foreclosures.

The San Francisco area “is the second-leading place in the country in job creation (after Houston), and doesn’t build a lot of houses, so supply is very tight,” said Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley. “We added 210,000 jobs to the Bay Area in the past 2 1/2 years – that’s a lot of people.”

Similar forces are driving the rental market, which is also experiencing big price run-ups. Exacerbating that situation, the tight for-sale inventory “is forcing a lot of people who want to be buyers to remain as renters,” Rosen said.

Rosen and others said Case-Shiller actually understates the turnaround – prices have risen even more than the index can capture. In part, that’s because it has a long lag time, measuring prices in January. Real estate service DataQuick, for instance, reported that February median sales prices in the nine-county Bay Area were up 24.6 percent compared with the same time in 2012.

“I would say Case-Shiller under-represents,” said Charmaine Frank, Redfin real estate’s area manager for San Francisco, San Mateo, Santa Clara and Marin counties. “The market has taken a pretty dramatic turn since January.”

Cash is the fuel

Like agents throughout the Bay Area, she said there are “enormous bidding wars going on. We see upwards of 40 to 60 offers on some properties; typically the top five to eight will be all-cash buyers.”

The numerous cash sales help fuel price appreciation, she said, because buyers skip getting an appraisal since they don’t have a mortgage. Appraisals, which rely on recent comparable sales, would moderate the rapid run-up.

“There’s a huge shortage of homes on the market right now,” said Cindi Hagley, a broker with the Hagley Group at Prudential California Realty in San Ramon. “For example, there are only 12 single-family homes for sale in Dublin right now. Ordinarily there should be 100 to 150 homes for sale there.”

Patrick Newport, U.S. economist with market analyst Global Insight, said that the rising home prices should help boost the economy further. “They stimulate new construction, and they also help consumer spending because they raise the value of people’s homes,” he said.

With multiple bids and properties selling well above asking price, could another real estate bubble be forming?

“Not yet,” said Rosen. “If they keep (interest) rates this low for two more years, the answer is yes.”

“This time, rapidly rising prices are a good thing,” Newport said. “A lot of homeowners are underwater; this helps them come out of that.”

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

Article source: http://www.sfgate.com/business/article/Home-prices-in-Bay-Area-up-17-5-in-January-4386974.php

South Bay and SF residents are amongst highest earners in the nation

Wed, 20 Feb 2013 12:18:01 +0000

With such high real estate prices, it’s no surprise that Bay Area residents earn some of the highest incomes in the country. After all, how else will you pay for that million dollar house?

Households in the San Francisco and San Jose metro areas have some of the highest incomes in the country.

The U.S. Census Bareau recently announced the results of a study that looked at household incomes over a 5 year period, from January 2006 to November 2011. The San Jose metro region had the 2nd highest concentration of households with incomes in the top 5%, which was defined as earning more than $191,469 per year. In the South Bay, 15.9% of the households are in the top 5%. The San Francisco metro area, defined as “San Francisco – Oakland – Fremont” followed closely, being the 4th on the list of high income earners, with 13.0% of the households’ income in the top 5%. The Stamford, CT and Washington, DC metro areas squeezed in between our two Bay Area regions, taking the #1 and #3 spots, with 17.9% and 14.1% of their households in the top 5%.

As the results only included data up through November 2011, it won’t be shocking if the incomes of Bay Area residents continue to rise given the strong local economy, thanks in large part to the burgeoning tech industry. Will it only push up the real estate markets in these two metro areas?

Article source: http://blog.sfgate.com/ontheblock/2013/02/20/south-bay-and-sf-residents-are-amongst-highest-earners-in-the-nation/

Home prices increased at a six-year high late in 2012, SF had second highest …

Wed, 30 Jan 2013 09:06:01 +0000

WASHINGTON — U.S. home prices accelerated in November compared with a year ago, pushed higher by rising sales and a tighter supply of available homes.

The Standard Poor’s/Case-Shiller 20-city home price index rose 5.5 percent in November compared with the same month a year ago. That’s the largest year-over-year gain in six years.

