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Local Home Prices among Highest in Bay Area

Sat, 20 Jul 2013 15:27:52 +0000

San Mateo County saw a $135,000 jump in median home price in just one year, according to numbers released Thursday by DataQuick.

Article source: http://southsanfrancisco.patch.com/groups/real-estate/p/local-home-prices-among-highest-in-bay-area

Home builder confidence soars despite rising rates

Wed, 17 Jul 2013 15:20:39 +0000

“Today’s report is particularly encouraging in that it shows improvement in builder confidence across every region as well as solid gains in current sales conditions, traffic of prospective buyers and sales expectations for the next six months,” noted NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “This positive momentum could be disrupted by threats on the policy side, particularly with regard to the mortgage interest deduction and federal support for the housing finance system.”

All three components of the index rose in July. Current sales conditions rose five points to 60—the highest level since early 2006. The component gauging sales expectations in the next six months gained seven points to 67, and the component gauging traffic of prospective buyers rose five points to 45—marking the strongest readings for each since late 2005.

“Builders are seeing more motivated buyers coming through their doors as the inventory of existing homes for sale continues to tighten,” noted NAHB Chief Economist David Crowe. “Meanwhile, as the infrastructure that supplies home building returns, some previously skyrocketing building material costs have begun to soften.”Sales of newly built homes rose just over 2 percent from May to June. Single family housing starts were flat. But permits, considered a more reliable indicator, gained 1.3 percent month-to-month.

Article source: http://www.cnbc.com/id/100889688

Home Sales at Risk Due to Rising Mortgage Rates

Fri, 28 Jun 2013 02:09:15 +0000

Lengthy loan locks could cost buyers thousands of extra dollars, which on the lower end might not be affordable and could scuttle the deal. While some builders can complete a home in 100 days, labor constraints have been slowing construction across the industry.

“A lot of the sub-contractors are seeing an increase in business, yet they’re reluctant to hire staff or have an inability to hire skilled labor, so we’re seeing delays with framers coming onto our properties to frame the houses, we’re seeing challenges with drywall finishers and painters,” says Paul.

Many builders are also seeing supply constraints, as they did not expect to see such a surge in demand. Demand is strong in large part because there is such a small supply of existing homes for sale nationwide, and because banks have been exceedingly slow to work through foreclosures in some states.

(Read More: Home Prices See Record Gain in April)

“About one third of homes sold are completed, down pretty significantly from where we were earlier in the cycle, which was in the 50 to 60 percent range,” notes David Goldberg, an analyst at UBS.

While the major public builders have not voiced concern publicly over risks to their backlogs, the analysts that cover them say if rates continue to rise, they will not be able to ignore it.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick or on Facebook atfacebook.com/DianaOlickCNBC.

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100849156

Top cities to buy bargain fixer-uppers don’t include San Francisco

Mon, 10 Jun 2013 19:09:48 +0000

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San Francisco doesn’t offer the best area for people hoping to buy bargain fixer-upper homes, probably because even fixers sell for a fortune in the Bay Area, and not many properties end up foreclosed or otherwise abandoned to decay much anyway, given the value of property in general. So, even among our few homes for sale needing “TLC,” we don’t find many “bargains.” The properties above show that.

Among the currently MLS listed homes for sale in San Francisco proper, only 16 came up under a parameter search for “fixer-upper,” and zero came up when the term “foreclosure” was also added. RealtyTrac maps SF’s pre-foreclosures (we’ve got 180 shown in purple below), bank owned (we have 185 marked in gold below), and for auction properties (we’ve got 41, marked in red below). This section of the map shows you a portion of the RealtyTrac heat map.

A portion of RealtyTrac’s heat map for distressed property in SF.

Slim pickings, really, in a city with a lot more potential homebuyers than potential homes for sale. The city’s inventory in May was down 24.5% year-over-year.

Best cities for fixer-upper bargains

RealtyTrac, prolific provider of U.S. real estate data with a particular focus on foreclosure-related activity, analyzed national data to find the 15 best markets for buying fixers at discount prices. The figures show the number of foreclosed homes old enough to potentially be candidates for makeovers that are also valued at $100K or less– a sure sign, in more robust markets– of a bargain. Also analyzed here: the average market value of a distressed home as well as the change in the median sales price of such properties in each location year-over-year.

“Low-priced homes are still plentiful in many markets, particularly in the form of foreclosures,” said Daren Blomquist, RealtyTrac vice president. “While these homes may be in need of more work than a typical home and are certainly harder to find now than in previous years, buyers and investors willing to put in a little extra legwork and sweat equity can often find the best deals in their markets on these foreclosure fixer-uppers.”

