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Median Bay Area Home Prices Jump At Record Rates As Inventory Remains Tight

Fri, 19 Jul 2013 21:27:42 +0000

SAN FRANCISCO (CBS/AP) – The real estate tracking firm DataQuick said Thursday that the median price for homes in the nine-county San Francisco Bay area reached $555,000 in June, an increase of 6.9 percent over the previous month.

The real estate data firm is reporting the median year-over-year price paid for a Bay Area home rose at its fastest pace on record in June.

DataQuick said Thursday that the rise was the result of disappearing distress sales, an improving economy and mortgage rates remaining low.

However, the number of homes sold dropped 7.5 percent to 7,897 in June. DataQuick attributes the decrease to the number of homes for sale falling short of demand and an easing of purchases by cash and investor buyers.

The real estate information service says last month’s sales were 20.9 percent below the June average of 9,993 sales.

See the full DataQuick report and County-by-County sales breakdown

Home prices in the Bay Area are through the roof according to a new study by Data Quick.

Back in 2009, during the depths of the recession, the median price of a home was $290,000. Now that figure is $555,000; six percent higher than last month and 33 percent higher than one year ago.

Data Quick Analyst Andrew LePage said it’s a matter of supply and demand. We’ve seen sales fall on a year-over-year basis for the last five months in a row.

Richard Green with the Lusk Center for Real Estate at the University of Southern California said much of it is the shortage of homes for sale.

“Inventories are very small,” he said adding that there are many more all cash transactions than ever, which drives up the market for higher-end homes and drives up sale prices.

Speculators have said that things could ease with fewer homes underwater, prompting sales and increasing supply. In addition, developers are also starting to build new homes again.

Article source: http://sanfrancisco.cbslocal.com/2013/07/18/median-bay-area-home-price-jumps-again-as-inventory-remains-tight/

San Francisco Median Home Price Tops $1 Million

Fri, 31 May 2013 05:23:27 +0000

Earlier this month, San Francisco reached a potentially dubious milestone–the median price of a home in the city topped $1 million.

To give a sense of just how quickly this has happened, its important to note that the current median price is a 32 percent jump from where its sat last year.

The phenomenon isn’t solely confined to San Francisco proper. Other Bay Area cities are experiencing similar surges in housing prices, leading the whole region to see a 22 percent increase in prices over the past twelve months.

This is great news for current homeowners thinking about cashing out and moving to the Bahamas. But for everyone else it raises two questions: 1. Where can I get one of those internet millionaire jobs I keep hearing so much about, and 2. Are we in the midst of the housing bubble?

According to a recent study by real estate brokerage house Redfin, San Francisco is one of the cities in the United States most likely to be experiencing a real estate bubble based on a host of factors ranging from the ratio of home prices to median household income, the speed at which prices are growing and the speed at which houses are sold after being listed on the market.

“The normal laws of economics don’t apply to the Bay Area,” Redfin CEO Glenn Kelman told HuffPost in April. “You could have huge unemployment numbers here and home prices would still go up because [the supply is so constrained and] there are enough people with limitless amounts of money who want to live there.”

Unlike the real estate bubble that triggered the Great Recession, the Bay Area’s newfound growth in home prices isn’t fueled by sketchy financing (“Do you have a heartbeat and signature? Here are the keys to this 12 bedroom estate!”). Instead, what’s going on is directly tied to the strength of the Bay Area’s largely tech-fueled job market, which is drawing an influx of wealthy people into areas where there isn’t enough supply to go around.

The reason for the Bay Area’s lack of supply is largely due to the aftershocks of the last bubble, which devastated the construction industry and led to far fewer houses being built to accommodate the region’s swelling population.

Some of that is starting to change–especially in San Francisco, where a construction boom is simultaneously creating new housing units after years of virtually nothing coming onto the market–but the new construction isn’t happening fast enough to stabilize demand.

