Photo by Justin Sullivan/Getty Images

“We did have a brief window of opportunity—or now it seems brief, it actually lasted quite awhile—during the housing downturn where we had, for the first time in years something approaching reasonable affordability in the Bay Area,” said Carolyn Said, economics and real estate reporter for the San Francisco Chronicle, on KQED Public Radio’s Forum show. “First-time home buyers could find a home in the $300,000 price range. [That home wasn't] necessarily in San Francisco, but in Alameda and Contra Costa counties, and without even going way out to the outer edges of the counties.”

And homes prices in San Francisco dipped as well.

Affordability was “the highest we have seen in 25 years in 2010, early 2011,” said Rick Turley, president of Coldwell Banker for the San Francisco Bay Area.

This Golden Age of Affordability may have come to an end, at least for now. But here’s the good news: If you didn’t buy a home in the past few years, you only sort of missed the boat.

Low Interest Rates

An advantageous part of the affordability equation is still applicable in the form of historically low interest rates, according to Said. “[Rates] are still right around 3.5 percent, which is just amazing when you think of it,” she said.

“That’s a positive for people looking to buy a house. Their buying power is really more because their effective monthly payment is still going to be less, even if they’re paying a little more [for the property].”

In addition to low interest rates, there’s some other good news for would-be home buyers. The Federal Housing Administration still offers loans requiring relatively small down payments.

FHA Loans

“In order to have home ownership, you need to have a down payment, which people starting out in their careers often don’t have,” said Said. She said FHA loan are available with a “3.5 percent down payment if you have decent enough credit, and of course it helps to have a stable income.” A down payment of less than 20 percent requires the purchase of mortgage insurance, but even with that added cost, the low percentage required up front should make the initial plunge more affordable.

Micro-Markets

It’s also important to remember that the Bay Area is a diverse region, and with that diversity comes price range.

“We tend to roll things up as the ‘Bay Area’ in general, but we’re probably 30 micro-markets,” said Turley.

You may have missed your window of opportunity to own a house in San Francisco and Palo Alto proper, but there are still relatively affordable places in the Bay Area.

“More affordable neighborhoods are in Oakland, eastern Contra Costa County, and other parts of the East Bay, as well as in some San Jose neighborhoods,” said Jed Kolko, chief economist for Trulia, an online real estate company.

These places might not have the cachet of the Marina district, but they still offer many of the benefits of living in the Bay Area: good weather,  a decent job market and proximity to outdoor recreation.

And even if you have to pay a bit more to enter the market, chances are you still will get a decent return on your investment.

Still Time to Make a Good Investment

“Historically, since World War II, housing has appreciated … maybe half a percent or a percent ahead of inflation,” said Said. “And that is normal for our country. If you look at [the value of your house] going up 3.5 percent a year over the next 20 years that’s still a substantial appreciation.”

True, that’s not a doubling in value that earlier California generations enjoyed. But Said said that “given what’s been happening in Silicon Valley, with the tremendous demand for housing and the tremendous amount of money that is out there for people working at high-tech companies, the housing in Silicon Valley is not following normal economic paths. It is fueled by all this tech money and from that perspective, it’s perfectly possible that your house will run way up there.”

Finding a Place in the Bay Area Was Never Easy

If you should find yourself put on the spot about why you didn’t jump while prices were lower, you can always blame a lack of credit.

“One of the reasons why people haven’t been able to take advantage of the relatively lower prices and low mortgage rates during the past couple of years is that mortgage credit has been very tight,” said Kolko. “Banks have been reluctant to lend to people who don’t have high credit scores.” The new mortgage rules announced Thursday might encourage banks to be more willing to lend to borrowers who meet income and credit guidelines, he said, so that credit could become easier for some people to obtain.

And remember, San Francisco is a world-class city. Affordability here is a relative term.

“It’s as if God wanted the Bay Area to be expensive,” said Kolko. Not only does the region’s relatively mild weather attract people, but because the region is “hemmed in by the ocean on one side, the bay and the mountains on the other, there’s very little available land to build. The Bay Area’s not like places in Texas or other parts of the South where you can spread out in all directions.”

And there are other limits on building…

“Regulations on building are particularly strict in the Bay Area,” said Kolko. “That makes it even more difficult to build new housing, both in the Bay Area and in much of California, and that adds to the high cost.”