RealtyTrac analysis found that nationwide , there are more than 51,000 potential foreclosure fixer-uppers: bank-owned homes that were built before 1960 with an estimated market value below $100K.

Meanwhile, back in SF

As usually happens when we compare other parts of the country to San Francisco, our home prices stand out in sharp relief. For less than you’d need for a downpayment on a fixer here, you could buy an entire home outright somewhere else. So if your reason for wanting a fixer-upper is bargain price (though of course, “bargain” is a relative term), you might want to look elsewhere.

Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest, and writes for SFGate and CurbedSF. Follow Anna on Twitter: @AnnaMarieErwert

Article source: http://blog.sfgate.com/ontheblock/2013/06/10/top-cities-to-buy-bargain-fixer-uppers-dont-include-san-francisco/

Housing Investors Cool on Buy-to-Rent Model

Fri, 07 Jun 2013 19:01:59 +0000

Nearly half the investors surveyed said they planned to cut back on purchases of homes in the coming year; in a survey last August, just 30 percent said they planned to cut back. Only 20 percent of investors said they plan to increase purchases, compared with 39 percent who said they would last August.

All this could have a significant impact on the housing recovery.

(Read More: Reverse Mortgages Backfiring on Seniors)

“If the investors gets sidelined—along with first-time buyers who are already sidelined—this housing market falls apart quickly,” says Mark Hanson, a California-based housing and mortgage analyst. Hanson points to still-high levels of negative equity, which has kept many homeowners stuck in place.

Connecticut-based Carrington Mortgage Holdings, a hedge fund that had been buying distressed homes, recently stopped.

“We think the market is a little bit too frothy,” said Carrington’s Rick Sharga in an interview last month. Home prices are now up 12 percent from a year ago nationally, according to CoreLogic, but have risen far more greatly in formerly distressed markets where investors originally focused their purchases.

“The general consensus right now is that the bargains are drying up when it comes to buying foreclosed properties,” adds Sharga.

(Read More: Rising Rates Turn Investors From REITs)

That is largely due to a lack of distressed homes for sale. The number of foreclosure sales in the first quarter of this year fell 22 percent from a year ago, according to RealtyTrac, a real estate website. The number of short sales, when the home is sold for less than the value of the mortgage, also fell, as rising prices provided less incentive for banks to agree to such deals. Some claim banks are actually holding onto repossessed homes, waiting for prices to rise higher.

Investors accounted for 19 percent of home sales in April, according to the National Association of Realtors, down from 24 percent in all of 2012. Investors include individual buyers as well as large hedge funds, but the hedge funds have been getting much of the attention, credited with juicing prices in the hardest hit housing markets like Phoenix and Las Vegas. Their so-called REO-to-Rent strategy (Real Estate Owned-to-Rent) has evolved into a new asset class, with two of the companies that engage in the practice going public this year as real estate investment trusts (REITs).

Article source: http://www.cnbc.com/id/100799067

Bay Area median home price hits $510000

Thu, 16 May 2013 22:08:29 +0000

(05-15) 17:20 PDT San Francisco — Eager Bay Area buyers propelled the region’s median home price above a half-million dollars in April – its highest point in almost five years – reflecting a market continuing to rebound, according to a real estate report released Wednesday.

The $510,000 median for the nine-county Bay Area represents a jump of 30.8 percent from a year ago and a record 17 percent above March’s median price, said DataQuick, a San Diego real estate service that produced the report.

“The Bay Area is getting back to normal fast,” said Andrew LePage, a DataQuick analyst. “We’ve had just the right ingredients for big increases in the median and other price measures. We’ve got drum-tight inventory of homes for sale, an unprecedented level of investors chasing homes, interest rates lower than most of us alive have ever seen, and changes in the types of homes selling and where they’re selling.”

The median represents a midpoint, meaning half of Bay Area homes sold for more than $510,000 and half sold for less. It is influenced both by actual appreciation in home values and by a changing mix of homes sold.

The Bay Area median peaked at $665,000 in summer 2007. During the real estate downturn, bargain-basement foreclosures and short sales helped drag the median down to a low of $375,000 in March 2009. Now, with far fewer distress sales and more high-end homes changing hands, a similar dynamic is buoying it. DataQuick said the median has regained 59 percent of its losses.

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-median-home-price-hits-510-000-4520145.php

Next Boom? ‘Spec’ Homes Are Back

Sat, 27 Apr 2013 05:52:40 +0000

“We’ve seen the listings in the market drop dramatically. It’s been way, way down for months and months and months. The wave of foreclosures hasn’t come to us in a way that impacts the market. Investors are coming in and buying up inventory,” said Paul, who sees these factors as solid arguments for spec building.