While the Fed is helping to keep interest rates low, which makes buying a house considerably cheaper, the money coming into some pockets of the Bay Area is so great that it’s common for properties to stay on the market for less than a week and the majority of buyers are paying entirely with cash.

However, it’s not only internet millionaires acquiring scores of Bay Area real estate with mountains of cold, hard cash. The practice of house flipping–where an investor buys a property (often with cash), fixes it up and then sells it almost immediately to make a profit both on the renovation and the rising tide of the housing market–is back with a vengeance.

A recent analysis by RealtyTrac found the average gross profit for flipping a house in San Francisco last year was 23 percent over the original purchase price, making it one of the best markets in the country for flipping.

In February, 28 percent of all the homes sold in Santa Clara, San Mateo, Alameda and Contra Costa counties went to absentee buyers not intending on actually living on the property and nearly one third sold for cash.

“In terms of the added frustration to Mr. and Mrs. Typical Homebuyer, the investor coming in with cash is going to trump,” Coldwell Banker’s Rick Turley told the San Jose Mercury News. “Even at the next price tier, you’ve got these young wealthy millionaires buying their first home at $1.5 million, and they’re paying cash. That’s edging out the move-up buyer.”

Even so, there are many housing experts who believe what’s happening is healthy growth that’s sustainable over the long term.

“This is not a bubble,” economist Diane Swonk told ABC News. “We are regaining lost ground which is a game-changer for most households since their home is what they rely on for wealth.”

Also on HuffPost:

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Sacramento, Calif.

Year Over Year Increase: 42.57 percent

Median Home Listing Price: $285,000

Total # Of Listings: 2,962
Santa Barbara/Santa Maria/Lompoc, Calif.

Year Over Year Increase: 35.72 percent

Median Home Listing Price: $699,000

Total # Of Listings: 1,195
San Francisco, Calif.

Year Over Year Increase: 25.04 percent

Median Home Listing Price: $749,000

Total # Of Listings: 2,292
San Jose, Calif.

Year Over Year Increase: 23.53 percent

Median Home Listing Price: $562,000

Total # Of Listings: 2,035
Phoenix, Ariz.

Year Over Year Increase: 21.21 percent

Median Home Listing Price: $200,000

Total # Of Listings: 15,114
Atlanta, Ga.

Year Over Year Increase: 19.93 percent

Median Home Listing Price: $179,000

Total # Of Listings: 32,530
Oakland, Calif.

Year Over Year Increase: 17.22 percent

Median Home Listing Price: $375,000

Total # Of Listings: 1,911
Seattle/Bellevue/Everett, Wash.

Year Over Year Increase: 16.66 percent

Median Home Listing Price: $349,950

Total # Of Listings: 4,381
Fresno, Calif.

Year Over Year Increase: 16.28 percent

Median Home Listing Price: $184,900

Total # Of Listings: 1,949
Riverside, Calif.

Year Over Year Increase: 15.65 percent

Median Home Listing Price: $229,000

Total # Of Listings: 14,909

Article source: http://www.huffingtonpost.com/2013/05/29/san-francisco-median-home-price_n_3356238.html?ir=San+Francisco

Vacation Home Sales Sizzle, Rentals Booking Fast

Tue, 21 May 2013 10:33:30 +0000

“We’re getting the calls again from people looking to really buy, buy into the market and start renting again,” said Lipscomb.

The impact of Super Storm Sandy is less apparent further south on Hilton Head Island in South Carolina.

“It’s a great time to buy, it’s a bad time to sell is what I tell people,” said James Wedgeworth, who has been selling real estate on the island for over a decade. “There is a light at the end of the tunnel.”The rental market on Hilton Head, which largely caters to the golfing set, has remained strong throughout the recession, likely because so few people wanted to buy. Confidence is slowly returning here, but prices are not.

“It hasn’t really started going up, but at least it’s not going down. We had seven straight years of prices going down. That’s no fun,” added Wedgeworth.

