The Bay Area has more homes for sale, spelling relief for buyers

In another sign that the Bay Area housing market is cooling, the number of homes for sale here has spiked  — signaling more options for buyers, and potentially lower prices.

There were 43 percent more homes on the market last month in the San Jose metro area, which includes Santa Clara and San Benito counties, than there were in January 2018, according to a Zillow study released Thursday. Inventory increased by 25 percent in the San Francisco metro area, which includes San Francisco, San Mateo, Alameda, Contra Costa and Marin counties.

“There’s no doubt that the winds have shifted very rapidly in the Bay Area housing market,” said Zillow senior economist Aaron Terrazas.

Those spikes in inventory are good news for buyers  who have been struggling to get offers accepted in a hyper-competitive, exorbitantly expensive market.And they mean sellers may need to reign in their expectations slightly when it comes time to set a price tag. But experts say the Bay Area real estate market still has a lot of cooling off to do before it could be considered affordable for a first-time home buyer, or before a home purchased years ago will cease to be a good investment.

Prices are still rising in the Bay Area, but more slowly. While median home values in the San Jose area shot up 25 percent year over year last spring, in January they inched up just 7 percent year over year, reaching $1.2 million. The median value for a San Francisco-area home was $957,400 in January — up from $910,500 a year ago.

There were 7,792 homes on the market in the San Francisco metro area last month, up from 6,233 the year before, according to Zillow. In the San Jose area, there were 3,011 homes for sale, up from 2,102 the year before. Both metro areas saw more homes for sale last month than they have at any other point since 2016. Inventory has been increasing for several months, and nearly doubled in October in the San Jose area.

“It’s easy to get a high percentage rise when you have a low number to start with,” said San Jose-based real estate agent Mike Gaines. “Our inventory still is terribly low.”

The San Jose area saw the largest percentage increase among the major metropolitan areas Zillow studied. Seattle was second, with a 37 percent increase. But while the jump was most pronounced in the country’s priciest markets, it’s a nation-wide trend.

Across the U.S. last month, the number of homes for sale increased 1 percent from the year before.

In San Jose, buyers are getting better deals than they were a year ago, Gaines said. Some homes are receiving offers for less than their asking prices. And sellers are being forced to think more carefully about a realistic price before they list their home.

Part of the reason more homes have come on the market recently is that home owners increasingly are being tempted to sell, Gaines said. As their neighbors’ homes sell for hefty sums, they don’t want to miss their opportunity to cash out.

“We’ve got a lot of folks who want to get out of here,” he said. “They feel this year will be the best opportunity to get their home on the market, get it sold and move somewhere.”


Article source: https://www.mercurynews.com/2019/02/14/the-bay-area-has-more-homes-for-sale-spelling-relief-for-buyers/

Posted in SF Bay Area News | Tagged | Leave a comment

Compass buys Alain Pinel to create Bay Area real estate behemoth

The Bay Area’s rapidly consolidating real estate industry got even more concentrated Monday as Compass, a venture-funded brokerage firm in New York, said it had purchased Alain Pinel Realtors, a big player on the Peninsula and Silicon Valley.

This is Compass’ third major acquisition of a Bay Area competitor in eight months.

In July, it bought Paragon Real Estate Group to form San Francisco’s largest residential brokerage firm.

In August, Compass bought San Francisco’s Pacific Union International to create the nation’s third-largest residential retail brokerage. Before that deal, Pacific Union, Compass and Alain Pinel were the nation’s fifth, sixth and seventh largest residential real estate firms, respectively, based on their dollar value of transactions in 2017, according to Real Trends,

In September, Alain Pinel, based in Saratoga, acquired Hill Co., a boutique brokerage with three offices and 81 agents in San Francisco.

While Alain Pinel ranked seventh in sales volume in 2017, it was only 73rd in terms of transactions, according to Real Trends, a real estate data and consulting firm. That’s because it caters to high-end buyers and sellers in an expensive market, with an average sales price of $1.6 million. At that time, Alain Pinel had almost 1,300 agents in 30 offices.

The firm was founded in 1990. CEO Mike Hulme was not available for comment, nor was Compass CEO Robert Reffkin.

