Prices in the Bay Area at large are leveling off.
Not everywhere, and not all in the same manner. But DataQuick, the La Jolla-based real estate information services firm, said the median sale price for new and existing homes in the region in July stayed at a 3-month plateau at $617,000. That was down .2 % from June's median price but up 9.8 % from the $562,000 median in July 2013.
Complete information along the Peninsula can be found in this Coldwell Banker article, with the following remarks with regards to the area close to Los Altos and Palo Alto, and referred to as "Silicon Valley" (always more competitive):
...... Silicon Valley – The market is a bit spotty, according to our Cupertino manager. The demand for
great houses with Cupertino schools is as high as ever, but certain segments seem to have cooled off. It’s August, after all! Our Los Altos manager reports that there is lower inventory currently in most of the local cities, which is basically seasonal. But the stagers are booked out the whole month of September, so that means some new inventory hopefully. Downtown Mountain View houses often sell within one week. The condos are still getting strong activity with multiples either the next week or following. Palo Alto still has low inventory, but if the house is priced too high, it doesn’t sell. The best sections of town still lack inventory and there are buyers lined up for each one. Last week a house in old Palo Alto sold for more than 1M over list ($6,700,000) with multiple offers. Los Altos Hills with Palo Alto schools attract many buyers and multiple offers. North Los Altos is still in huge demand as is most of the city and Mountain View west of El Camino. Sunnyvale is still occasionally seeing a new all-time high. In Los Gatos, inventory is tightening up even more as school heads back into session. San Jose-Almaden agents are not seeing as many multiple offers in Blossom Valley and Santa Teresa but they are in Almaden and Cambrian. One listing in Cambrian had 20 offers. Our San Jose Main office manager said the local market is seeing another drop in inventory, while buyer demand has pulled back as well. Open houses are well attending with some open houses having 40 groups each day on the opening weekends. Multiple offers are still prevalent, but the sheer number of offers has seemed to decrease. All signs indicate that we will have a strong fall. The local Willow Glen listing inventory remains consistent where it has been the last month. Agents are waiting to see if the post Labor Day weekend will bring a surge of new listings for the fall selling season. With tight inventory and strong buyer demand agents there have seen heavy open house traffic. With this increased demand agents starting to see the pre-emptive offers, multiple offers and aggressive offers way over asking price. The market is getting hot again in Willow Glen. ...
thank you for reading!
Francis
Francis
Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
non-profit organization worth noting: Partners for New Generations
- now called:
Mentor Tutor Connection.
Sound Real Estate information for the mid-peninsula of San Francisco: the Silicon Valley.
Coldwell Banker Realty - Los Altos -
Realtor - CalRE# 00896319
Tuesday, September 2, 2014
Monday, August 25, 2014
How old are these houses now?
Coming back recently from the old continent, where everything is at least 3 or 4 centuries old, when it is not from the previous millennium, I got curious about the age of properties in the US. It turns out that:
- 14% of houses are between new and 14 years old,
- 25% are between 15 and 34 years old (33 million homes),
- 30% are between 35 and 54 years old (40 million homes),
- 16% are between 55 and 74 years old (21 million),
- 8% are between 75 and 94 years old (11 million homes),
- and 7% are over 95 years of age! (9 million homes).
If you are buying an old property, in the latter category, I would definitely consider hiring a property inspector who specializes in older homes. There is an Historic Building Inspectors Association. The problems in an older home may not be the same at all as in a newer home, and an inspector who is familiar with how homes were built a century ago would be more useful to detect what is still good (or even better than newer materials), and what has become dangerous. (i.e. some electrical set ups, plumbing arrangements, degrading materials, etc...).
It is unlikely that you will be in this situation in the Bay Area, but certainly not impossible!
Francis
Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
A place worth noting: Our Brother's Home in MountainView
- 14% of houses are between new and 14 years old,
- 25% are between 15 and 34 years old (33 million homes),
- 30% are between 35 and 54 years old (40 million homes),
- 16% are between 55 and 74 years old (21 million),
- 8% are between 75 and 94 years old (11 million homes),
- and 7% are over 95 years of age! (9 million homes).
If you are buying an old property, in the latter category, I would definitely consider hiring a property inspector who specializes in older homes. There is an Historic Building Inspectors Association. The problems in an older home may not be the same at all as in a newer home, and an inspector who is familiar with how homes were built a century ago would be more useful to detect what is still good (or even better than newer materials), and what has become dangerous. (i.e. some electrical set ups, plumbing arrangements, degrading materials, etc...).
It is unlikely that you will be in this situation in the Bay Area, but certainly not impossible!
Francis
Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
A place worth noting: Our Brother's Home in MountainView
Monday, July 28, 2014
Positive Equity Rises in 2013 - local market place update
A new analysis by CoreLogic shows that 4 million homes returned to positive equity in 2013, bringing the total number of mortgaged residential properties with equity to 42.7 million.
