Monday, October 8, 2018

Buyers and Lenders...

Are you thinking of purchasing a home soon?  Do you need a loan?
Here are some interesting statistics, from the California Association of Realtors.

The Take-Away: buyers should have chosen their loan, and their lender before starting their home search, as it is an important part of the decisions they have to make relative to the whole process.  Their search will depend in part on what they find out with their lender.



Thank you for reading!  If you like my blog, share it! ;-)
Francis

Home Valuation tool
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Friday, September 28, 2018

Where Do People Get Money to Buy in California? Mom and Dad, Often.


Where do people get money to buy in California? Mom and dad, often.

I read this interesting article (with interactive map) on the KQED news website about the downpayments made for california purchases made with an FHA loan.  Granted, not all loans are FHA in California, especially in our local counties of Santa Clara and San Mateo. But for most of the rest of California, it is interesting to see that parents help with the downpayment of their kids' purchase.

The California Dream series is a statewide media collaboration of CALmatters, KPBS, KPCC, KQED and Capital Public Radio with support from the Corporation for Public Broadcasting, the James Irvine Foundation and the College Futures Foundation.


  • KPCC crunched the numbers on more than 600,000 FHA loans, a type of government-backed mortgage that's common with first-time buyers.FHA borrowers can use money from relatives for their down payment. In recent years, that kind of family financial help has been on the rise in California.
  • Back in 2011, about one in four FHA loans in California included down payment money from relatives. Today, it's one in three.
  • Family down payment support is playing an even bigger role in many parts of California, outstripping the national rate of 26 percent. Last year, in dozens of California ZIP codes — covering parts of East San Jose, North Hollywood, South Central Los Angeles, Santa Ana and Alpine in eastern San Diego County — at least half of FHA borrowers were getting family members to help with the down payment.
  • Parents are not just gifting down payments to their kids. They're also co-buying houses.A recent quarterly report
    from Irvine-based real estate data firm Attom Data Solutions found that 48 percent of houses purchased in San Jose had sales deeds that listed multiple non-married buyers (often an indication that parents are co-buying with their children). The same was true for 38 percent of homes purchased in San Francisco.
Thanks for reading,
Francis

Home Valuation tool
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A worthy local non-profit to remember: Second Harvest Food Bank Santa Clara County.

Friday, September 21, 2018

HOA's etc... Condominiums and Townhomes

What's in an HOA - Homeowners' Association?

Even though the old timer always said: "the land, son, it's the land that matters", nowadays a lot of real estate is in the form of condominiums and townhomes.  In fact in recent years, nationally, the appreciation is actually higher for condos and townhomes than for traditional houses, called SFR  (single family residences), a term which implies that there is a piece of land that comes with it.  The reason is because since they were cheaper to start with, and they are usually "starter homes", they were more in demand because more affordable.  Also, lifestyles have evolved and many more people live in cities where density is higher (hint: like in the Silicon Valley).

What do homeowners think of their HOA? The following information is provided by the California Association of Realtors.


HOAs: Protecting Home Values


if you are considering a purchase of a planned unit development ("PUD"), you may want to look at one of my older posts regarding condominiums in the Silicon Valley, or another one regarding the difference between condominiums and townhouses.

Thank you for reading, and share my blog if you like it!
Let me know how I can help you with your real estate needs,
Best regards,
Francis

Home Valuation tool
Detailed, local trends etc...
Current mortgage rates   (going up...)

A worthy local non-profit to remember: Community Services Agency in Mountain View.



Monday, September 17, 2018

C.A.R. Files Revised Ballot Initiative


C.A.R. Files Revised Ballot Initiative  (California Association of Realtors).