All but one of the cities in the index posted annual gains. The largest gain was in Phoenix, where prices jumped nearly 23 percent. It was followed by San Francisco, where prices rose 12.7 percent, and Detroit, where they increased 11.9 percent. The index does not cover the San Jose metro area. The real estate information company DataQuick, using a different way of measuring

price trends, shows the median price for existing single family homes there increasing 20.6 percent in December.

New York was the only city to report a drop from a year ago.

Prices also rose in 10 of the cities measured by the index in November from October. That’s up from seven in October from September. The biggest monthly gains were in San Francisco, Phoenix and Minneapolis.

Monthly prices are not seasonally adjusted and frequently decline over the winter. The 20-city index dipped in November from the previous month.

Steady price increases should help fuel the housing recovery. They encourage more people to buy before prices rise further. Higher prices also build homeowners’ wealth, which can spur more spending

and economic growth.

The data “show a broad-based recovery in housing activity and prices across the country,” said Michael Gapen, an economist at Barclays Capital. “We expect this housing recovery to continue in the coming years.”

The SP/Case-Shiller index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The November figures are the latest available.

The index began to show annual gains in June and have been larger each month since. Prior to that, the index had fallen for 20 straight months.

Despite the increases, prices nationwide are still about 30 percent below the peak they reached at the height of the housing bubble in the summer of 2006. They are now at the same level as in the fall of 2003.

Purchases of previously occupied homes rose last year to their highest level in five years. The National Association of Realtors forecasts that sales will rise 9 percent this year. Independent economists have similar forecasts.

Sales of new homes also rose in 2012, although they remain near depressed levels.

Stable job gains and record-low mortgage rates have encouraged more people to buy homes. And the limited inventory of homes for sale has made builders more confident to step up construction. The number of previously occupied homes has fallen to an 11-year low.

Millions of homeowners still owe more on their mortgages than their homes are worth, making it difficult for them to sell. That’s one reason the supply of homes is so tight. But higher home values are lowering the number of those “under water” and should encourage more homeowners to put their homes on the market.

More people are also moving out on their own after living with friends and relatives in the recession. That’s driving a big gain in apartment construction and also pushing up rents. Higher rents are encouraging investors to buy homes and rent them.

The tighter supply of homes pushed builders in December to start work on the most homes in 4 ½ years. Last year was the best year for residential construction 2008, just after the recession started.

Home builders are also benefiting from the rebound. D.R. Horton Inc. said Tuesday that its profit in the three months ended in December more than doubled and orders jumped 39 percent.

“D.R. Horton is the best positioned it has been in its 35-year history,” chief executive Donald Horton said. “We are looking forward to the spring selling season with optimism.”

Article source: http://www.insidebayarea.com/real-estate/ci_22472420/home-prices-increased-at-six-year-high-late

San Francisco 2nd, San Jose 6th least affordable places to buy in the country

Sun, 09 Dec 2012 10:52:17 +0000

We’ve written numerous times about how crazy expensive buying a home in the Bay Area is for the average folk. Out comes another survey, this one by the National Association of Home Builders/ Wells Fargo Housing Opportunity Index, that confirms what we already know about Bay Area real estate. As AOL Real Estate reports, this survey looks at a metropolitan area’s median home price and median income and then determines what percentage of the homes an average homebuyer can afford.

The San Francisco metro area ranks 2nd in the nation in housing affordability

Based on these statistics, the San Francisco metro area was the second least affordable area to buy. With a median home price of $659,000 and median income of $103,000, only 31.4% of homes are affordable to the average Bay Area resident. This wasn’t too far off from New York City, which was the least affordable place to buy, where the average New Yorker could afford to buy only 28.5% of homes there.

Heading south along the bay, San Jose was ranked the sixth least affordable place to buy. The median home price there was $530,000. Median incomes in the San Jose metro area were $105,000 and based on these two numbers, about 46.2% of homes are affordable to the average homebuyer. Better, but still not great.

San Jose is 6th in the country in housing affordability

Interestingly, the article also points out that San Francisco and San Jose were two of only a handful of metro areas where the median income was in the six figures – all thanks they say to the once again booming tech industry.

