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Bay Area home sales continued to lose steam in January, but the high-end house market regained growth on a year-over-year basis along with an increase in the median price for luxury properties, according to a report by PropertyRadar.

Property sales records, cited by PropertyRadar in its latest report, in the Bay Area show sales of homes valued over $1 million grew by 1.5% compared to last January. Contra Costa, meanwhile, surpassed Silicon Valley, to become the fastest-growing upper-end real estate market in the Bay Area.

Defining  ”Luxury”
The definition of “high-end” or “luxury” home varies from region to region. For the Bay Area, where there is a higher average household income and stronger demand, a $1 million home doesn’t necessarily equal luxury.

More: Click Here For More Coverage of the Bay Area and San Francisco from Mansion Global

San Francisco, San Mateo, and Marin counties all have median home prices exceeding $1 million. Coldwell Banker defines a luxury home in Santa Clara County as one priced at $2 million or above, but that threshold is lowered to over-$1.5 million in the East Bay.

In all, the higher-end real estate market in the Bay Area performed better at the beginning of 2017 compared to other tiers, according to public property records. The only price category that saw an increase in sales was the over- $1 million.

The most expensive Bay Area house sold in January 2017 was in Hillsborough, California. The four bedroom, seven-and-a-half-bath, 5,600-square-feet home  located in San Mateo County and fetched $14 million.

Has Silicon Valley Lost Its Edge?

Sales transaction records in Santa Clara show 62 residential properties priced $2 million and higher were sold last month in the city, a 32% jump from last January, but 20.5% below the prior month, cited Coldwell Banker in its January report.

Santa Clara is home to the beating heart of Silicon Valley and has experienced a fast-growing real estate market after the recession, especially in the top-tier house market. But sales growth in this area has continuously slowed down since the summer of 2015, according to the county property records.
“Silicon Valley is still ahead of the curve,” said Skylar Olsen, senior economist at Zillow. “Santa Clara recovered more quickly from the recession than other counties in this area, which explains its higher median house price and less impressive growth rate.

More: Real Estate Consultants Are Among the Key Experts in New Developments

Data provided by PropertyRadar shows that in 2016, 6,420 homes in Santa Clara sold for more than $1 million, nearly double the 3,413 homes sold in San Mateo County and the 2,939 home sold in San Francisco and nearly triple the number in both Alameda and Contra Costa Counties.

Why the High-end Outperformed The General Market

January home sales across the board fell in all six San Francisco Bay Area counties, ranging from a decline of 6.5% in San Mateo County to a decline of 12.6% in Marin County according to public government records.

“January sales were likely impacted by the jump in mortgage interest rates late last year,” said Madeline Schnapp, the director of economic research for PropertyRadar, a real estate investment service company.  ”Taking a longer-term look, Bay Area sales in 2016 were nearly 10% lower than they were in 2015 while prices rose. That tells us that there is a significant imbalance between supply and pricing.“

On the other hand, both supply and pricing are less a problem for luxury house buyers.

“Buyers in the lower tier market are more constrained,” Ms. Olsen said. “They would hesitate to sell their homes and become buyers in this high-demand market, which causes the further shrinking supply of houses.”

But the high-end market is different. As buyers are less sensitive to the price fluctuations, the supply is also less tight. “The inventory in the top-tier market is increasing, not only the existing houses, but more and more new high-end projects have been developed in this area,” Ms. Olsen added.

“Luxury homes took an average of 54 days to sell during the month, which is a bit longer than a year earlier but still a relatively quick pace for homes in that price range,” Mike James, president of Coldwell Banker, pointed out in its reports on January market.

The fact that many high-end buyers skip mortgages and pay for properties in cash may help, too.

“Even in the most expensive region of California, cash sales continue to be an important component of total sales,” Ms. Schnapp said. “Given the elevated risk in the stock and bond markets and the uncertain trajectory of mortgage interest rates in 2017, parking cash in real estate now remains an attractive alternative to a certain class of investor.”

READ MORE MANSION GLOBAL

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Article source: http://www.mansionglobal.com/articles/56526-bay-area-s-slumped-real-estate-market-didn-t-scare-away-luxury-home-buyers

Bay Area home sales continued to lose steam in January, but the high-end house market regained growth on a year-over-year basis along with an increase in the median price for luxury properties, according to a report by PropertyRadar.