In its continuing effort to address California’s unprecedented housing supply crisis and eliminate the “moving penalty” that severely restricts the ability of seniors, disabled residents, and victims of natural disasters to relocate, C.A.R. as filed a revised initiative with the Attorney General for preparation of title and summary for the November 2020 ballot. The new initiative would:
  • Remove the “moving penalty” for seniors 55 and older, the disabled, victims of natural disasters, and those whose homes are located on contaminated property, allowing them to carry their current Proposition 13-protected property tax assessment level to another home of any price, anywhere in the state, any number of times.
  • Eliminate intergenerational transfers of primary residences and other inherited property being used as income-producing properties without reassessment.
  • Address abuses by commercial property owners who avoid property tax reassessment by means of “creative” transfers.
“Filing this new initiative will allow C.A.R. – in the event the ‘moving penalty’ is not eliminated this November – to immediately begin gathering signatures to qualify the new initiative for the November 2020 ballot and reinforce our commitment to making tax fairness a reality,” said C.A.R. President Steve White. “This new initiative will provide for property tax base portability, reform the intergenerational transfer laws, and address the true ‘split roll’ problem – corporations gaming the current property tax reassessment system. And, most significantly, it will raise money for schools and local governments,” stated White.

C.A.R. has already qualified an initiative for the November 2018 ballot, now known as Proposition 5, which addresses the “moving penalty” on seniors, the disabled, victims of natural disasters, and those whose homes are located on contaminated property.


This Initiative would help a lot the real estate shortage situation in the Silicon Valley, as it would make it easier for a lot of would-be sellers to sell and buy somewhere else in California, while keeping their property tax basis. This in turn would free up inventory and enable more would-be buyers to buy. 

Francis Rolland


Home Valuation tool
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A worthy local non-profit to remember: Community Services Agency in Mountain View.

Friday, September 14, 2018

Real Estate Silicon Valley - Price Seasonality

Here is an update on my regular graphs on the seasonality of prices in the Valley.  This graph shows the peaks in the County of Santa Clara (mostly = the Silicon Valley) which includes among other big city names: Santa Clara, San Jose, Sunnyvale, Cupertino, Palo Alto, - all big locations for the high tech industry.

As expected, the months of Feb to May show the highest average prices every year, followed by a (small) dip in summer, and a small bump in September-October, and again another slow-down in Nov.-Dec..   As in previous blogs, I'd like to point out that all of this is statistical, and does not necessarily mean that a given property will sell for more or less depending on the month.  It does mean that over large numbers of sales, the trend exists.
The sales prices for a given month show the following month, as transactions usually take about 3-4 weeks to close.


Click on the picture to see it full size.

Thank you for reading, and as always, if you like the post, do share it ;-)

Francis

Home Valuation tool
Detailed, local trends etc...
Current mortgage rates   (slight recent uptick)
A worthy local non-profit to remember: Community Services Agency in Mountain View.

Friday, August 10, 2018

Half of All US Homes Are More Valuable than Pre-Recession Peak

Half of All US Homes Are More Valuable than Pre-Recession Peak.

A decade after the U.S. housing market collapsed, half of the country's homes have regained the value they lost during the recession, according to the June Zillow Real Estate Market Report.

Nationally, the median home value is $217,300, up 8.3 percent over the past year and 8.4 percent above the highest point of the housing bubble. The median home value has surpassed its bubble peak level in 21 of the nation's 35 largest housing markets.

In places that have seen some of the strongest growth since the market crashed, nearly every home is now more valuable than it was during the boom years. However it is not the same everywhere in the Country, and this article implies that there are still about 1/2 of the homes which have not caught up yet with the pre-recession levels.  


Which in my mind is a good reminder that a financial crisis leaves long-lasting scars, and that prudence should be the norm when it comes to financial markets.

Thank you for reading, and let me know when you have a real estate question or need.
Francis

Home Valuation tool
Detailed, local trends etc...
Current mortgage rates   (slight recent uptick)
A worthy local non-profit to remember: Community Services Agency in Mountain View.

Friday, August 3, 2018

California Home Price Fundamentals


California Home Price Fundamentals.

Check out this interactive map of the “Home Price Fundamentals” for California, and individual Counties.
The interactive tool is provided by the California Association of Realtors (CAR)

Some of these graphs are most interesting, like the one called “Years of Savings Required for Down payment”, which is now close to 20.  The one called “Price to Income Ratio” shows that it takes about 8.3 years of paychecks to purchase the median priced home in California right now.
 