(Read More: Financing a Vacation Home)

Vacation home sales rose 10 percent nationally in 2012, according to the National Association of Realtors, but as with all things real estate, location is key. Prices are just stabilizing in South Carolina, but in the tiny towns of eastern Long Island, New York, better known as the Hamptons, home prices are roaring back and rentals are fully booked for the season.

“We’ve seen bidding wars in the four to five million dollar range as well as in the overall market,” said Laura Nigro, a real estate broker in Bridgehampton. “It’s so much better than when the 2008, 2009 economy shrank and people were very much afraid to invest in anything.

Article source: http://www.cnbc.com/id/100751056

Why Chinese money is flooding Bay Area real estate

Thu, 11 Apr 2013 09:12:07 +0000

Blanca Torres
Reporter- San Francisco Business Times

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Chinese money has flooded the Bay Area real estate market — and you can expect more, way more.

Investors in Asia have plenty of reasons to put their capital in the United States and with our economy still recovering from the 2008 recession, domestic capital for projects is still relatively hard to come by.

On Wednesday, developers of Oak to Ninth in Oakland’s Brooklyn Basin announced a $1.5 billion commitment from a Chinese investor making it the second, large-scale, master planned development project to secure funding from the far east after developers for Treasure Island announced a similar agreement late last year.

Tishman Speyer also brought in significant Chinese bucks into two condo towers of 42 and 37 stories at 201 Folsom St. in San Francisco.

Other examples include a Chinese biotech firm buying the former Berlix factory in Richmond and the San Francisco Regional Center funneling Asian money into Oakland deals to buy office and industrial buildings.

Those deals are just a sampling, or a harbinger of what’s to come.

In the case of Oak to Ninth, the investor, Zarsion Holding Co. is an expansive owner developer and owner of real estate in China and the Oakland investment is their first in the United States.

Anton Qiu, a veteran broker with TRI Commercial, told me that this kind of deal is appealing to more Chinese companies and investors for a variety of reasons.

At the macro level, China holds more than $1 trillion of U.S. debt, but the dollar has been weak since the recession, so investing in assets is much more attractive. In the last few years, the Chinese government has made it easier for investors to borrow money from the government to invest in foreign countries. In the U.S., the motivation is clear — the better our economy, the more the dollar and thus, the value of China’s holdings go up.

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

Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/04/why-chinese-money-is-flooding-bay-area.html

Calif. governor looks to China for investments

Sat, 06 Apr 2013 20:29:01 +0000

Click photo to enlargeSACRAMENTO, Calif.—California Gov. Jerry Brown has designs on building some of the most expensive public works projects in the nation and wants to keep the state moving forward in its slow recovery from the recession.

Where better to go searching for the money to further those interests than the world’s second largest economy and a country that has piles of cash to invest around the globe?

The governor of the most populous U.S. state heads to China next week to begin a weeklong trade mission that he hopes will produce investments on both sides of the Pacific. Brown will lead a delegation of business leaders in search of what he calls “plenty of billions.”

“They’ve got $400 billion or $500 billion they’re going to invest abroad, so California’s got to get a piece of that,” Brown said in an interview last week ahead of his seven-day trip to China.

The governor and business leaders accompanying him are trying to rebuild the state’s official relationship with China after the state closed its two trade offices and others around the world a decade ago in a cost-cutting move. California finds itself playing catch-up to other states that have had a vigorous presence in China for years.

California, which would be the world’s ninth largest economy if it were a separate country, will open a trade office in Shanghai during Brown’s visit. The Bay Area Council, a coalition of business interests from the San Francisco Bay Area and Silicon Valley, is

raising about $1 million a year in private money to operate it.

“California shouldn’t be the only state in the union not to have a presence with key foreign trading partners like China,” said Jim Wunderman, president of the group.

The council opened its own office in Shanghai in 2010 to fill the void after the closure of the trade offices. Bruce Pickering, executive director of the Northern California office of the Asia Society, called the 2003 decision “penny wise but pound foolish.”

