homesmillbrae.com » Regional Economy

Bay Area home prices, sales climb in July

Tue, 20 Aug 2013 11:38:23 +0000

With more Bay Area residents choosing to sell their homes, real estate sales in July hit their highest monthly volume in almost seven years, while the median price continued its surge, according to a real estate report released Thursday.

A total of 9,339 new and resale houses and condos changed hands in the nine-county Bay Area in July – up 13.3 percent from July 2012, said DataQuick, a San Diego real estate research firm. The median paid was $562,000, a 33.5 percent increase from the same time last year.

Pent-up buyer demand, an improving regional economy and low interest rates have propelled home prices upward for many months. But a dearth of homes for sale meant the number being sold fell on a year-over-year basis every month since January. That trajectory reversed course in July.

“It was a really strong month,” said Andrew LePage, a DataQuick analyst.

Rising inventory shows the real estate market regaining equilibrium.

“Sellers want to jump on the train by putting their properties on the market, which levels supply and demand,” said Tanja Beck, an agent with Zephyr Real Estate in San Francisco.

Fewer bids

More inventory, as well as rising interest rates, should soon rein in the sharp price increases. Although bidding wars still occur, many agents say multiple offers now are measured in smaller numbers – perhaps three bids instead of a dozen.

While San Francisco is the nation’s most competitive market, with 80.5 percent of successful home buyers facing other bids, multiple offers in the city dropped nearly 10 percent from June to July, according to a report from real estate firm Redfin.

Nationwide, fewer bidding wars “points toward the strong sellers’ market beginning to shift toward more balance, giving frustrated home buyers a bit of relief,” Redfin said.

Distress sales are down sharply, another sign of a return to normal. Foreclosure resales were under 5 percent of the total – their lowest level since August 2007, before the credit crunch hit. In February 2009, foreclosure resales were 52 percent of the market, DataQuick said. Their historic monthly average in the Bay Area is about 10 percent of sales.

Short sales – properties sold for less than is owed on the mortgage – were 10 percent of July resales, down from 23.7 percent a year earlier.

Fewer distress sales also mean that people who sell their homes are likely to turn around and buy another property, creating a positive upward spiral.

“There was a time when more than half the sales were the lender pocketing money (in a foreclosure resale) so they just ended there,” LePage said. “Now a greater and greater percentage are traditional sellers, who will move up and buy from someone who themselves will move up.”

Upward mobility

Jessica and Josh Rowe exemplify that move-up buyer. The couple, along with their toddler and two French bulldogs, wants to move from San Francisco to the South Bay to live closer to their jobs. They listed their condo in Haight-Ashbury, a three-bedroom remodeled Victorian, at $949,000. It’s likely to go for well above asking price.

“To go from being sellers to being buyers, your confidence gets crazy-hacked,” said Jessica Rowe. “As a seller, you’re on top of the world, you make all this money – but as a buyer you can’t afford to get (something comparable) to what you just sold.”

The Haight condo itself illustrates the market turnaround. When the Rowes bought it three years ago – near the market’s bottom – the previous owners were on the brink of foreclosure. After unsuccessfully listing it at $799,000 for a month, they slashed the price to $755,000, which is what the Rowes paid.

The Bay Area’s median price is now 15.5 percent off the $665,000 peak it reached in summer 2007, LePage said. During the downturn, its nadir was $290,000 in March 2009.

The median represents the middle value of homes sold, meaning half sold for more and half for less. DataQuick said about three-quarters of the median’s increase stems from rising home values, the remainder from a shift in market mix.

More high-end homes and fewer inexpensive ones sold in July. Just over half (51 percent) of sales had mortgages above the old jumbo limit of $417,000, compared with 38.6 percent a year earlier and the low point of 17.1 percent in January 2009.

Federal Housing Administration loans, mostly used by first-time buyers, were 10.6 percent of purchase mortgages in July, down from 16 percent a year earlier. First-time home buyers consistently report getting squeezed out by investors and others paying all cash.

All-cash sales continued to be a strong force, accounting for 24 percent of July purchases, DataQuick said. In February, they peaked at 32.3 percent of sales.

Absentee buyers, who are mainly investors, snapped up 20.9 percent of Bay Area homes in July. Their market share also peaked in February, at 28.7 percent.