Property sales records, cited by PropertyRadar in its latest report, in the Bay Area show sales of homes valued over $1 million grew by 1.5% compared to last January. Contra Costa, meanwhile, surpassed Silicon Valley, to become the fastest-growing upper-end real estate market in the Bay Area.

Defining  ”Luxury”
The definition of “high-end” or “luxury” home varies from region to region. For the Bay Area, where there is a higher average household income and stronger demand, a $1 million home doesn’t necessarily equal luxury.

More: Click Here For More Coverage of the Bay Area and San Francisco from Mansion Global

San Francisco, San Mateo, and Marin counties all have median home prices exceeding $1 million. Coldwell Banker defines a luxury home in Santa Clara County as one priced at $2 million or above, but that threshold is lowered to over-$1.5 million in the East Bay.

In all, the higher-end real estate market in the Bay Area performed better at the beginning of 2017 compared to other tiers, according to public property records. The only price category that saw an increase in sales was the over- $1 million.

The most expensive Bay Area house sold in January 2017 was in Hillsborough, California. The four bedroom, seven-and-a-half-bath, 5,600-square-feet home  located in San Mateo County and fetched $14 million.

Has Silicon Valley Lost Its Edge?

Sales transaction records in Santa Clara show 62 residential properties priced $2 million and higher were sold last month in the city, a 32% jump from last January, but 20.5% below the prior month, cited Coldwell Banker in its January report.

Santa Clara is home to the beating heart of Silicon Valley and has experienced a fast-growing real estate market after the recession, especially in the top-tier house market. But sales growth in this area has continuously slowed down since the summer of 2015, according to the county property records.
“Silicon Valley is still ahead of the curve,” said Skylar Olsen, senior economist at Zillow. “Santa Clara recovered more quickly from the recession than other counties in this area, which explains its higher median house price and less impressive growth rate.

More: Real Estate Consultants Are Among the Key Experts in New Developments

Data provided by PropertyRadar shows that in 2016, 6,420 homes in Santa Clara sold for more than $1 million, nearly double the 3,413 homes sold in San Mateo County and the 2,939 home sold in San Francisco and nearly triple the number in both Alameda and Contra Costa Counties.

Why the High-end Outperformed The General Market

January home sales across the board fell in all six San Francisco Bay Area counties, ranging from a decline of 6.5% in San Mateo County to a decline of 12.6% in Marin County according to public government records.

“January sales were likely impacted by the jump in mortgage interest rates late last year,” said Madeline Schnapp, the director of economic research for PropertyRadar, a real estate investment service company.  ”Taking a longer-term look, Bay Area sales in 2016 were nearly 10% lower than they were in 2015 while prices rose. That tells us that there is a significant imbalance between supply and pricing.“

On the other hand, both supply and pricing are less a problem for luxury house buyers.

“Buyers in the lower tier market are more constrained,” Ms. Olsen said. “They would hesitate to sell their homes and become buyers in this high-demand market, which causes the further shrinking supply of houses.”

But the high-end market is different. As buyers are less sensitive to the price fluctuations, the supply is also less tight. “The inventory in the top-tier market is increasing, not only the existing houses, but more and more new high-end projects have been developed in this area,” Ms. Olsen added.

“Luxury homes took an average of 54 days to sell during the month, which is a bit longer than a year earlier but still a relatively quick pace for homes in that price range,” Mike James, president of Coldwell Banker, pointed out in its reports on January market.

The fact that many high-end buyers skip mortgages and pay for properties in cash may help, too.

“Even in the most expensive region of California, cash sales continue to be an important component of total sales,” Ms. Schnapp said. “Given the elevated risk in the stock and bond markets and the uncertain trajectory of mortgage interest rates in 2017, parking cash in real estate now remains an attractive alternative to a certain class of investor.”

READ MORE MANSION GLOBAL

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Article source: http://www.mansionglobal.com/articles/56526-bay-area-s-slumped-real-estate-market-didn-t-scare-away-luxury-home-buyers

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Article source: http://blog.sfgate.com/ontheblock/2017/03/09/own-the-penthouse-suite-in-the-tallest-building-on-the-west-coast-just-42m/

The San Francisco Board of Supervisors meets this week to discuss what to do about a January Planning Department study accounting for why so few families with children remain in San Francisco.