“We’ve basically said, ‘We’re California, show up and stand in line with everybody else,’” Pickering said. “You have to do a little more than just say you’re welcoming a business. … You have to really send a message that you are ready for it.”

Asia Society, a nonpartisan, nonprofit organization that promotes collaboration between the U.S. and Asia, reported in 2011 that businesses from China have established operations and created jobs in at least 35 of the 50 U.S. states, including California.

Pickering said California is behind other states in recruiting Chinese investment, while states as varied as Pennsylvania, Missouri, Florida and Arkansas have had an official presence there. The Republican governors of Iowa, Virginia, Wisconsin and Guam also are visiting China this month and meeting with provincial leaders to discuss trade and the environment.

“I would think it would be very difficult to try to attract investment without having someone on the ground there on your behalf,” said Joe Holmes, a spokesman for the Arkansas Economic Development Agency.

Arkansas Gov. Mike Beebe led a mission to China last year, and a number of deals are being discussed as a result, Holmes said.

Asia Society reported this year that China’s direct foreign investment is poised to skyrocket to between $1 trillion and $2 trillion by 2020. California is ideally situated to capture some of that money if it goes after it: China already is California’s third-largest export partner after Mexico and Canada.

And Brown already has a relationship with President Xi Jinping. The two met to discuss trade issues last year when the then-vice president visited California.

Technology, life sciences, real estate, banking, health care and agriculture are among the industries state business leaders and officials hope to target. The concentration of skilled technical engineers and the clean-energy sector in the Silicon Valley also are a draw for emerging companies, along with Chinese tourism to California.

State and local tourism officials are among those joining Brown on the trip, along with winemakers, cheese proprietors and almond growers. In all, about 75 business and policy leaders from a cross-section of California industries are joining the mission, which will include stops in the capital city, Beijing, as well as Shanghai and Guangzhou.

Those cities are among the most developed and important in China. Shanghai, a port city, is an important center of industry and finance, while Guangzhou is in the heartland of the Pearl River Delta region, which is home to the myriad processing and assembling factories that have made China the world’s factory floor.

The nearly $4 billion a year in computer and electronic products California sends to China account for the state’s largest export, followed by waste and scrap, non-electrical machinery and transportation equipment. The agriculture products such as strawberries, almonds and lettuce are fifth.

According to the governor’s office, the vast majority of Chinese exports headed to the United States go through California ports.

The trip also signals a pivot for Brown as he seeks to rebuild California’s nearly $2 trillion economy after the state’s tumultuous ride during the Great Recession. It was the epicenter of the housing crisis and weathered double-digit unemployment for nearly four years.

Brown said the state budget has stabilized, in large part because of voter-approved tax increases, and that he is now moving on to broader policy issues.

“California is a place where it’s a cauldron of creative activity, and I see that China has some of that, maybe a lot of that,” Brown said in the interview. “You have always got to find a way to renew things, and that’s what I see as my job here.”

The governor’s boldest and most expensive projects are a $68 billion high-speed rail system that is expected to start construction this summer and a $24 billion project to build massive water-delivery tunnels and restore parts of the Sacramento-San Joaquin River Delta, the largest estuary on the West Coast.

Brown is especially interested in studying China’s extensive high-speed rail system and use it as a way to promote his own plan, which has come under intense criticism and has been losing public support as its projected cost has soared. The governor is scheduled to ride part of China’s rail system from Beijing to Shanghai, accompanied by the chairman of California’s high-speed rail board, Dan Richard.

China has the world’s longest high-speed rail system, covering 5,800 miles, and has tried to turn it into a showcase. But the system also has faced problems: Part of a line collapsed in central China after heavy rains and a crash in 2011 killed 40 people. The former railway minister, who spearheaded the bullet train’s construction, and the ministry’s chief engineer, were detained in a corruption investigation.

Brown said he likes “the exuberance” with which Chinese officials approached building high-speed rail and would welcome investment in the California system or any other infrastructure projects in the state.