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

Article source: http://www.sfgate.com/business/article/Bay-Area-home-prices-sales-climb-in-July-4736589.php

Mercury News interview: Transwestern managing director Edward Del Beccaro

Wed, 28 Nov 2012 03:42:29 +0000

Click photo to enlarge

Commercial real estate goes hand in hand with the local economy. If more jobs are being created, companies need more office space. If job shrink, then office vacancies increase.

Edward Del Beccaro, managing director of the East Bay office of commercial real estate firm Transwestern, has 34 years of experience in the commercial real estate industry. Before joining Transwestern, he headed up the local offices of commercial realty brokerages Colliers International and Grubb Ellis.

He recently was interviewed about the commercial real estate market and the regional economy. His comments have been edited for length and clarity.

Q: What is your assessment of the Bay Area economy?

A: The Bay Area is one of the healthiest metro areas for job creation in the entire United States. It is because of the intellectual capital in the South Bay and San Francisco, and the manufacturing and transportation capabilities in the East Bay. That’s been the division of labor here for a long time.

Q: What about the East Bay? How do you see that economy?

A: The East Bay is characterized by anemic growth, but growth nonetheless. The Port of Oakland and the refineries will help the East Bay economy grow, even if it is very slow growth. The East Bay will have anemic growth, but most of the country is going to be jealous of that growth.

Q: The South Bay has enjoyed strong leasing activity from Google (GOOG), Apple (AAPL), and other major tech companies. Do you think that office leasing boom is going to continue?

A: I think it will hold steady despite all the bad crosswinds.

Q: What are some of those crosswinds?

A: My daughter is deployed on a Navy ship in the Persian Gulf right now. If there is an Iranian or Middle East oil event, that will be an issue. That will flatten growth.

Q: What about the East Bay commercial real estate market? What is happening there?

A: Our current trend of slow growth and slow leasing continues. Look at the job creation vehicles and the absorption. They are more dynamic in the South Bay than the East Bay.

Q What trends do you see for the retail market in the East Bay?

A In eastern Contra Costa County, there are rising vacancies for big-box retail. Developers overproduced retail in East County. It’s because of the foreclosures that there was less demand for retail than anticipated.

Q: What about the new Paragon Outlets in Livermore? Why are those doing so well?

A: That part of the East Bay was underserved. You have the BART station in the area and connections to the Central Valley, and the Paragon outlets are near two major freeways, 580 and 680, that intersect in the area. And they are building new houses in Livermore and Dublin. Forget about the foreclosures, the prices are high enough that they are building. The Tri-Valley is strong because that is a commuting suburb to Silicon Valley.

Q: How is retail doing in the South Bay?

A: South Bay retail is strong. Retail reflects the dynamics of strong engines for growth. Cars, merchandise, restaurants are all doing well. Same thing in San Francisco. Same thing in Walnut Creek and Emeryville and the Tri-Valley. Those are all good retail markets.

Q: What is your assessment of the downtown Oakland office and retail markets?

A: Oakland is a tale of several cities. Uptown is healthy and getting healthier. Jack London Square is getting better. Broadway addresses tend to be tougher for getting tenants in there. You never know when you’re going to be shut down because of an Occupy protest march.

Q: Overall, will Oakland see improvement?

A: Oakland, because of its central location and transportation access, has a lot of potential.

Q: Long term, do you see that Silicon Valley is going to continue on its growth pace for the commercial property market?

A: Bottom line is that Silicon Valley continues its present leasing and absorption activity and levels. And that will benefit the entire Bay Area.

Contact George Avalos at 925-977-8477. Follow him at Twitter.com/george_avalos.

Edward Del Beccaro

Age: 58
Birthplace: Covington, Ky.
Company: Transwestern
Position: Managing director
Residence: Danville

Five Things about Edward Del Beccaro

As past president of the Walnut Creek Library Foundation, he has raised several million dollars to build a new library.
He has a personal library in Danville with 4,000 books.
He is a volunteer for arts organizations.
His daughter is a petty officer in the U.S. Navy and that has caused him to be more involved in veterans organizations.
He is an “amateur urbanologist.” He loves to know how cities are born, how they evolve and how they decay.

Article source: http://www.contracostatimes.com/business/ci_22044873/chat-transwesterns-edward-del-beccaro