“Compass did not really have traction in the South Bay. This gives them traction in the South Bay and the Peninsula,” said Randall Kostick, CEO of Zephyr Real Estate, one of the two large remaining independent brokerage firms in San Francisco. The other is Vanguard Properties.

However, he said, Compass’ previous acquisitions have left it with “tons of employees, staff and offices all over San Francisco. Our two biggest costs are salaries and facilities.” He predicted that Compass will have to cut those costs.

Compass, founded in 2012, now serves more than 10,000 agents in 248 offices across the country, the company said in a news release. It has raised $1.2 billion from investors including Softbank. A $400 million financing round in September reportedly valued it at $4.4 billion.

Last week, Compass, which bills itself as a technology firm, bought Contactually, which offers an online customer-relationship management system used by some of the nation’s largest real estate firms, including many Compass competitors. Contactually, based in Washington, powers Compass’ customer-relationship management system.

Zephyr’s Kostick said Contactually’s customer-relationship system is one of several his firm offers its agents, who are independent contractors.

“We were the first company in the Bay Area to work with Contactually as a CRM software. We are very uneasy about the fact that we have agents that have data in a software system for all of their clients that is now owned by Compass. We have expressed that to the CEO of Contactually. He assured us that data is safe,” Kostick said.

Kostick said he also has an issue “with giving money to our staunch competitor” now that Contactually is owned by Compass.

Kostick said Contactually offered to let Zephyr out of its contract and that “we are likely to be transitioning to another provider for an alternative service.”

Zephyr has a lawsuit pending against Compass. Last year, Compass expressed an interest in buying Zephyr. Before the two firms entered talks, Compass signed an agreement that certain Compass personnel wouldn’t recruit Zephyr agents. Zephyr alleged that Compass violated the agreement. A jury trial is scheduled for August, Kostick said.

Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender

Article source: https://www.sfchronicle.com/business/networth/article/Compass-buys-Alain-Pinel-to-create-Bay-Area-real-13662639.php

Posted in SF Bay Area News | Tagged | Leave a comment

Yet another reason why San Francisco Bay Area house prices may rise in 2019

Messaging platform Slack Technologies has kicked off what many believe will be a major year for initial public offerings in the technology sector. Experts say that could have major implications for home buyers and owners in the San Francisco Bay Area.

For residents of the San Francisco Bay Area and its surrounding communities, these IPOs could make it more difficult to find a home at an affordable price.

Slack confirmed Monday that it had filed IPO paperwork confidentially with the Securities and Exchange Commission, after having garnered a $7.1 billion private-market valuation back in August. Slack is just the first of many San Francisco-based tech companies expected to go public this year — others include Uber, Lyft,Airbnb and Pinterest.

For residents of the San Francisco Bay Area and its surrounding communities already swimming in money from Silicon Valley millionaires, these IPOs could make it even more difficult to find a home at an affordable price, especially if these companies’ employees are among their neighbors, according to a report released Tuesday by real-estate website Zillow

ZG, -1.30%

Also see: Uber’s chaos is a great argument for going public quickly

Every 10 Facebook employees living in a given U.S. Census tract at the time of the IPO were associated with an extra 1.6-percentage-point rise in home values.

Facebook Chief Executive Mark Zuckerberg, and other companies and philanthropists in the Bay Area said last month that they plan to raise $500 million for affordable housing, The Wall Street Journal reported. This announcement came just weeks after California Gov. Gavin Newsom asked the private sector to do more to address the home shortage.

Zillow examined the link between Facebook’s IPO

FB, +3.14%

 in 2012 and rising home prices across the Bay Area and found that home values rose more quickly in neighborhoods with higher concentrations of Facebook employees after the social network became a publicly-traded company.

Specifically, every 10 Facebook employees living in a given U.S. Census tract at the time of the IPO were associated with an extra 1.6-percentage-points increase in home values over the following year, the report said.

In dollar figures, the median value home in a neighborhood with a high concentration of Facebook workers rose by an extra $20,800 between May 2012 and May 2013. Zillow cautioned that it couldn’t determine whether Facebook’s IPO alone caused that increase, as other factors likely drove home prices higher in those areas.

Nevertheless, homeowners who live in areas with a higher concentration of workers from companies planning IPOs should expect to see those corporate actions affect their home values, said Zillow director of economic research and outreach Skylar Olsen.

