California sees spike in home sales falling through due to insurance

 

California sees spike in home sales falling through due to insurance

Source: Newsweek
California home sales are falling as property insurance becomes increasingly unaffordable, a new report from the CALIFORNIA ASSOCIATION OF REALTORS® has found. Based on responses from 96,000 REALTORS® in California, 13.4 percent said a sale had fallen through because of issues finding affordable insurance. That means about one in seven REALTORS® saw home insurance issues derail a sale – what was double the rate of last year, when 6.9 percent of REALTORS® said the same. 

For 74.7 percent of REALTORS®, no insurance was available to a client, reflecting a growing crisis as more insurers leave the state. Meanwhile, 17.8 percent of the REALTORS said insurance premiums were simply too expensive for their client, causing the deal to collapse. While the insurance crisis might not be posing a significant problem in top markets such as the Bay Area, it can still force expensive renovations and delays in escrow, experts say. 

See the whole article here.   Like my updates? Subscribe to my Blog! Thank you for reading,

Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

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New Real Estate Rules: what buyers and sellers need to know

 New real estate rules: what buyers and sellers need to know

The experience of buying or selling a home will soon be different than it was in the past. A recent National Association of REALTORS® class action settlement agreement has laid out new rules that will change how brokers and agents are paid. “The buyer and seller [will be] looped into the transaction more so we’re able to be more transparent with them about compensation,” said Barbara Clemons, president of the Bay East Association of REALTORS. “There will be more forms for the buyer and seller to fill out.” 

That will be apparent when visiting an open house – buyers will be asked to sign forms and if they don’t have an agent representing them, they might not be able to get additional information about a property without an agent. Buyers will have to negotiate how much they are willing to pay the broker representing them. But sellers could incentivize a sale by offering to pay all or a portion of the buyer’s agent’s commission. 

Read more on the subject.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

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U.S. Home Investor Share Reached New High in Q4 2023

 U.S. home investor share reached new high in Q4 2023

Source: CoreLogic

The share of homes being purchased by home investors in the U.S. climbed to almost 29 percent in December 2023 and could exceed 30 percent in 2024, according to CoreLogic data. Despite price appreciation slowing in 2023, the share of investor purchases has remained high.

Elevated interest rates have not deterred home investors, and in fact because both prices and rates remain high and the Federal Reserve has yet to cut rates, there is strong demand for home rentals that investors are seizing upon. 

Owner-occupied buyers are purchasing about 100,000 fewer homes per month than they were before 2022, though investors are likely only making a small dent in homeownership numbers. Home-flipping activity continued to fall in the first half of 2023. Only 12 percent of investors who purchased a home in March 2023 resold by the end of December 2023. Flipping is a relatively less attractive business model than renting out a home when appreciation is slow and interest rates are high. If mortgage rates decline in the second half of 2024, this may bring owner-occupying buyers back off the sidelines, leading to a drop in home investor share. 

Read the whole article here – by Thomas Malone, Professional, Economist.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

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A Perspective on Real Estate Prices

 A Perspective on Real Estate Prices: this is a graph that I created and have been updating for over 25 years now.

Prices have been fairly stable in 2023, going down slightly from 2022.  But these are median prices of Single Family Residences for the US, California, the 9 counties of the SF Bay Area, and the County of Santa Clara.  

This is not always the same story for townhomes/condominiums:  median prices have usually gone up a bit from 2022 to 2023, in the Bay Area Cities.

Click on the graph to see larger.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

California Program Helps You Pay For Your First House

 

Applications open April 3 for California program that helps pay for your first house

Source: KQED

When it rolled out last year, the California Dream for All Shared Appreciation Loan program – a loan application for first-time homebuyers – exhausted its approximately $300 million of funding within 11 days. That prompted some changes this year for when the down payment assistance program reopens for residents on April 3. The state has about $250 million in the fund, which is expected to assist between 1,600-2,000 new applicants, according to the California Housing Finance Agency (CalHFA). 

“The program is designed to help those who may not have had the benefit of generational wealth in buying their first home,” said CalHFA Spokesperson Eric Johnson. Under the program, the state will put down up to 20 percent of the cost of the home, or up to $150,000. The money gets repaid when you sell the home, plus 20 percent of any appreciation in the home’s value. Applicants must be California residents making up to 120 percent of the area’s median income, as well as a first-generation homebuyer, meaning that their parents do not own a home in the United States. 

