$1 million for that?? You don’t get much house in the Bay Area for $1 million, says Trulia

Courtesy of SiliconBeat.com, 4/3/2014

The tech boom has pumped up Bay Area real estate prices so much that $1 million will get you a fixer-upper — if you can find one.

OK, that may be an exaggeration, but not by much. In Palo Alto, $1 million gets you a nice condo. Over-asking price bids on homes priced at more than $1 million are common in other hot spots like Cupertino, Sunnyvale, Mountain View and Menlo Park.

The online real estate site Trulia has analyzed this, coming up with the following: In San Francisco, the Peninsula and the East Bay, 43.5 percent of the homes for listed sale are priced above $1 million. In the South Bay, 23.7 percent are.

In “pricey” U.S. markets like the Bay Area, “you’ll need more than a ‘one’ in front of six zeros to buy a mansion,” Trulia chief economist Jed Kolko reports.

The typical million-dollar home is 1,489 square feet in New York City; 1,774 square feet in San Francisco and the East Bay; and 2,161 square feet in the South Bay.

But in 68 of the 100 largest metro areas, $1 million homes are less than 5 percent of the total market. In Colorado Springs, $1 million gets you 6,023 square feet. In El Paso, it gets you 6,908.

“That means the differences in million-dollar homes across the country are so big, you could actually fit million-dollar properties from New York, San Francisco, Honolulu, and Miami together inside a million-dollar mansion in Birmingham and still have room to spare – that is, if you couldn’t find any better use for 8,000 square feet,” Kolko writes.

Bill Gates: It’s OK If Half Of Silicon Valley Startups Are “Silly”

Successful startups lead to successful buyers and sellers, and so we think this article is spot-on. Bill Gates

Courtesy of www.techcrunch.com, 3/15/2014

Microsoft Founder Bill Gates doesn’t worry that Silicon Valley is the home of billion-dollar texting apps and farming games. “Innovation in California is at its absolute peak right now. Sure, half of the companies are silly, and you know two-thirds of them are going to go bankrupt, but the dozen or so ideas that emerge out of that are going to be really important,” Gates told Rolling Stone, in a wide-ranging interview on government surveillance, financial inequality, immigration reform, and the cultural backlash against Silicon Valley.

Gates’ sentiment is a nice to response to a New York Times spread that lambasted Silicon Valley investors for encouraging their brightest minds to work on solving the problems of yuppie 20-somethings.

“Why do these smart, quantitatively trained engineers, who could help cure cancer or fix healthcare.gov, want to work for a sexting app?”, asked writer Yiren Leu in the aptly titled “Silicon Valley’s Youth Problem”.

It’s important to keep in mind that many of the technology industry’s most impactful companies were originally targeted at the recreational lives of (relatively affluent) users. Facebook was built to help ivy league college students share fun photos. Today, Facebook significantly boosts voter turnout, organ donation, and broadband access in developing nations.

To see the full article go here.

Bay Area Home Sales Drop, Prices Rise

HOUSING 031414Courtesy of www.siliconvalley.com, 3/13/14

Where are all the houses for sale?

That’s the question that homebuyers and their real estate agents are asking, as a report Thursday showed February home sales hit a six-year low around the Bay Area.

While factors ranging from credit to affordability can depress sales, “the main culprit is an inadequate supply of homes for sale,” according to real estate information service DataQuick.

While prices jumped, sales of single-family homes dropped an average of 10.5 percent around the nine-county Bay Area, with dips of 15.3 percent in Contra Costa County and 19.5 percent in Alameda County, DataQuick reported. Santa Clara County held its own with a 1.9 percent gain, while San Mateo County was up 8 percent.

Read the full article here.

Dream Home Inspirations We Love

With Valentine’s Day approaching we thought we’d share the home inspirations (practical and otherwise) that we love. An indoor treehouse, staircase slides, desk sandboxes and more.
Things We Love for Homes

For the complete showcase of 33 Awesome Home Ideas, go here.

Courtesy of ViralNova – www.viralnova.com

S&P/Case-Shiller Home Price Indices Forecast

As we enter 2014 the question everyone is asking is what is the prediction for the new year in real estate. 2013 was a wild ride along the bay area peninsula and while sellers are satisfied many buyers are feeling worn out and frustrated. In my personal opinion the start of 2014 will continue with the same low inventory/high demand that we’ve been seeing but will then taper off in spring as buyers lose steam trying to compete. Summer will bring a new quandary.