If you look at the County of Santa Clara though, the figures are staggering: it takes over 11 years of salary to afford the median priced home, and it takes over 26 years of savings (at 6% of savings rate) to afford the typical 20% down payment.

It also shows that in California, if you are in the median, it takes about 59% of the yearly income to pay for your mortgage...

Thank you for reading,
Francis

Home Valuation tool
Detailed, local trends etc...
Current mortgage rates   (slight recent uptick)
A worthy local non-profit to remember: Community Services Agency in Mountain View.

Thursday, July 5, 2018

What Home Buyers Want...

From the California Association of Realtors, and Realtor.com:
these are the attributes most likely to be seeked by homebuyers:



Another thing that I would definitely add to this picture is, for buyers 55+ and older:
- a one-level property with no stairs.
... and in general, my experience is that would-be home buyers are more attracted by homes with a lot of natural light and an open floor plan, and will sacrifice other features in order to get that.

Francis
Home Valuation tool
Detailed, local trends etc...
Current mortgage rates   (slight recent decline)
A worthy local non-profit to remember: Community Services Agency in Mountain View.

Tuesday, June 19, 2018

Home prices going forward in the US... & Bay Area

US house prices are going to rise at twice the speed of inflation and pay: Reuters poll   
Source: CNBC Article

An acute shortage of affordable homes in the United States will continue over the coming year, according to a majority of property market analysts polled by Reuters, driving prices up faster than inflation and wage growth.

The latest poll of nearly 45 analysts taken May 16-June 5 showed the S&P/Case Shiller composite index of home prices in 20 cities is expected to gain a further 5.7 percent this year.
That compared to predictions for average earnings growth of 2.8 percent and inflation of 2.5 percent 2018, according to a separate Reuters poll of economists.



U.S. house prices are then forecast to rise 4.3 percent next year and 3.6 percent in 2020.

A further breakdown of the April data showed the inventory of existing homes had declined for 35 straight months on an annual basis while the median house price was up for a 74th consecutive month.

About 80 percent of nearly 40 analysts who answered an extra question said the already tight supply of affordable homes in the United States will either stay the same or fall over the next 12 months.


In the Bay Area, things are not better.  The ratio of home completions to job growth is still very small, which will keep pressure on home prices here too:




.. while according to this article from the Mercury News, the nation's top three most expensive places for renters are here in the Bay Area...

Thank you for reading,

Francis
Detailed, local trends etc...
Current mortgage rates
Price your home now
A worthy local non-profit to remember: Community Services Agency in Mountain View.

Tuesday, June 5, 2018

New Surprising Buyers Demographics

New Surprising Buyers Demographics:

According to a new report by Veritas Urbis Economics, the landscape of buyers is changing in surprising ways as compared to  35 years ago.

According to this Housing Wire article by Kelsey Ramirez:
- the share of women as buyers has increased from 18.9% in 1981 to 46.4% in 2017,
- single women homebuyers make up 18.9% of all buyers, when it was just 9.1% in 1981,
- the share of households over 55 increased to 27.8% in 2017 (it was 16.1% in 1981),
- homebuyers under 35 made up 52% of all buyers in 1981, they are now under 34%.

How does it play out in the Bay Area of San Francisco, the Silicon Valley?
I don't think we fall within those stats very well when it comes to age.  In my (limited) experience, in the local market, there are quite a few younger households among the buyers, and as far as households over 55, they make up a lot of the sellers, not buyers: as people age, they are likely to sell their home at some point, and in that case they most often leave the area.  Typically this demographic segment does not buy in the Valley as prices and property taxes are too high for the retired population.  Although we do have a portion of the elderly buyers who are moving down, after selling a property that has become too large or far away for them.

Thank you for reading,

Francis

Detailed, local trends etc...
Current mortgage rates
Price your home now
A worthy local non-profit to remember: Community Services Agency in Mountain View.

Thursday, May 24, 2018

Who is Buying Homes, Nationwide?