Despite the governor’s enthusiasm, it’s not clear how applicable the Chinese system is to a major infrastructure project in the U.S. The Chinese high-speed rail network benefits from heavy government financing and faces few of the environmental and legal hurdles in California. The land needed to build the Chinese system is often forcibly procured at below market prices.

———

Associated Press writer Charles Hutzler in Beijing contributed to this report.

Article source: http://www.insidebayarea.com/news/ci_22970064/calif-governor-looks-china-investments

They Bailed on Their Homes—Now They Want Back In

Tue, 26 Feb 2013 13:01:33 +0000

While home ownership has fallen dramatically since the recent housing boom, from a high of 69.2 percent in 2004 to 65.4 percent at the end of 2012, according to the U.S. Census, the desire to own a home is still strong. 70 percent of Americans surveyed by online real estate website Trulia.com said homeownership was still a part of the “American Dream.” 65 percent of those surveyed by Fannie Mae in January of 2013 said that if they had to move, they would buy a home, rather than rent.

Coming back to home ownership may not be as difficult as some think. Consumers who only defaulted on their mortgage during the recent recession were far better risks than those who went delinquent on multiple credit accounts, like credit cards and auto loans, according to a 2011 study by TransUnion.

“There appears to be a pocket of opportunity among mortgage-only defaulters that is not the result of excess liquidity, but rather the unique circumstances of the recent recession,” said Steve Chaouki, group vice president in TransUnion’s financial services business unit in the study release. “This new market segment that the recession created is an important one for lenders to understand. They have the potential, today, to be stronger and more reliable customers.”

Not surprisingly, given this potential, YouWalkAway.com is launching the “AfterForeclosure.com Pass/Fail App,” which claims to tell potential borrowers in just one minute, “if they have a shot at home ownership.”

“We want people to know that it’s possible and, in a lot of cases, it’s advantageous,” says Jon Maddux, former CEO and co-founder of YouWalkAway.com.

(Read More: US Homeowners RiseAbove Water on Mortgages)

It is possible, but mortgage underwriting is far more strict today than during the housing boom, and there are varying waiting periods before former homeowners who went through foreclosure can qualify for a new loan. The Federal Housing Administration, the government insurer of home loans which now backs just over 20 percent of new loan originations, requires a three-year wait. Fannie Mae and Freddie Mac, which own or guarantee the bulk of the remaining new loan originations, require up to seven years for a strategic defaulter to qualify again for a mortgage.

d More: Americans Are Using Their Houses as ATMs Again)

Article source: http://www.cnbc.com/id/100485159

They Bailed On Their Homes

Fri, 22 Feb 2013 18:37:14 +0000

A new survey of past clients by YouWalkAway.com, a website that assists borrowers in the legal pitfalls of strategic default, found that nearly 80 percent expressed a desire to buy a home again within the next twelve months. It also cites data by Moody’s analytics, showing that the number of eligible home buyers who have had a previous foreclosure will be 1.5 million by the first quarter of 2014.

Crashing home prices and sketchy mortgage products caused millions of Americans to default on their loans and eventually lose their homes. For some, it was a tragic fight to the end to keep their single largest investment; for others it was a conscious decision to walk away from their mortgage commitments, given the real fact that they would likely not see home equity again for many years to come.

Some saw this as morally reprehensible, others as a sensible business decision.

(Read More: Fewer Borrowers Are Behind on Mortgages, but for How Long?)

“We want people to know that it’s possible and, in a lot of cases, it’s advantageous,” says Jon Maddux, former CEO and co-founder of YouWalkAway.com.

(Read More: US Homeowners RiseAbove Water on Mortgages)

(Read More: Americans Are Using Their Houses as ATMs Again)

Article source: http://www.cnbc.com/id/100485159

Manhattan Property Sales Spike on Fears of Tax Hikes

Fri, 04 Jan 2013 01:07:52 +0000

The price gains, however, were largely on the luxury end. In looking at the median prices, where half sell for higher and half sell for lower, prices for co-ops were up just 2.1 percent in the fourth quarter. Condominium prices actually fell just under one percent. (Read More: Extravagant Home Features of the One Percent.)