So if you didn’t get around to buying a house when prices were low — take solace in the fact that prices weren’t ever that low.

Article source: http://blogs.kqed.org/newsfix/2013/01/10/if-youre-in-the-market-for-a-home-in-the-bay-area-yes-you-missed-the-boat-sort-of/

Sounding the Waters: Is the Bay Area Prepared for Sea Level Rise?

A new documentary attempts to find the answer

Sea level rise will irrevocably change life near the San Francisco Bay. That’s the premise of RISE: Climate Change and Coastal Communities, a documentary that starts airing this week on KQED Public Radio. Producer Claire Schoen sets the stage on a personal note.

Jan Sturmann

Climate scientists predict that sea level rise and extreme weather will cause flooding of San Francisco’s Financial District by 2050.

By Claire Schoen

“Mom, can you please can it with the climate change lecture  – just for once,” my children complained. At ages 22 and 26, my politically correct, Berkeley-raised kids are well educated in all things scientific and political. But… “Enough already,” they cry.

And I confess that their complaint has some validity: I can bring up the topic of climate change in pretty much any conversation.

But really, what other topic is there?

I do care deeply about war, immigration and famine. But all of these are affected by climate change which is a major cause of increasing drought, which in turn will create more and more wars to be fought over less and less arable land, pushing greater numbers of people to become environmental migrants the world over. This is not science fiction. And it is not the future. It is happening right now and it is being meticulously measured. The scariest part is that scientific estimates and predictions of the rate and intensity of climate change continue to be proven too low. It’s all happening bigger and faster than the models have shown. And it will get worse if we don’t radically slow our greenhouse gas emissions worldwide and figure out how to adapt to the impacts of climate change that are already too late to halt.

This past year has certainly been an eye-opener in the U.S., with a record-breaking number of record-breaking weather events:

• The Mississippi and Missouri Rivers both experienced catastrophic floods this year, affecting cities and towns along both waterways. There were evacuations in Memphis. The Corps of Engineers was forced to breach levees on the Mississippi, intentionally flooding one area in order to save a more populated one.
• Chicago has experienced two intense storms classified as 100-year events – in the last three years.
• 14 states are experiencing one of the worst droughts in U.S. history. The entire state of Texas which is now in its 6th year of exceptional drought, has been designated a natural disaster area.
• Tropical storms in Vermont devastated inland towns.

Since when is Vermont located in the tropics?

While no specific weather event can be attributed to climate change, the pattern of increasingly extreme weather is exactly what climate scientists are predicting.

So what does this mean for those of us living around the lovely San Francisco Bay?

We have relentlessly filled in the edges of the Bay – 40% of it – transforming wetlands into real estate and then covering them with homes, shopping malls and industrial parks. Climate change threatens this land, once considered a 100-year flood plain, with flooding every 10 years, every year, perhaps every high tide, as rising sea levels and extreme rain, wind and waves come together to form a perfect storm – again and again.

Upon embarking on the RISE project, my first act was to print out sections of a map of the Bay coastline, provided on the Pacific Institute website. It identifies those areas that are part of the 100 year flood zone. Pieced together, the map covers an entire wall of my studio. I quickly pinpointed my house. Whew – I’m safe.  But not really, as my bank, airport, highway, sewage system and the houses of many of my friends are situated in the flood zone. Truly we are all in this boat, together.

Will Travis, of the Bay Conservation and Development Commission provocatively suggests that what we need to build today are not houses, but campgrounds. Our stay at the edge of the rising tide is a temporary one. Yet, foolish animals that we are, we make big plans, instead, to develop entire new communities, the Redwood City Saltworks and Treasure Island, both sitting at sea level. Today’s sea level.

So, if not campgrounds, then what? The hard truth is that we don’t know what to do. But it’s time to come together to figure it out. To this end, I’m going to keep talking. Cause kids…it’s all about climate change.

Part 1 of RISE, entitled “Sounding the Waters,” airs on KQED 88.5 FM on Thursday, December 8, at 8 pm. Parts 2 and 3 air January 12 and February 9, respectively.

Article source: http://blogs.kqed.org/climatewatch/2011/12/08/sounding-the-waters-is-the-bay-area-prepared-for-sea-level-rise/