Yes indeed, who is buying homes nowadays in the U.S.?
This little graph summarizes well some interesting statistics, like for instance the fact that more single women buy a place than young single men, but still 65% of all buyers were married couples.
With regards to women buying a home alone, this article (for the Realtor Magazine) also indicates that in some areas home builders design their homes with women in mind: in some of their developments, more than 50% of buyers are single women.



Thank you for reading,
and let me know if I can help you with any real estate questions.

Best regards,
Francis


Price your home online

A worthy local non-profit to remember: Community Services Agency in Mountain View.

Friday, May 11, 2018

The Effect of Interest Rates Increase

What happens to your mortgage payments when interest rates change?

For all buyers trying to get in contract right now, the same question is on everyone's mind: what are interest rates today, and how much is my loan payment going to be after my offer is accepted?

This informational slide below, compliments of the California Association of Realtors, gives us a pretty good idea on the impact of any change in the rates:





Also, here is a good link for current mortgage ratesto keep abreast of interest rates in general.

Tip: unless you are a gambler, it is usually a good idea to lock the rate the moment you are in contract to purchase a home.
Should 30-yr fixed rates increase too much on you, and you cannot qualify for the same amount any longer, you may have to consider a loan that would be fixed for a few years, and which then becomes adjustable.  These are the "3-yr, or 5-yr, or 7-yr fixed then adjustable" loans.  The starting rate, on which you are qualified by the lender, is lower, and that in turn allows you to qualify for a larger loan amount.  Ask your lender to advise you on the matter.

Let me know if I can help with any of your real estate questions!

Thank you for reading!
Francis

Price your home online

A worthy local non-profit to remember: Community Services Agency in Mountain View.

Monday, April 30, 2018

Disclosures Sellers Don't Have to Make...

Do you have to disclose that a house is haunted?

Since disclosures are one of the most important topics to address for sellers who sell their home, this is a subject certainly worth talking about.  A good rule of thumb is typically: if you wonder if you have to disclose something about your property, usually the answer is a resounding "YES".

With this in mind, I found this article from the Law Offices of Peter Brewer most interesting.  It details a few (rare) items that sellers do not have to disclose.
Arguably, the fact that one does not have to disclose does not necessarily mean they should not disclose, and in all cases it is always advisable to ask a qualified California Licensed Real Estate Attorney whether to disclose a specific item if you really are wondering about it - if you sell in California.
Although Realtors cannot advise on legal matters, they will usually tell you that it is best to disclose if you are in doubt (with a few exceptions) - and this is where the above article, written by attorneys, comes in as most interesting.

Most real estate lawsuits stem from sellers' or agents' disclosures or I should say: "lack of disclosures".

Marketing your property is certainly a very important aspect of selling a property, but working on preparing good disclosures when you sell your home is in my opinion by far the most important thing to do, and the wrong guidance on this matter could cost you a lot. I think it is the most important criterion in choosing your Realtor to sell your California property.

Thank you for reading!
Francis

Price Your Home
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Monday, April 23, 2018

Price Correlation - SF Bay Area - Nasdaq

Interesting correlation between the average sales price in the San Francisco Bay Area, and the Nasdaq over the past 20 years or so.

This graph is compliment of our Coldwell Banker analysts, and shows the average sales price for Coldwell Banker properties only, not ALL of the sales of properties on the market.

Still, it shows how heavily our local market, around San Francisco, is leaning on the high-tech heavy Nasdaq.

Click on the graph to see larger.

Thanks for reading!
Francis

Price Your Home
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Friday, April 6, 2018

More Buyers Gamble with Sight-Unseen Offers

I was really surprised to read this article in the Realtor Magazine (National Association of Realtors) about the number of people making offers without seeing the property first.
The source of the article is a survey of more than 1,500 home purchasers by the real estate company Redfin.

The figures are, I think, somewhat staggering:
in June of 2016, 19% of purchasers made an offer sight-unseen,
in May of 2017, it was 33%, and
in November/December of 2017, it was up to 35%.