The median price in the luxury market, however, was $4,440,150, up 7 percent from a year ago, according to Douglas Elliman. The luxury market represents the upper 10 percent of all co-op and condo sales.

“The year-end jump in sales was a function of proactive tax management by property owners. Although it wasn’t clear what form the tax hikes related to housing would take, it was assumed that 2013 would be higher than 2012,” noted Jonathan Miller, CEO of Miller Samuel, which provides the Elliman report data. (Read More: Million Dollar Winter Wonderland Homes.)

Prices in Manhattan are still about 6 to 7 percent off their pre-recession highs, but low supply will likely narrow that gap in 2013. Strong demand from foreign, all-cash buyers is also boosting prices, especially in the condo market. Gains, however, may slip in the current quarter, as so much demand was pulled forward.

Article source: http://www.cnbc.com/id/100351956

More good housing market news: Bay Area’s August home sales strongest in six …

Sun, 16 Sep 2012 05:08:26 +0000

SAN JOSE — The Bay Area real estate market’s resurgence continued in August, as the region posted its most home sales for the month in six years, DataQuick reported Friday.

A total of 8,579 homes sold in the nine-county Bay Area in August, the real estate information service reported, an increase of 14.2 percent. While the median price dipped slightly from July — from $421,000 to $410,000 — it increased 10.8 percent year-over-year; sales typically increase and median price typically decreases from July to August, DataQuick reported.

Bay Area home sales have increased year-over-year every month since July 2011, as the region’s housing market recovers from the subprime mortgage crisis that sent the economy into the Great Recession and crated home sales and prices.

August was the fifth consecutive month that the median price increased from the same month the previous year, as higher-priced homes have begun selling at a faster clip while fewer foreclosures are purchased. Foreclosures accounted for 14.9 percent of resales in August, the lowest percentage since December 2007, while 40.2 percent of homes sold went for more than $500,000.

While the market has definitely boomeranged during the past year, it is not completely healthy because of a tight credit market that can keep prospective homeowners for obtaining a mortgage loan, DataQuick president John Walsh said Friday.

“Most economists agree that the housing market is off

bottom. But there’s a big gap between the market being ‘off bottom’ and being normal, which it’s not. The single biggest bottleneck is still the dysfunctional mortgage lending market. It’ll be interesting to see how yesterday’s announcement that the Fed is going to buy mortgage-backed securities plays out,” Walsh said in Friday’s news release.

Sales and prices increased in all nine counties in August, with the largest leaps in home sales showing up in the North Bay, where Napa County had a 32.2 percent year-over-year increase and Marin had a 29.2 percent jump. San Francisco County sales increased 29.1 percent from August 2011.

The largest median price increase occurred in Contra Costa County, with a 15.2 percent bump from $260,500 to $300,000. The sales bump in Contra Costa was the lowest in the Bay Area, however, as 4.6 percent more homes sold than in August 2011.

Alameda County home sales increased 22 percent year-over-year, while the median price rose 8.9 percent to $380,000. Santa Clara County’s median price jumped higher than $500,000, at $542,750, thanks to a 10.3 percent increase; home sales increased in the South Bay county by 9.3 percent.

San Mateo County’s growth was tame compared with its neighbors, with the Peninsula gaining 5.6 percent in sales and 3.9 percent in median price, at $592,500.

DataQuick is a San Diego-based real estate information service. Due to late data availability, the company estimated August sales in Alameda, San Francisco and San Mateo counties.

Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.

Article source: http://www.mercurynews.com/business/ci_21544164/more-good-housing-market-news-bay-areas-august

As Housing Recovers, Will Apartment Boom End?