And that could provide a boost to the region’s housing market, which has cooled in recent months after years of skyrocketing prices, fueled by high demand. “These housing markets are slowing down,” Olsen said. “Something that may break that fall is the influx of money coming from these tech IPOs.”

In particular, employees of companies that go public may receive bigger paychecks following an IPO, or shares of the company they already owned could grow in value.

Homeowners who live in areas with a higher concentration of workers from companies planning IPOs may an increase in their home values.

Those extra funds could then make it easier for these workers to come off the sidelines and become first-time home buyers. In turn, that will create more competition for homes, particularly in neighborhoods near the company’s headquarters, which could then price other consumers out of the market, Olsen said.

The lessons learned from Facebook’s IPO don’t just apply in the San Francisco area. Olsen said consumers can expect to see a similar outcome near the headquarters of any company that has a notable IPO. However, many of the employees who work for major tech firms are younger and, therefore, more likely to be a first-time home buyer.

IPOs also aren’t the only corporate action that can have an effect on home prices. Zillow previously found that Apple’s

AAPL, +0.50%

 release of the first iPhone in 2007 was associated with higher home value appreciation in neighborhoods near the company’s headquarters in the following year than in the communities surrounding other major tech companies that didn’t release a major new gadget.

1318b MW FJ174 jpassy NS 20170328170204 Yet another reason why San Francisco Bay Area house prices may rise in 2019

Jacob Passy is a personal-finance reporter for MarketWatch and is based in New York.

We Want to
Hear from You

Join the conversation

Article source: https://www.marketwatch.com/story/will-a-blockbuster-year-for-tech-ipos-lead-to-even-higher-home-prices-for-san-francisco-2019-02-05

Posted in SF Bay Area News | Tagged | Leave a comment

46% of SF Bay Area residents say they want to leave, blame housing

Despite the Bay Area’s natural beauty and booming job market, nearly half of its residents now want to get out, citing a creeping disillusionment with the high cost of housing.

Forty-six percent of Bay Area residents surveyed said they are likely to move out of the region in the next few years — up from 40 percent last year and 34 percent in 2016, according to a poll released Sunday by business-backed public policy advocacy group the Bay Area Council.

The numbers show a disturbing trend in one of the nation’s most expensive housing markets: Workers desperate for a better quality of life and without housing options will go elsewhere, potentially plunging the region into a financial downturn.

“They couldn’t be more clear what the big problems are — and it is exclusively about the cost of housing,” said John Grubb, chief operating officer for the Bay Area Council. “They don’t see…enough action coming, and so they’re looking at taking matters into their own hands. And unfortunately, what they’re going to take into their hands is the steering wheel of a U-Haul to go somewhere else where there’s a better combination of salary and lower housing costs.”

Bay Area home prices have been climbing for six years, setting another record in April, when the median sale price hit $850,000 — up 13 percent from a year ago, according to real estate data firm CoreLogic. Rents are soaring too, and workers are forced to move farther away to find affordable housing and commute on already crowded Bay Area roads and freeways to get to their jobs.

Meanwhile, recent efforts by policy makers, affordable housing organizations, developers and others apparently have yet to make a dent in residents’ concerns.

The Bay Area Council has thrown its support behind several housing-focused bills that it says will help, including SB 831, which eliminates some fees for building in-law units; SB 1227, intended to increase the supply of affordable student housing; and SB 828, which would force cities to rezone land to allow more homes to be built.

Researchers have been worrying about the Bay Area exodus for some time. A recent report from Joint Venture Silicon Valley found more people left Silicon Valley in both 2016 and 2017 than in any year since 2006. Still, Silicon Valley is gaining more residents than it’s losing — the region welcomed 44,732 newcomers between July 2015 and July 2017, and lost 44,102. But the ominous new data from the Bay Area Council suggests that could change quickly, as the out-migration shows no sign of slowing down.

When asked to pinpoint the most important problem facing the Bay Area, 42 percent of those surveyed said housing — a dramatic jump from 28 percent last year. Meanwhile, 18 percent said traffic and congestion, 14 percent cited poverty and homelessness, and 12 percent said the cost of living.