(Read More: The Million-Dollar Home Challenge)

Mid-Atlantic, a small Maryland builder with six communities, now has 10 percent of its backlog in spec homes, and they are not alone. The big public builders are heading back to spec as well.

“I think the biggest competitive advantage builders have right now is that they have product, and with existing inventory so low they need to take advantage of the fact that they actually have something to sell,” explained Megan McGrath, a home building analyst at MKM Partners. “When you’re starting to think about the first-time buyer coming back into the market, you may want to increase your spec inventory a little.”

(Read More: Housing “Stuck” Due to Short Supply)

Supplies of homes for sale are down across the nation. Inventory in March fell 17 percent from a year ago, according to the National Association of Realtors. Listings usually rise dramatically in the spring, but they have not kept pace with historical averages.

In its earnings release Monday Meritage Homes CEO Stephen J. Hilton noted, “Housing demand is greater than the supply of homes available for sale in many of the areas where we operate, causing home prices to increase.”

Article source: http://www.cnbc.com/id/100669083

With Home Listings Low, ‘Spec’ Building Is Back

Wed, 24 Apr 2013 23:19:16 +0000

(Read More: The Million-Dollar Home Challenge)

Mid-Atlantic, a small Maryland builder with six communities, now has 10 percent of its backlog in spec homes, and they are not alone. The big public builders are heading back to spec as well.

(Read More: Housing “Stuck” Due to Short Supply)

Article source: http://www.cnbc.com/id/100669083

Finally: Supply of Homes for Sale Begins to Rise

Thu, 21 Mar 2013 23:45:43 +0000

So the increase in supply is welcome news, as the severe lack of homes for sale has been pushing home prices higher far faster than anyone expected. That swift jump in prices, along with low supply, have been hampering sales, which were up just 0.8 percent month-to-month in February, missing analysts’ expectations. Single-family home sales were actually weaker, while condo sales jumped nearly 9 percent from January.

“Rapid price appreciation is not good news for home buyers,” said Lawrence Yun, chief economist for the NAR. “Wages are up just 2-3 percent, while prices are rising 4-5 times that.”

(Read More: Home Resales Hit 3-Year High but Miss Forecasts)

With the increase in supplies came a return of all-cash investors, who had been moving out of the market, causing sales of homes on the low end to plummet. Investors made up 22 percent of home buyers in February, according to the Realtors, up from 19 percent in January. All-cash sales hit 32 percent, up from 28 percent, and distressed home sales also increased to 25 percent of all sales, from 23 percent.

Low inventory has kept first-time home buyers, who largely seek lower-priced homes, out of the market. Newlyweds Brian and Ali Earle have been looking for a home in Northern Virginia for almost a year.

“There’s not a lot out there,” Brian said. “It’s actually amazing. We see houses go under contract in a day or two, and so we really have to be on top of the game and be willing to drop everything and run and go check out a house, or it’ll be gone.”

Article source: http://www.cnbc.com/id/100577800

Pending Home Sales Soar Despite Rough Winter

Thu, 28 Feb 2013 01:11:50 +0000

Banks have been slow to put foreclosed homes up for sale recently, possibly waiting for prices to improve further. While some expected a surge in inventory once home prices began to improve, that so-called “shadow supply,” has yet to emerge. Prices are rising fast, up nearly 7 percent in December from a year ago in the nation’s twenty largest real estate markets, according to the SP/Case Shiller Index. But some would-be sellers may be waiting to see just how high prices move in the coming months, while millions of others are still trapped underwater, owing more on their mortgages than their homes are worth.

Mortgage applications to purchase a home fell 5 percent last week from the previous week and is now at its lowest level since the end of last year, according to a Mortgage Bankers Association weekly survey. Applications historically start to pick up around now, as President’s Day weekend marks the unofficial start of the usually busy spring housing season.

(Read More: Homeowners Rise Above Water on Mortgages)

Regionally, the Realtors’ Pending Home Sales Index in the Northeast rose 8.2 percent in January and is 10.5 percent higher than January 2012. In the Midwest the index increased 4.5 percent and is 17.7 percent above a year ago. Pending home sales in the South rose 5.9 percent and are 11.3 percent higher January 2012. In the West the index edged up 0.1 percent in January but is 1.5 percent below a year ago. Supplies of homes for sale are most limited in the West, where investors have been buying distressed properties in bulk.

(Read More: Jumbo Mortgages Are Back: Should You Be Worried?)

Article source: http://www.cnbc.com/id/100501214