Tue, 28 Aug 2012 08:49:55 +0000

The latest reports on new and existing home sales seem to indicate that the housing market is beginning to find its footing again. While most believe the recovery will be slow, U-shaped, and bumpy, the free fall appears to be over for both sales and prices.

This is not to say that factors like rising mortgage interest rates and economic instability overseas couldn’t set the recovery back a bit, but, again the general consensus is that the worst is arguably over. (Read More: New Home Sales Rose 3.6% in July, but Prices Fell.)

If that is in fact the case, then we have to ask what effect that recovery will have on the recently booming apartment sector, which benefited from the housing crash.

Rents are sky high in most of the largest U.S. markets, and vacancies are down and still falling. Multifamily housing starts were up 30 percent in July from a year ago, according to the U.S. Commerce Department, and multifamily permits were up over 47 percent.

Supply increases are a potential risk to the multifamily sector, and high prices have caused investors to sour on the sector of late. But some say multifamily isn’t exactly heading into the woods. The fundamentals are still strong. (Read More: A Tale of Two Housing Markets: Single and Multi Family.)

“Realistically trees don’t grow to the sky,” said David Toti, a multifamily analyst at Cantor Fitzgerald. “The apartments have had spectacular growth since the depths of the recession, and at a certain point that growth has to moderate. You can only raise rents so much before you force people out.”

Toti noted that multi-family REITs are still doing better than other sectors, despite the fact that dedicated investors have started to rotate out to suburban office and select areas of retail and self-storage. Toti also believes that an improving single family housing market can co-exist for a while with a strong apartment market, and others agree.

“Modestly favorable home-buying indicators are not coming at the expense of apartment rent trends,” wrote Sam Chandan of Chandan Economics. “Multifamily fundamentals continue to improve in advance of pending inventory additions from the construction pipeline.”

The fact is that despite a recovery in single family housing, we are not going to see a housing boom any time soon, and you can thank the still tight credit market for that. (Read More: US Home Builders Begin to See Credit Thaw.)

There has also been a fundamental, cultural shift toward apartment living over the past decade that will drive ever more apartment demand.

While single family homes account for 80 percent of total residential building stock, according to the U.S. Census, that number may be shrinking.

Single-family homes have grown in number and size over the past 60 years, according to a new report from Pike Research (part of Navigant Energy Practice), “but by 2021 the total area of single-family homes in the United states will have shrunk by nearly 4 billion square feet, contracting at a negative compound annual growth rate of 0.2 percent.”

“For the first time since World War II, the United States is experiencing increased levels of urbanization,” said Pike senior research analyst Eric Bloom. “As more people move into cities, they tend to occupy apartments, condominiums, and other attached multi-unit housing types. By 2021, over one-fourth of the residential stock of the United States will be in multi-unit residential buildings.”

Apartment rents, while still rising, are beginning to level off, as the so-called “affordability inversion” comes into play; that means that should home prices continue to fall in most markets, renting becomes far more expensive than owning. (Read More: Is the Apartment Rental Market Overheating?)

In major metropolitan areas, however, high prices are still supported by high demand, and that is why many of the major multifamily REITs like AvalonBay
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] are becoming increasingly urban, building towers downtown and selling older, more suburban portfolio assets.

“Apartments and single family housing can live happily ever after for a little while,” said Toti, who noted that the physical American house is shrinking due to environmental concerns, material costs and a general desire by recession-wary home buyers to carry less debt.

—By CNBC’s Diana Olick

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48802819?__source=RSS*blog*&par=RSS

homesmillbrae.com » Recession

Median Bay Area Home Prices Jump At Record Rates As Inventory Remains Tight

San Francisco Median Home Price Tops $1 Million

Sacramento, Calif.

Santa Barbara/Santa Maria/Lompoc, Calif.

San Francisco, Calif.

San Jose, Calif.

Phoenix, Ariz.

Atlanta, Ga.

Oakland, Calif.

Seattle/Bellevue/Everett, Wash.

Fresno, Calif.

Riverside, Calif.