Those problems spell serious disillusionment for Bay Area residents. Fifty-five percent of residents polled said they feel the Bay Area has “gotten pretty seriously off on the wrong track,” compared to 42 percent last year.

“It’s so expensive,” said 38-year-old software engineer Travis Dobbs, who moved his family from Berkeley to Portland last year. “My wife and I both make good money, relatively speaking, and we can’t afford a house there.”

Of those who are likely to move out in the near future, 24 percent of the 1,000 registered voters surveyed in the nine-county Bay Area said they plan to stay in California, including 5 percent who said they would head to Sacramento. Texas, Oregon and Nevada were the most popular out-of-state destinations, capturing 10 percent, 9 percent and 8 percent of potential movers, respectively.

Article source: http://www.northbaybusinessjournal.com/industrynews/realestate/8401240-181/sf-bay-area-residents-want-leave

Posted in SF Bay Area News | Tagged | Leave a comment

Oakland teachers, school district still deeply divided over salaries

Oakland teachers say they are not paid enough. Their bosses and their students want them to get a raise. Education researchers agree.

But the specifics of teachers’ demand — a 12 percent raise over three years, and its distance from what the school district says it can feasibly give — has led to a weeklong strike in the famously activist city that has halted normal school operations, caused thousands of educators to go without pay and become the latest data point in a series of attention-grabbing teacher strikes across the country.

Bargaining teams met again Thursday, and teachers were joined on the picket lines by educators from other districts in the Bay Area.

It’s now the longest stretch that Oakland teachers have protested outside the classroom since the five-week strike of 1996, and the second major labor action by educators in California this year after a six-day strike in Los Angeles.

Here are answers to key questions arising from the strike.

How realistic are the teachers’ demands? Union leaders and district officials fundamentally disagree over how much leeway the school district’s $580 million budget has for raises, which would probably be given to employees in other represented labor groups as well — such as custodians and food service workers. For that reason, each 1 percent raise will cost $3.5 million, according to the district, which is battling a structural deficit and plans to make $22 million in cuts in the coming days.

The Oakland Education Association is asking for more nurses and counselors, reduced classes and guarantees that non-charter public schools will remain open. Oakland educators say their wage demands would be just enough to keep up with the rising cost of living in the East Bay and that raises could be funded by redirecting money from consultants and contractors, for which the district allocated $67 million last year.

Administrators say the district is recovering from years of financial mismanagement while facing declining student enrollment — and thus state dollars — with the rise of charter schools, and obligations such as pensions and a $100 million emergency loan from the state made in 2003.

The district’s latest offer, presented Monday, would give teachers an 8 percent raise over three years and a one-time 2 percent bonus.

 Oakland teachers, school district still deeply divided over salaries

Even if both sides were to agree to the 12 percent raise, Christopher Learned, a state-appointed official overseeing the school district’s finances, said he would reject it, because the amount would “put the district in financial distress.”

State Superintendent of Public Instruction Tony Thurmond mediated Oakland negotiations this week. He has a history of strong support from teachers unions, but that doesn’t mean he can pull money out of a hat.

“The state cannot make these strikes go away,” Thurmond said in an interview with The Chronicle. “Ultimately, they have to be resolved by local parties coming to an agreement.”

Gov. Gavin Newsom’s budget proposal, which includes $576 million for special education and $3 billion in one-time funds to reduce pension costs at K-12 schools and community colleges, could help relieve some financial pressure on school districts, Thurmond said.

Living off an Oakland teacher’s salary: On wages alone, Oakland teachers are among the lowest paid in Alameda County, with starting salaries at $46,570, the highest at $83,724 and an average salary of $63,149, according to the California Department of Education.

But when factoring in $13,000 per-teacher health benefits that some school districts do not have, they are on par with their East Bay peers — a fact that district leaders are quick to point out.

Of the 13 largest school districts in California, Oakland teachers have the lowest base salaries, when adjusted for cost of living, according to the National Council on Teacher Quality. The Washington think tank found that Oakland teachers need to work for 20 years to save for a 20 percent down payment on a house. For San Francisco teachers, it takes 30 years.