In all, California heads the list as the least affordable state. In addition to San Francisco and San Jose, the metro areas of Los Angeles, Santa Ana and San Diego made the list. To look at the other areas that made the list, click here.

Article source: http://blog.sfgate.com/ontheblock/2012/12/07/san-francisco-2nd-san-jose-6th-least-affordable-places-to-buy-in-the-country/

San Francisco Leads Nation in Foreclosure Reduction

Thu, 01 Nov 2012 19:54:14 +0000

Home News San Francisco Leads Nation in Foreclosure Reduction

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By Brandon Cornett | November 1, 2012
© 2012, All rights reserved

Trending: Mortgage Rates are Rising
On August 16, 2012, the average rate for a 30-year fixed mortgage rose to 3.62%. What kind of rate can you get?

Conventional:
FHA:

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Colorful houses in San Francisco. Ian Ransley.

The San Francisco housing market continues to recover, and in more ways than one.

New research shows that foreclosure activity has dropped significantly across the Bay Area. This will support home prices and increase market stability going forward.

The Federal Reserve recently published a positive outlook for the San Francisco metropolitan-area housing market. Among other things, it predicted strong demand for homes into 2013. That’s good news for sellers.

Here’s more good news for homeowners in the area. Foreclosure filings are receding — and fast.

36% Drop in San Francisco Foreclosures

Last week, RealtyTrac released their Metropolitan Foreclosure Market Report for the third quarter of 2012. Among the nation’s largest metro areas, San Francisco experienced the largest reduction in foreclosure activity. Third-quarter foreclosure filings fell 36%, compared to the same time last year.

RealtyTrac’s report included all properties with at least one foreclosure filing, across all three phases of the foreclosure process — defaults, auctions, and bank repossessions. In total, there were 9,798 filings in the San Francisco metro area, during the third quarter of 2012. That marks a 3% reduction from the previous quarter, and a 36% reduction from the same period in 2011.

Typically, a major reduction in foreclosure activity helps to stabilize the market in two ways. First, we have an overall drop in the number of homes for sale. With a consistent level of demand, a drop in supply will put upward pressure on home prices.

Secondly, we have less price erosion resulting from distressed properties. Foreclosure homes are often priced and sold below their market values. So they end up as low-end comps, or comparable sales, putting downward pressure on home prices. Thus, the San Francisco real estate market benefits in two ways from this trend.

On the broader stage, this is just one of several factors boosting Bay Area home prices. The metro-area unemployment rate hit 7.4% in August, down from a recession high of 10.1% in January 2010. Housing inventory has fallen across the board, not just in the foreclosure sector. Meanwhile, demand is growing among investors and ‘regular’ home buyers alike.

Homes are Selling Faster, and for More

According to data provided by ZipRealty, San Francisco’s real estate market is still bustling. Home sales typically drop off in the fall, after the summer buying ‘season.’ But that doesn’t seem to be the case here. In most Bay Area counties, homes sold faster this September compared to last. List prices and sale prices both rose at the same time.

Within San Francisco County, the median number of days on market (DOM) was 40 days in September. That marks an 18% decline from the same time last year. At 12 days, Santa Clara County had the lowest median DOM for the Bay Area (it’s no wonder prices are jumping in places like Saratoga). The median DOM declined in eight of the nine Bay-Area counties over the last year. Only Solano County saw an increase in this metric.

The median listing price rose in eight of nine counties as well, again with exception of Solano County. Median selling prices rose in all nine counties over the last year. This is according to data from ZipRealty, a real estate company headquartered in Emeryville, California.

The latest SP/Case-Shiller Home Price Index was released the day before Halloween. According to that report, home prices rose 5.3% across the San Francisco metro area, from August 2011 to August 2012.

While California seems to be leading the recovery, it’s becoming a national trend. At the monthly level, prices rose in 19 of the 20 major metro areas tracked by Case-Shiller. “The sustained good news in home prices over the past five months makes us optimistic for continued recovery in the housing market,” said David M. Blitzer, chairman of the index committee at SP Dow Jones Indices.