However, it is important to note that the CoreLogic analysis indicates that nearly 6.5 million homes, or 13.3 percent of all residential properties with a mortgage, were still in negative equity at the end of 2013.
In our local area, the Bay Area of San Francisco, it is difficult sometimes to keep some perspective on the local market, which has been on fire since the beginning of January 2012. This study by CoreLogic gives perspective at the national level: things have for sure improved enormously, but all is not over from the 2008-2009 crisis.
In the Bay Area, let's note that the inventory of homes (SFR + condos) for sale was about 1,700 after the first week of July, as compared to 1,872 a year ago. There are fewer homes for sale. It explains why property values have gone up so much in the past 12 months. Inventory was at 7,500 in May of 2008!
For the area that includes only Los Altos, Los Altos Hills, Mountain View, Palo Alto and Menlo Park, inventory stands right now at:
150 homes total for sale (both houses and condominiums and townhomes, called PUD's), vs
184 last year at the same period.
We still have a very low inventory.
Dealing in the local market place day in and day out, I can however note here that, overall in the County, the activity seems to slow down: I have noticed fewer multiple offers in general, and a slower price increase in many areas. Except for Palo Alto and all areas with the best schools, I can sense that it is a slower activity now, during July. This slow down can be the normal cycle, which slows down during the summer vacations (see my last graph-blog on the subject), or it could be a more general trend tied to the market in general. We'll see in September!
Thanks for reading!
However, it is important to note that the CoreLogic analysis indicates that nearly 6.5 million homes, or 13.3 percent of all residential properties with a mortgage, were still in negative equity at the end of 2013.
In our local area, the Bay Area of San Francisco, it is difficult sometimes to keep some perspective on the local market, which has been on fire since the beginning of January 2012. This study by CoreLogic gives perspective at the national level: things have for sure improved enormously, but all is not over from the 2008-2009 crisis.
In the Bay Area, let's note that the inventory of homes (SFR + condos) for sale was about 1,700 after the first week of July, as compared to 1,872 a year ago. There are fewer homes for sale. It explains why property values have gone up so much in the past 12 months. Inventory was at 7,500 in May of 2008!
For the area that includes only Los Altos, Los Altos Hills, Mountain View, Palo Alto and Menlo Park, inventory stands right now at:
150 homes total for sale (both houses and condominiums and townhomes, called PUD's), vs
184 last year at the same period.
We still have a very low inventory.
Dealing in the local market place day in and day out, I can however note here that, overall in the County, the activity seems to slow down: I have noticed fewer multiple offers in general, and a slower price increase in many areas. Except for Palo Alto and all areas with the best schools, I can sense that it is a slower activity now, during July. This slow down can be the normal cycle, which slows down during the summer vacations (see my last graph-blog on the subject), or it could be a more general trend tied to the market in general. We'll see in September!
Thanks for reading!
Francis
Tuesday, July 22, 2014
ROI on home improvements?
How much do you recoup from home
improvements?
When home improvements offer the
most bang for your buck.
Source: CNBC
Remodeling is at its highest level since the spring of 2004, according to the National Association of Home Builders' Remodeling Market Index. One of the reasons is that it has been so difficult to move up or move down: once you sell your property, you are not sure you will be able to buy a replacement very soon. As a consequence, people remodel their house instead. How much will you get back from these expenses, when you sell?
Source: CNBC
Remodeling is at its highest level since the spring of 2004, according to the National Association of Home Builders' Remodeling Market Index. One of the reasons is that it has been so difficult to move up or move down: once you sell your property, you are not sure you will be able to buy a replacement very soon. As a consequence, people remodel their house instead. How much will you get back from these expenses, when you sell?
In general, home sellers cannot expect to recoup all their
remodeling costs when they sell their house. From the upgrades, one can expect
the average portion of costs being recouped at 66.1%
This is a question that clients ask me all the time, and one of
the best sources of information on the subject is the web site showing the “Cost Vs. Value”
report study. It shows, depending on the
area in the US, how much each project statistically gives back at the time of
sale.
Those projects that pay off the most are, according to the article from Kelli B. Grant of
CNBC:
-
Entry door replacement (steel):
96.6% recouped
-
Minor kitchen remodel:
82.7% recouped.
-
Window replacement (wood):
79.3%
Why would contractors who “flip” houses make money then, you might
ask? I believe it is because they start
from a house that does not show well, and therefore is going to sell at a
discount, and they have the cost-efficient means to improve on the house,
emphasizing those projects that show off the most for the best value. Examples of such improvements would be, as I
indicate to my clients when preparing for a sale:
-
Light fixtures,
-
Painting,
-
Retiling a shower enclosure,
-
Changing counter tops (but not necessarily all the cabinets, where
there is a lot more involved),
-
Floor refinishing,
-
Deep cleaning,
-
Staging.