“You compare Oakland to other districts nationally, and they’re somewhere in the middle in terms of salary ranges, but once you control for cost of living, all of a sudden those salaries, which looked competitive, are in the basement,” said Kate Walsh, president of the National Council on Teacher Quality. “If they did get the 12 percent raise, salaries would absolutely be competitive.”

 Oakland teachers, school district still deeply divided over salaries

To afford the median mortgage in Alameda County, the average Oakland teacher would have to put two-thirds of the gross salary toward payments, according to research by Zillow, the real estate database company. The average Oakland teacher needs to spend 60 percent of the salary to afford the median apartment rent in the county.

It’s even starker across the bay. The average San Francisco teacher would have to put 90 percent of the gross salary toward median mortgage payments in the city, according to Zillow. For San Jose teachers trying to live in Santa Clara County, it’s 81 percent.

 Oakland teachers, school district still deeply divided over salaries

The lowest-paid teachers in San Francisco would need to spend 142 percent of pretax salary to afford a mortgage, or 110 percent to rent an apartment in the city.

Across public schools, the “teacher pay penalty” — the percent by which educators are paid less than comparable workers — hit a new high in 2017, hurting retention in the profession, according to a study from UC Berkeley’s Institute for Research on Labor and Employment.

Finding the money: Marguerite Roza, director of Georgetown University’s Edunomics Lab, a research center on education finance and policy, said that if Oakland district leaders were “radically transparent” about funding and spending, down to the school level, then principals and teachers could better understand trade-offs that should be made.

For instance, staffing levels and wages typically have an inverse relationship amid contract bargaining — to get more of one, concessions must be made on the other. The union demanding both is challenging, Roza said.

Yet the teacher strikes in Oakland and elsewhere do not seem to be focused on moving around limited resources within districts’ budgets, she said.

“We’re not really having an honest discussion over what’s the best way to spend money, but a statement of frustration, then districts feeling like there’s nothing they can do about it, and then for some, like Los Angeles, going further into the hole,” Roza said.

“Right now, there’s really a lack of trust between the two sides. There’s a sense of, ‘Don’t you think there’s money somewhere, and don’t I deserve a raise?” she said. “It used to be that strikes were about how to divvy up the district’s dollars. Now it’s, ‘We want the money, and we don’t care if the district has it.’”

Lessons from Los Angeles: In the case of Los Angeles, a strike won teachers a 3 percent retroactive raise for 2017-18 and another 3 percent for 2018-19, along with reduced classes, more librarians, counselors and nurses, and a resolution calling for a moratorium on charter schools in the district.

L.A. district leaders also agreed to spread out the impact of unearned wages from strike days. Instead of not being paid for their absence, an equal deduction in pay will be taken out of the next six months of checks.

The L.A. County Office of Education, alarmed by the raises, said the deal could lead to the school district falling below its required reserves in three years. County overseers asked the district for a revised budget plan.

Oakland and Los Angeles teachers put forth similar demands for similar situations. Both wanted more nurses and counselors to be hired, fewer charter schools and smaller classes.

Their prestrike wages weren’t far apart, either. In the 2017-18 school year, L.A. teachers had a starting salary of $43,913, the highest at $87,085 and an average salary of $74,789. The average per-teacher benefits are $14,500, according to the district.

But Oakland teachers face different challenges, too: a steeper cost of living, an attrition rate more than three times that of Los Angeles educators, and a history of insolvency and state receivership in the district.

The Oakland district has an 18.5 percent attrition rate compared with the national rate of 10 percent overall and 15 percent for urban schools.

In a survey last year, 2 out of 3 Oakland teachers said their salary made them want to leave or strongly want to leave the district.

Turnover rates are 70 percent higher for teachers in schools that have the highest concentrations of students of color, and teachers of color have a turnover rate of 19 percent compared with 15 percent for their white colleagues, according to district data.

District leaders say the poor retention has cost millions in training, hiring and professional development.

Both sides agree that wage increases will help keep teachers from leaving Oakland.

Kimberly Veklerov is a San Francisco Chronicle staff writer. Email: kveklerov@sfchronicle.com Twitter: @kveklerov

Article source: https://www.sfchronicle.com/bayarea/article/Oakland-teachers-school-district-deeply-divided-13654007.php

Posted in SF Bay Area News | Tagged | Leave a comment