That said, I want to post a snippet from the latest Case-Shiller report, out last month:

New York, December 31, 2013 – Data through October 2013, released today by S&P Dow Jones Indices for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, showed that the 10-City and 20-City Composites posted year-over-year gains of 13.6%. This is their highest gain since February 2006

“Home prices increased again in October,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Both Composites’ annual returns have been in double-digit territory since March 2013 and increasing; now up 13.6% in the year ending in October. However, monthly numbers show we are living on borrowed time and the boom is fading.
“The year-over-year figures increased slightly from last month. Thirteen cities and both Composites posted double-digit annual returns. Cities at the top of the range (Las Vegas, San Diego and San Francisco) saw smaller annual increases. On the other hand, cities that have been relatively underperforming (Cleveland, New York and Washington) saw their annual gains grow.

“The key economic question facing housing is the Fed’s future course to scale back quantitative easing and how this will affect mortgage rates. Other housing data paint a mixed picture suggesting that we may be close to the peak gains in prices. However, other economic data point to somewhat faster growth in the new year. Most forecasts for home prices point to single digit growth in 2014.”

Bay Area Home Sales Slow, Prices Continue to Rise

For Sale Sign

As our end-of-year recap, here is a data-rich and highly informative article about our market.

December 17, 2013

(Courtesy of The Patch and data information was supplied to Patch by DataQuick)

In San Mateo County, sales volume was down 7.8 percent from November 2012 while the median price rose in that time from $618,000 to $700,500, a 13.3 percent increase.

La Jolla, CA.–Bay Area home sales dipped again in November, constrained by supply and market uncertainty amid mixed economic news. Prices continued their year-and-a-half-long upward march. Purchase and mortgage patterns are moving slowly but steadily toward long-term norms, a real estate information service reported.

A total of 6,659 new and resale houses and condos sold in the nine-county Bay Area in November. That was down 12.3 percent from 7,595 in October and down 10.9 percent from 7,474 in November last year, according to San Diego-based DataQuick.

In San Mateo County, sales volume was down 7.8 percent from November 2012 while the median price rose in that time from $618,000 to $700,500, a 13.3 percent increase.

Last month’s sales tally was 15.1 percent below the November average of 7,840 since 1988, when DataQuick’s statistics begin. Bay Area sales haven’t been above average for any particular month in more than seven years. The most active November was in 2004 when 11,906 homes sold, while the least active was in 2007 with 5,127 sales.

The median price paid for a home in the Bay Area last month was $550,000. That was 1.9 percent higher than $539,750 in October, and 25.6 percent above $438,000 in November 2012.

The Bay Area median peaked at $665,000 in June and July 2007, then dropped to a low of $290,000 in March 2009. While much of the median’s ups and downs can be attributed to shifts in the types of homes sold, it appears that most of the current year-over-year increase in the median reflects an actual rise in home values.

“Up until half a year ago, the greater Bay Area market was basically bouncing up off bottom. Beginning last summer, the market started incrementally rebalancing, trending toward normalcy, as it were. Not just sales and prices: There has been a serious drop in distress sales, cash sales, absentee buyer sales. Mortgage financing patterns are still far from normal, but are moving in the right direction,” said John Walsh, DataQuick president.

The number of Bay Area homes that sold for less than $500,000 last month dropped 32.5 percent year-over-year, while the number that sold for more increased 8.2 percent, DataQuick reported.

Last month distressed property sales – the combination of foreclosure resales and “short sales” – made up 12.8 percent of the resale market. That was down from 13.1 percent in October and down from 35.7 percent a year ago.

Bay Area home buyers put $1.8 billion of their own money on the table last month in the form of a down payment or as an outright cash purchase. That number hit an all-time high of $2.6 billion in May this year. Home buyers borrowed $2.7 billion in mortgage money from lenders last month.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 50.1 percent of last month’s purchase lending, up from a revised 47.7 percent in October, and up from 40.3 percent a year ago. Jumbo usage dropped to as low as 17.1 percent in January 2009.

Adjustable-rate mortgages (ARMs), an important indicator of mortgage availability, accounted for 20.1 percent of the Bay Area’s home purchase loans in November. That was down from 20.5 percent in October, and up from 12.0 percent in November last year. Since 2000, ARMs have accounted for 47.4 percent of all purchase loans. ARMs hit a low of 3.0 percent of purchase loans in January 2009.