Read the full article here.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

 

Want a largely risk-free California home purchase? Own it for 12 years

 

Want a largely risk-free California home purchase? Own it for 12 years  

 Source: Lake County Record-Bee

Buying a home is generally a long-term investment, but how long does one need to keep a home in order to increase one’s odds of seeing the price increase? This op-ed discusses analysis by a Southern California business columnist, Jonathan Lansner, of home price trends in the state since 1987.  

He found that while the majority of one-year, two-year, four-year, or even eight-year periods yielded price increases, 30 percent of one-year periods saw prices fall, and 27 percent of four-year periods also showed decreases. Even owning a house for eight years wasn’t foolproof because 21 percent of eight-year periods saw prices decrease (while 79 percent saw prices rise, even as much as 61 to 214 percent). Since 1987, Californians who owned a home at least 12 years saw no price declines, and the average price gain was 94 percent. There’s no guarantee that this historical trend will predict the future, but it reinforces the benefit of thinking long-term.

Read the whole article from Jon Lansner (jlansner@scng.com) Orange County Register.  

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

 

Feb 2023 Update on the Silicon Valley Real Estate Market

Latest stats on the Bay Area real estate market.

The Take-Away:
Year-over-year prices have adjusted: prices have fallen about 15% from the highs of the market in April 2022, and then started to go back up a bit: prices have stopped falling and are now quite well sustained as a whole.  However the picture is different locally depending on how desirable the location is, or the size of the home - since the pandemy larger homes are more desirable.  The premium locations continue to draw multiple offers and experience an active market.  Good pricing is as always key to a good sale.

View Web Version

Trends At-a-Glance for Santa Clara County Trends At a Glance Jan 2023 Previous Month Year-over-Year Median Price $1,529,000 (+4.4%) $1,465,000 $1,688,890 (-9.5%) Average Price $1,932,710 (+9.4%) $1,767,070 $2,041,660 (-5.3%) No. of Sales 262 (-35.9%) 409 429 (-38.9%) Pending 869 (+1.9%) 853 902 (-3.7%) Active 533 (+8.3%) 492 389 (+37.0%) Sale vs. List Price 98.9 (+0.2%) 98.7 113.7 (-13.1%) Days on Market 34 (+7.8%) 32 14 (+142.6%) Days of Inventory 61 (+69.1%) 36 27 (+124.4%)

Market Barometer

Prices and Sales Days of Inventory

Sales Year-to-Date Sale Price/List Price Ratio

Market Overview Home Sales Prices Mixed   The median sales price for single-family, re-sale homes rose, month-over-month. It was up 4.4% from December. It was down 9.5% compared to last year. The average sales price for single-family, re-sale homes was up 9.4%, month-over-month. It was down 5.1% year-over-year.  There were 262 homes sold in Santa Clara County last month. The monthly average since 2000 is 987. The sales price to list price ratio rose from 98.7% to 98.9%.  As of February 5th, there were 533 homes for sale in Santa Clara County. The average since January 2000 is 2,703.  It took thirty-four days to sell a home last month. That is the time from when a home is listed for sale to when it goes into contract.   The median sales price for condos was flat 9.4% compared to last January. The average sales price gained 0.9% year-over-year. Condo sales were down 52.8% year-over-year. There were 110 condos sold in December. The sales price to list price ratio rose from 99.2% to 99.4%.  As of February 5th, there were 247 condos for sale in Santa Clara County. The average since January 2000 is 757.  It took an average of thirty-three days to sell a condo last month.   If you are planning on selling your property, call me for a free comparative market analysis.

 

Warm regards,

Francis C. Rolland
Coldwell Banker - Los Altos
- Serving you since 1985

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Americans Misinformed on The Housing Market

 Source: The Hill

Americans who are planning to purchase a home in 2023 are woefully misinformed about the nation’s mercurial housing market, even as millions of them prepare to buy homes, according to a survey by NerdWallet. On average, they hope to spend $269,200, which falls more than $100,000 short of the median home price, which was $388,100 in December, according to the real estate brokerage Redfin. Home prices crossed the $269,000 threshold sometime in 2013, Federal Reserve statistics show. 

Two-thirds of those surveyed said they expect an imminent crash, however, real estate economists do not. Lawrence Yun, chief economist for the National Association of Realtors, forecast an average sale price of $385,800 this year, about the same as last year. Redfin predicts a 4 percent drop: bad news for sellers, but hardly a crash.   

See the whole article here.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?