What a difference two months (and 1.11%) makes: Higher rates mean this Brisbane condo would now pencil out to $254 more a month (Kiesha Stephens/Redfin)

Mortgage interest rates are on a tear. Last week they registered their sharpest one-week spike in years, hitting 4.46% for a fixed-rate 30-year home loan, according to Freddie Mac. Less than two months earlier, the rate was 3.35%.

Today’s Chronicle looks at the impact on the housing market; click here for the story.

Is a percentage more really that big a deal? Well, just ask all the folks who refinanced to carve that 1% off their mortgage rate.

Those who have not yet refinanced, perhaps because they were either underwater or close to it (lacking that magic 20% equity) are getting worried they may be out of luck. It’s a balancing act to see what will happen faster: Higher home values to increase their equity or higher mortgage rates that will make a refi less attractive.

Some home buyers, as well as those refinancing, may see the rising rates as motivation to get in the game.

“The rate increase spurred a lot of people to pull the trigger,” said Jay Voorhees, owner/broker of JVM Lending in Walnut Creek. “We’ve had an uptick in volume recently with both purchases and refinances.”

In his blog, mortgage broker Julian Hebron of RPM Mortgage in San Francisco discusses the possibility that rates could hit 5% in the near future.

While many experts say the housing market as a whole is likely to shrug off the higher rates, for some individual buyers, especially those on a shoestring budget, the impact will be stronger.

Consider these two homes now on the market, a condo very close to the Bay Area median, and a more high end home. Assuming a standard 20% down payment, look at what the monthly mortgage payments would be under today’s rate, and what it would have been in early May with the 3.35% rate.

This Brisbane two-bedroom condo “steps from the great outdoors,” (at top) is listed at $499,000. At today’s rate of 4.6%, monthly mortgage payments would be $2,017.  Monthly payments at 3.35% would be $1,763, or $254 less.

This San Jose 5-bedroom with an “inviting floor plan” and “lush backyard” in the Cambrian neighborhood (below)  lists at $889,000. The monthly cost at 4.6%: $3,587.  At 3.35%: 3,135. The difference: $452 a month. (Caveat: In reality this jumbo mortgage might mean a higher rate, but the spread between two months ago and now would be consistent.)

Carolyn Said is a San Francisco Chronicle staff writer. For Bay Area real estate news and insights, follow  her on Twitter: @csaid

This 5-bedroom in San Jose’s Cambrian neighborhood lists for $889,000. (Ashley Rabello/Redfin)

Article source: http://blog.sfgate.com/ontheblock/2013/06/30/mortgage-interest-rates-on-upswing-heres-the-pocketbook-impact/

Mansions that had languished on San Francisco’s Billionaire’s Row were finally snapped up last year. Well-known moguls from tech and finance poured money into real estate. Expansive estates in Silicon Valley drew publicity-shy billionaires who set up shell companies to shroud their identities.

In the nine-county Bay Area, 11,041 properties changed hands in 2012 with sales prices above $1 million, up 29 percent from 2011, according to real estate service DataQuick of San Diego.

Of course, around here, a million dollars doesn’t necessarily buy a mansion. That price tag can easily adorn a two-bedroom condo in San Francisco, a run-down ranch in Palo Alto, or a suburban tract house in Moraga.

“Virtually all home sales in some communities were in the $1 million-plus category,” DataQuick said, listing Ross, Los Altos, Atherton and Hillsborough as Bay Area towns where that was the case. Hillsborough had 422 million-dollar-plus sales in 2012.

Overseas cash

The real action was at the even higher end – 162 Bay Area homes sold for north of $5 million, DataQuick said. California notched an all-time high of 697 homes selling for over $5 million.

“In the prestige market (some sales) may have to do with where to park assets relative to other areas like the stock market and mutual funds,” said DataQuick analyst John Karevoll.

“One clear portion of the market that’s very active is buyers from abroad,” he said. “They’re coming here, they’ve got money and that money is in cash.”

The recovering economy, especially the tech sector, definitely has played a role in the luxury boom.

“The technology industry has done very well recently, which has created a wealthier pool of buyers,” said Jed Kolko, chief economist with real-estate site Trulia.com. “At the same time, with prices rising, there are more million-dollar homes than a year ago simply because of appreciation.”

Inventory of high-end homes is just as tight as at other price points.

Malin Giddings, a Coldwell Banker agent who focuses on luxury real estate, said: “2012 was an incredible year because there was very low inventory and very high demand.”

Just as with the regular market, high-end homes sold for less than their bubble-fueled heights. “For sellers who understand that values have taken a 25 percent hit, those properties are moving,” she said. “We are not back to pre-2008 prices.”

Who’s buying

Another impetus for sellers: A Jan. 1 hike in the capital gains tax.