All these projects have a fairly small, finite cost, while
improving immensely the look of the property to be sold.
Moreover, I believe that there are some areas like the Bay Area
where buyers are willing to pay top dollars for a remodel that has been done
already. Is it because people here are
too busy to undergo or direct a home remodel? Or they do not have the
patience? In any case, it has been my
experience that remodeling jobs in this area of the San Francisco Bay returns
more money than shown on the statistics of the cost vs value report.
Do you have an input on the subject? Please let me know.!
Thanks for reading.
Francis
Tuesday, July 8, 2014
Investing in real estate.
Investing in real estate -
I recently read an article from NewsGeni.us that I found
quite interesting, dealing with real estate investing.
Without repeating the whole article here I thought I would
comment on some of their points:
Their advice is:
Focus on promising
areas - the clientele in the SF Bay Area has been well served by believing
in the local area in the past 30 and 40 years.
5 years ago though a lot of people got scared and some sold, or did not
buy when they could have. For those who
bought when no one believed in it, I say “bravo”! However the Bay Area is just one choice,
mostly based on price appreciation, not return.
Indeed until very recently, the return on investment was not great -
purchase price very high, rental fairly low.
I personally chose another route: an area with very little
appreciation, but with traditionally good return . With the help of an investor mentor (thank
you Louis!), my family invested in real estate in Texas. There, the gross return was more like 10 to
11% per year, as opposed to ~3% in the Bay Area at the time. The area was promising because of the
job market, which had been very consistent, and strong. Since it continued to be strong, the rental
market stayed strong.
Never spend more than
you can afford - unless you buy cash, mortgages start to add up when you
purchase rental properties. You have to
count on a few set-backs, like damage due to weather, vacancies, repairs tied
to finding new tenants, etc… if you do
not have reserves, it can start becoming a stretch. Plan on a certain amount of unknowns, and I
would say, plan generally on costs being higher than they should be. (like insurance costs….).
All of the advice is well taken in this article called “When is the right time for investing in property?” . I would add another item: choose a good management company (if
you are going to invest away from where you live, or if you do not plan on
managing yourself). This is essential to
staying out of trouble, so-to-speak.
That company should be used to missed payments and how to deal with
them, and they should be well organized and standardized in their
procedures. Getting referrals or
testimonials is very important in my opinion.
If you are thinking about investing in real estate, share
your thoughts with me - I’d love to help you out with what I learned so far on the matter.
Thanks for reading,
Francis
Thursday, June 19, 2014
Emergency savings - Affordability challenges
One in Three adult Americans has no emergency savings.
According to this April 2014 article from HousingWire by Trey Garrison the housing industry will likely be impacted by the results of a new survey from NeighborWorks America, which serve as a stark reminder of affordability challenges. The survey found that almost 70 million working age Americans – about one-third – have no emergency savings. This highlights a primary problem facing potential homebuyers, as one in three homes are deemed unaffordable to the average buyer, and mortgage originations are reportedly at a 14-year low.
- Only 25 percent of American have enough saved to cover 30 days of living expenses.
- About one in five have enough savings to cover three months – about the average time of unemployment for many Americans – while 28 percent expect their emergency funds to cover a year.
- Approximately 29 percent of adult Americans have no emergency savings in place—whether to pay for the repair of a car that’s required to get to work, or fix a major household necessity such as a roof or furnace.
- Retirement and buying a home are the top savings goals at 28 percent and 13 percent, respectively.
- Just 5 percent of consumers say that they are currently saving to create a buffer in case of a financial emergency.
- 52 percent of people earning less
than $40,000 said that they had no reserve.
Thank you for reading,
Francis
Wednesday, June 4, 2014
Home sellers - Multiple offers.
Wondering how home sellers handled multiple offers in California, in 2013?
I thought this was a good piece of information:
Thank you for reading,
Francis
Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
I thought this was a good piece of information:
Thank you for reading,
Francis
Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
Wednesday, May 28, 2014
Moving in with parents - more common for the middle-aged.
Due to the effects of the sluggish economy, older people are quietly moving in
with their parents at twice the rate of their younger counterparts. The number
of Californians aged 50 to 64 who live in their parents' homes swelled 67.6
percent to about 194,000, according to the UCLA Center for Health Policy
Research and the Insight Center for Community Economic Development.
Readthe article from the LA times From Walter Hamilton (April 2014).
Thanks for reading - Do you like my blogs? Share them!
Francis
Silicon Valley real estate
Smart local statistics
Readthe article from the LA times From Walter Hamilton (April 2014).
Thanks for reading - Do you like my blogs? Share them!
Francis
Silicon Valley real estate
Smart local statistics
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