Filed under San Francisco

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Article source: http://www.homebuyinginstitute.com/news/san-francisco-foreclosure-reduction-275/

Natural disasters and real estate

Thu, 01 Nov 2012 01:53:10 +0000

An earthquake that struck China’s Sichuan province in 2008 left nearly 70,000 dead image via Shutterstock.

Editor’s note: Inman News Publisher Brad Inman is in Manhattan, waiting out Hurricane Sandy. He will be filing stories as they relate to real estate over the next couple of days. As a journalist, Inman has covered many of California and Florida’s natural disasters, including the 1989 Loma Prieta earthquake in the San Francsico Bay Area and the 1994 Northridge quake near Los Angeles.

By BRAD INMAN

NEW YORK CITY — The expected storm surge from Hurricane Sandy could result in loss of life and billions in property damages, not to mention delay thousands of mortgage loan approvals and home sales.

With the recent exception of Hurricane Katrina, natural disasters and man-made catastrophes tend to have only limited long-term impacts on housing sales, housing markets, and the real estate industry. Earthquakes that hit California in 1989 and 1994 were also setbacks for housing markets, under different circumstances explored below.

In a report issued Saturday, real estate data aggregator CoreLogic estimated that nearly 284,000 total residential properties valued at almost $88 billion are at risk if Hurricane Sandy hits the East Coast as a Category 1 hurricane.

CoreLogic today released data showing the top 25 zip codes in New York City, Northern New Jersey and Long Island markets. Massapequa, located on the South Shore of Long Island, holds the top spot with more than $4.6 billion in total structure value at risk.

After Hurricane Katrina killed an estimated 1,836 people in the Gulf Coast region, destroying or damaging hundreds of thousands of homes and displacing an estimated 750,000 households, it took years for many housing markets in the region to recover.

A report issued four years after the disaster found that the number of homes sold in the New Orleans metro area fell 23 percent from May 2008 to May 2009, with 686 home sales for the month.

When a massive oil spill sullied Gulf Coast beaches and the fishing industry, a $60 million portion of the $20 billion BP Claims Fund for victims was set aside for real estate professionals.

Real estate licensees who could provide documentation for a loss of income or sales could file claims of up to $12,000 for losses related to commercial transactions, commercial real estate income, commercial commissions, rental income, rental commissions, and claims resulting from property damage or other personal claims.

The effect that natural disasters can have on housing markets are certainly localized, but in those areas, they can have a chilling and immediate influence on home buyer confidence and stall mortgage operations, hurting home sales and having even more dire consequences when combined with other economic factors.

The San Francisco Bay Area housing market came to a grinding halt after the 1989 Loma Prieta Earthquake in the fall of 1989. Mortgage operations came to a standstill as lenders were unable to process loans and fearful buyers pulled out of deals. Mid-term, consumer confidence in California real estate was chilled by the looming long-term effect that the threat of earthquakes would have on California real estate.

However, California’s real estate market particularly Southern California, was harder hit by the cutbacks in defense spending in the early 1990s, as part of the peace dividend, and a Northern California tech slump in the 1980s. Then in 1994, the Northridge Earthquake further wreaked havoc on Southern California real estate and again immobilized home buyers as the threat of natural disasters loomed large.

It was not until the late 1990s that the California housing market began to recover.

A restructuring of the earthquake insurance market followed in the middle 1990s, giving consumers better protection and helping to rebuild confidence of buying a home in California. Plus, state and local building codes were modified to make homes safer, though the jury is still out on what these code adjustments actually achieved.

The New York housing market hardly missed a beat after 9/11 with many buyers taking a stand against the force of terrorism by actually buying more homes beginning in 2002. Again, economic factors probably played an important as the New York City economy and the U.S. economy experience record growth levels.

When disasters are of a large enough scale to affect the economy as a whole, that can send alarmed investors rushing into safe havens like Treasurys and government-backed mortgage bonds that fund must U.S. home loans. Investor demand pushes bond prices up and yields down.

When the extent of the Fukushima nuclear accident looked catastrophic, mortgage rates and Treasury yields plummeted, mortgage broker and syndicated columnist Lou Barnes noted at the time.

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Article source: http://www.inman.com/news/2012/10/29/natural-disasters-and-real-estate