Buyers who appear to have paid all cash – meaning no sign of a corresponding purchase loan was found in the public record – accounted for 22.0 percent of sales in November. That was down from a revised 23.9 percent in October and down from 28.6 percent a year earlier. The monthly average going back to 1988 is 13.3 percent. Cash buyers paid a median $450,000 in November, up 36.4 percent from a year earlier.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $2,167. Adjusted for inflation, last month’s payment was 24.1 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 43.9 percent below the current cycle’s peak in July 2007. It was 71.8 percent above the February 2012 bottom of the current cycle.

Indicators of market distress continue to decline. Foreclosure activity remains well below year-ago and far below peak levels. Financing with multiple mortgages is very low, and down payment sizes are stable, DataQuick reported.

To view the county-by-county chart, please visit DQNews.com.

U.S. FHA to lower loan limits in 2014

Here is the latest information on loan limits for FHA loans, courtesy of Reuters.

WASHINGTON Fri Dec 6, 2013 5:38pm EST

Dec 6 (Reuters) – The U.S. Federal Housing Administration will scale back the size of loans it backs to a maximum $625,500 at the beginning of 2014 to reduce its share of the U.S. mortgage market, the agency said on Friday.

Currently, the FHA’s limits that vary by region, from $271,050 up to $729,750 in the country’s most expensive housing markets. The FHA’s move brings it partly in line with taxpayer-owned mortgage financiers Fannie Mae and Freddie Mac, which use a $417,000 cap in most areas and have an upper limit of $625,500.

The reductions will impact buyers in about 650 counties across the country with relatively high home prices.

Loan limits are based on median home prices in each county, and they do not go any lower than $271,050. That floor will remain unchanged, the FHA said.

With an FHA loan, buyers can put down as little as 3.5 percent. The FHA, which does not make loans, provides mortgage insurance to borrowers without enough of a down payment to qualify for prime loans.

Sur-price, Sur-price: Silicon Valley is One of the Most Expensive Places to Live

Possibly we are tired of reading these, but this bizjournals.com article reinforces the ongoing reality that the bay area is and always has been a pricey proposition.

———————————————————————————

(Courtesy of contributing writer Sarah Drake, San Jose Business Journal)moneywomen 304

Here’s something you probably already know: Silicon Valley’s residential real estate market is ultra expensive, and a “most expensive places to live” report released today adds a little more proof to the pudding.

Our colleagues over at Coldwell Banker have released a Home Listing Report — based on the average listing price of four-bedroom, two-bathroom homes — scoped out nearly 2,000 U.S. markets and 52,000 listings between January and June to compile the final list of 25 markets.

California dominates with 13 spots, and Silicon Valley takes eight of those.

The Bay Area enclaves among America’s most expensive real estate markets are listed below:

  • No. 3: Saratoga, the highest rated Silicon Valley city, has a $1.7 million average listing price
  • No. 4: Los Gatos, $1.4 million
  • No. 5: San Francisco, $1.3 million
  • No. 7: Cupertino, $1.3 million
  • No. 10: Redwood City, $1.2 million,
  • No. 12: San Mateo, $1.1 million
  • No. 17: Sunnyvale, $1.1 million
  • No. 22: Campbell, $974,212

Beach destination spot Malibu takes No. 1 with a $2.2 million average listing price, while Newton, Mass. rounds out the top 25 list with $912,745.

Another piece of the report that may not surprise many: not one California city for that matter, was named to the Most Affordable Real Estate Markets list.

Latest Update on Loan Limits – 10-29-13

Great News! FHFA announced the reductions in Fannie/Freddie loan limits will be delayed for at least six months. Furthermore, any such reduction will only occur after a six-month prior notice. This information should relieve many buyers, especially after previous discussions of lowering Conforming loan limits and remitting Temporary High Balance loans.

More great news, Interest Rates have been dropping and are currently at 4 month lows with a positive outlook of them dropping further. This will continue to drive the Purchase Market and may help past clients refinance. In the past, many underwater or low equity homeowners could not refinance loans that did not qualify for the Government HARP program. However, with values continuing to appreciate and Interest Rates decreasing, many people can now, or may soon be able to possibly refinance.