“In Palo Alto there were quite a few sales of homes over $3 million by people whose cost basis was $50,000 to $200,000, who were motivated to close before the end of the year because of the tax bump,” said Steve Niethammer, a Realtor with Zane MacGregor Co.

Who buys trophy homes?

David Bellings of Coldwell Banker, who specializes in luxury properties, said his current listing for an $18.5 million, seven-bedroom home in Sea Cliff, as well as other high-end homes he sold last year, drew interest from “CEOs from around the world” as well as “celebrity types from L.A. thinking of moving here to escape the crazy paparazzi and to have more of a normal life.”

Several well-known tech moguls went on shopping sprees in San Francisco. Yammer founder David Sacks bought 2845 Broadway for $20 million, a fraction of the $65 million it once commanded. Jack Dorsey of Twitter and Square paid $9.9 million for a two-bedroom in Sea Cliff. Zynga’s Mark Pincus paid $16 million for the Newhall mansion on Pacific Avenue. Apple’s Jonathan Ive, the mastermind behind the design of the iPod and iPhone, paid $17 million for 2808 Broadway.

“Many of those properties had been on the market for over three years, especially on Billionaire’s Row,” said Sally Kuchar, San Francisco editor of the real-estate website Curbed.com. “The influx of tech money has really helped those big estates sell.”

Tech money reportedly fueled the blockbuster sale of a 9-acre hilltop estate in Woodside that sold in November for $117.5 million, setting an all-time U.S. record. Although public records don’t show who ponied up that amount, the Los Angeles Times said the new owner may be Softbank CEO Masayoshi Son, the second-richest man in Japan.

The seller is no secret: It was Tully Friedman, CEO of San Francisco private equity firm Friedman, Fleischer and Lowe.

Record-setting sums

“That sale just blows my mind,” Niethammer said. “It looks like (the buyer) overpaid by $100 million. Property in Woodside generally goes for about a million bucks an acre; with the house, it should have been about a $20 million deal.”

The previous record-setting sale quickly ended up losing half its value, at least for tax purposes. Russian billionaire Yuri Milner, an early Facebook investor, paid $100 million in 2011 for a Los Altos Hills mansion, but a year later got the county to chop its assessed value to $50 million.

Niethammer is listing a 150-acre former llama ranch estate for $15.5 million in Bonny Doon, overlooking the Pacific Ocean. “I told the seller, ‘You might want to add $100 million to it so it will sell,’ ” he joked.

The historic Flood estate in Woodside, 92 oak-studded acres listed for $85 million in September, has drawn a lot of interest, said Mary Gullixson of Alain Pinel Realtors.

Showing just how coveted open space is, she’s listing a 3-acre parcel – no house – in the Menlo Circus Club area of Atherton for $19.8 million. “It’s a diamond in the rough,” she said.

Another mega-estate in Silicon Valley just hit the market for a cool $100 million with an unusual caveat – the buyer must agree to let the current owner live out his days there.

Located in Hillsborough, the 47.4-acre estate features hiking trails, streams, wildlife and gardens designed by Thomas Church. It comes with a 16,000-square-foot Mediterranean-style home designed by the same firm that designed the St. Francis Hotel. The house has a ballroom, pavilion, library and swimming pool, according to court records of the owner’s divorce.

Lifetime resident

The house’s inhabitant – Christian de Guigne IV, 75, the current owner – plans to remain in residence there for the rest of his life.

Isn’t that a rare request? “It’s as unusual as the size of the land that’s available in such an exclusive area,” said listing agent Gregg Lynn of Sotheby’s International Realty.

The de Guigne family – the patriarch emigrated from France and co-founded Stauffer Chemical Co. in Gold Rush-era San Francisco – has owned the land for 150 years. The house construction started in 1914 and was delayed when Christian de Guigne II went off to serve in World War I, Lynn said.

Million-dollar-plus home sales surge

The number of homes selling for more than $1 million was up 29 percent in the Bay Area in 2012.

Source: DataQuick

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

Article source: http://www.sfgate.com/realestate/article/Bay-Area-luxury-home-sales-boom-in-2012-4244363.php

San Francisco

20 Beideman St.

Beds: 2 Baths: 1.5 Square footage: 1,000 Price: $3,400/month

This furnished two-bedroom condo is a top-floor unit with a townhouse-style floor plan. It has high ceilings, large windows and skylights. The office includes a pull-out sofa. Other features include a gas fireplace, window seat, front porch and radiant heat. The property also includes a deck off the kitchen and a private one-car garage. The building is within walking distance to shops, restaurants and nightlife in Fillmore, Japantown and NoPa.

Leasing agent: Jeanne Zimmerman, McGuire Real Estate, (415) 901-2779,

Article source: http://www.sfgate.com/realestate/article/What-you-can-rent-in-San-Francisco-for-3-400-3832286.php