It has happened to me to have a client make a purchase "long distance", so I understand the circumstances under which it can happen, but this number still surprises me.  I guess with the market going up so much, and properties selling so fast (especially in the Silicon Valley), one can see how some home buyers may have to cut some corners.

You can click on these links for more details on the Realtor.org article, and the original article on the Redfin web site.

Nationwide, US home prices are up 6.7% year-over-year in February.   

Thanks for reading!
Francis

Price Your Home
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Saturday, March 17, 2018

The Difference Between "Deed" and "Title"

What is the difference between a “Deed” and “title” to a property?

From our specialists at Cornerstone Title, the Title Insurance branch of Coldwell Banker, here are some pointers for buyers and real estate owners in California. (adapted from an article by Audrey Ference on Realtor.com).

A deed is a legal document used to confirm or convey the ownership rights to real property. It must be a physical document signed by the seller/ grantor.

Title, however, is a legal way of saying you have ownership of real property. Title is not a document, but a concept that says you have the rights to that property.

So when you buy a property, you will receive the deed, a document that proves you own it. That deed is an official document that shows that title to the real property has been conveyed to you as the grantee.

How to get the deed and take title of a property?

To get the deed and "take title," or legally own the property, your title company will perform a title search. This ensures that the seller has the legal right to transfer ownership of the property to you, and that there are no liens against it. If everything is clear, then at closing the seller will transfer the title to you, and you become the legal owner of the property.

In California, the title company will ensure the deed is recorded at the county recorder’s office or courthouse, depending on where you live. You'll generally get a notification a few weeks after closing escrow, that your deed has been recorded. At that point, you have the deed and title to the real estate and the property is all yours.

What is title insurance?

Even with all of the due diligence a title company does before closing, there can be rare instances when title problems can pop up later (e.g., missed liens and other legal issues that can be very costly to resolve). To protect against any financial loss, two types of title insurance exist: owner's title insurance and lender's title insurance.

Unlike other types of insurance that protect the policyholder from events that may happen in the future, an owner’s title policy protects the buyer from events that have happened in the past that may jeopardize your financial interest, such as title defects, fraud, and unpaid liens against the property, or claims that someone else is the real, legal property owner.  On the other hand, when you secure a mortgage, your lender or bank will require that you purchase lender's title insurance to protect the lender in case any title problems arise. Lender's title insurance protects the lender's interest in your property until the loan has been paid off.
Thank you for reading!
Francis   

My Home Valuation tool
Detailed, local trends etc...
Current mortgage rates
A worthy local non-profit to remember: Community Services Agency in Mountain View.

Thursday, February 1, 2018

The Property Tax Fairness Initiative

The California Association of REALTORS® (C.A.R.) is embarking on an historic effort to increase homeownership opportunities. C.A.R. is going to qualify an initiative - the Property Tax Fairness Initiative - for the November 2018 ballot which will allow senior homeowners (55 years of age and older) among others to keep all or most of their Proposition 13 property tax savings when they move.

I think this is important, because seniors, who are often on a fixed income, fear they will not be able to afford a big property tax increase if they sell their existing home and buy another one, discouraging them from ever moving. As a result of this “moving penalty” almost three-quarters of homeowners 55 and older haven’t moved since 2000. C.A.R.’s portability initiative would allow senior homeowners to transfer their property tax base from their current residence to a replacement residence located anywhere in California.

The measure, if approved by voters, will let thousands of seniors, currently “locked into” their homes by low property tax rates purchase a home that will better suit their needs while expanding the housing inventory for young families seeking to buy a home.  According to the California Legislative Analyst's Office, tens of thousands additional homeownership opportunities will occur annually.

The initiative would remove the “moving penalty” for seniors 55 and older, and also for the disabled and victims of natural disasters, allowing them to carry their current Proposition 13-protected property tax assessment level to another home of any price, anywhere in the state, any number of times.

Let me know if you are interested in more information on this subject or if you would like to sign a petition to place this initiative on the November ballot.

Thank you for reading!
Francis

My Home Valuation tool
Detailed, local trends etc...
Current mortgage rates
A worthy local non-profit to remember: Community Services Agency in Mountain View.