Meanwhile, real estate site Zillow and childcare outfit Care.com suggest one sizable motivation: $12,560/year. That’s the difference in cost both sites estimate it takes to raise a family in San Francisco instead of smaller nearby cities.

The dual study takes the average of housing costs, childcare expenses, and property taxes in major cities and compares them to the compiled averages of the relevant suburbs.

Naturally, most urban centers cost more than the suburbs—hence the development of suburbs in the first place. But the trend is not consistent, as Curbed notes:

“In half of the 30 U.S. metros studied, the costs of suburban housing and childcare actually outpaced those of city life, albeit to a milder degree.”

Whereas housing and childcare costs combined will run more than $84,800/year in San Francisco, relocating drives the total down to just over $72,200.

Note that this is an enormous gap. For comparison’s sake, in San Jose the difference is only $1,628. A move to the suburbs in LA means a difference of only $407.

(Oakland data is folded into San Francisco for this study, as part of the larger San Francisco-Oakland-Hayward census area.)

Housing costs came by way of Zillow’s own Cost of Living Report, while Care.com calculated childcare costs based on profiles of companies on its own site. These samples may or may not reflect the data from third parties.

For the purposes of this study, a Zillow spokesperson told Curbed SF that they surveyed residents and asked them to classify which ZIP areas they considered urban and suburban. This was the consensus:

One potentially surprising takeaway is that, even though the price of being a San Francisco family is depressingly high (perhaps accounting for why only 18 percent of SF households have children), we rank only fifth for costs in the study.

In New York City, the difference between the urban and suburban is an unbelievable $71,000/year. Chicago, Dallas, and Washington DC parents have it worse than San Francisco families as well.

And yet, the study says the cost of living here is higher than in most of those cities.

The depressing explanation is simply that nearby Bay Area cities are also pretty expensive compared to suburbs in other parts of the country, so there’s not as much savings to be had with a move.

Ouch.

• Cities v Suburbs [Care]
• Raising a Family In The City [Curbed]
• Family Housing Shortage [Curbed SF]

Article source: http://sf.curbed.com/2017/3/7/14845804/families-cost-san-francisco-suburbs-zillow

The real estate site Property Radar reported on Friday that home sales overall dropped 9.4 percent across the Bay Area in 2016, a decline of 6,466 receipts. In San Francisco alone the decline was 11.2 percent.

Most of the damage was to the affordable category of housing stock: Those priced $500,000 or less.

In 2015, 18,945 such homes sold. In 2016 it was only 14,276—a whopping 24.6 percent decline—just over 62,000 homes sold across the region in total.

By contrast, sales of homes that cost more than a million dollars rose, albeit only by 1.5 percent to 19,277. Numbers for all categories of homes cheaper than seven figures declined year over year.

Casting about for some non-Property Radar figures, California Resource, a title company, recorded 110 home sales in San Francisco in January of 2017.

Of these, only 10 cost half a million dollars or less, with just eight more selling between $500K and $700K.

For January of 2016 the same database records 22 San Francisco homes for $500K or less, with two more inching in above the line at $505K and $502K.

Of course, a big part of the reason fewer cheap homes are selling is that fewer homes are priced comparatively cheaply to begin with.

Property Radar estimates that, even though sales are down and growth is happening only in the highest price bracket, median prices still went up over the year.

The site says that the average price for a single-family home in the region right now is $750,000, up from $730,000 a year ago. In San Francisco it’s $1.17 million, up from $1.15 million this time in 2016.

That’s higher but still largely in line with figures like the $1.15 million that Zillow estimates (up from $1.14 million a year ago) and Trulia’s $1.13 million, up from $1.05 million a year prior.

The most recent report from the Paragon real estate group estimates San Francisco’s median much higher at just over $1.3 million (up from $1.25 in 2016), but is closer to agreement with PR about the rest of the region, estimating a $765,000 median sale price today.

Of course, only magic can predict with complete accuracy whether apparent waning demand over the past 12 months will start to push prices down.

Growth did noticeably slow all last year, even as it stubbornly insisted on rising by inches and degrees.

• Bay Area Sales Fall [Property Radar]
• Home Sales Database [SF Gate]
• SF Home Values [Zillow]
• SF Market Trends [Trulia]
• Bay Area Market, Feb 2017 [Paragon]

Article source: http://sf.curbed.com/2017/3/7/14843964/house-san-francisco-prices-down-affordable