The median paid last month was $421,000, up 1 percent from
June and 13 percent from a year earlier, the San Diego-based
data firm said today in a statement. It was the highest for the
nine-county region since $447,000 in August 2008. Sales rose on
a year-over-year basis for the 13th straight month.

Across California, housing has been buoyed by consumer
sentiment and low mortgage rates, with coastal areas like San
Francisco and West Los Angeles showing the biggest price
advances, Stuart Gabriel, director of the Ziman Center for Real
Estate at the University of California, Los Angeles, said in a
telephone interview. Inland cities still have widespread
negative equity, with many homes valued at less than their
mortgage balances, he said.

The median price statewide rose almost 12 percent from a
year earlier to $281,000, the highest since September 2008,
DataQuick said today in a separate report. Foreclosure deals
made up 22 percent of transactions, the smallest share since
November 2007, the company said.

“Housing has bottomed and, in fact, has turned,” Gabriel
said. “The coasts are among the hottest markets in the country.
Underwater homes are a limiting factor, but as prices rise they
will naturally bring forward new inventory and a willingness by
owners to market properties.”

‘Big Challenges’

Buyers in “mid- and move-up markets” fueled the price
gain in the Bay Area, with properties offered at $500,000 or
more accounting for 42 percent of total sales, up from 36
percent a year earlier, DataQuick President John Walsh said.
Mortgage availability “remains one of the big challenges in the
Bay Area,” he said in the statement.

Distressed deals in the Bay Area including foreclosures and
short sales, where the purchase price is lower than the loan
balance, made up almost 35 percent of transactions, down from 37
percent in June and 45 percent a year earlier, according to the
company.

Purchases financed by adjustable-rate mortgages were used
in 13 percent of Bay Area deals in July, down from 14 percent
both in June and a year earlier. Since 2000, those loans have
been used in almost half of all home purchases in the region,
DataQuick said.

Sales totaled 8,461, up 23 percent from July 2011.

San Francisco tops a list of U.S. metropolitan areas with
improved residential markets, based on price gains, inventories
and foreclosures, according to data compiled by Bloomberg.

To contact the reporter on this story:
Dan Levy in San Francisco at
dlevy13@bloomberg.net

To contact the editor responsible for this story:
Kara Wetzel at
kwetzel@bloomberg.net

Article source: http://www.businessweek.com/news/2012-08-15/san-francisco-area-home-prices-jump-to-a-four-year-high

Paul Habibi is a lecturer at UCLA’s Ziman Center For Real Estate as well as principal and co-founder of Habibi Properties LLC, one of the largest private apartment owners in the Los Angeles area. We asked him to share his insights about what’s happening with the commercial real estate loan crisis …

Us: What’s the status of the commercial mortgage crisis? Are things getting better?

Paul: There are roughly $1.4 trillion of loans coming due by 2014, nearly half of which are currently under water. I’d estimate that when all the dust settles, $100-$150 billion will go back to lenders or get sold at a loss. I’m certainly on the bullish side, but the reality is that low interest rates and improving fundamentals have averted the commercial real estate crisis that many thought was imminent.

Us: Will lenders be nicer to commercial borrowers than to homeowners in working out loan modifications, extensions, etc?

Paul: Thus far, the success rate for workouts in the commercial sector far exceeds that of the residential sector. However, there isn’t nearly as much political pressure to help out commercial borrowers. As much as it is criticized as a non-strategy, extend and pretend worked. It bought borrowers time for the market to correct and for banks to avoid the costs and ripple effect of massive defaults.

Us: Are we past the peak? How much longer until the commercial real estate market is back on its feet?

Paul: With fundamentals on the upswing, we are well past the peak of distress. While the popular rhetoric will have you believe the recovery is sluggish, economic output today is ahead of pre-recession levels and corporate profits are very healthy. As it pertains to real estate, just the realm of real estate, concerns about the unemployment rate are overblown – it’s absolute job growth (size of the pie) that fills buildings and increases rents.

Us: How do commercial defaults in Orange County compare to the national market?

Paul: In Orange County, there is currently $2.3 billion of distressed across 142 properties, and nationally there is $170 billion across 12,243 properties.

While Orange Country commercial real estate experienced a tough time in the aftermath of the housing bubble, it is also healing fast. In the past year, looking at changes in commercial occupancy across the top 20 national markets, Orange County placed second only behind the San Francisco Bay Area.

Us: What’s the approximate value of commercial real estate defaults since the market crash in 2008?

Paul: Since 2008, we have seen over $340 billion worth of distress hit the market. Most of these loans are in various stages of default, but the resolution of each specific situation is what matters most.

To date over $40 billion has been taken back by lenders and classified as REO. Approximately $130 billion remains troubled and outstanding, and the balance of $170 billion has either been restructured or resolved.

Us: How much have lenders lost in the commercial real estate market collapse?

Paul: My estimates are somewhere between $70-80 billion. This number would be significantly higher in absence of the various cushions provided by quantitative easing, loan extensions and changes in mark-to-market accounting standards.

Article source: http://www.ocregister.com/articles/big-339920-ucla-buildings.html