Top 10 Cities for Projected Job Growth.

Where the jobs are...

As Realtors we know how important a role a robust job market plays in driving home sales.  So which big cities feature the strongest job markets?

Forbes magazine ranked the top big cities for projected job growth in 2014 based on several factors:
- current growth of employment rates,
- mid-term growth (the average annual rate from 2008-2013);
- long-term trends;
- and a 10-year average.

Three of the top-ranking cities are in Texas, while two are in California.

Top 10 cities:

1- San Jose-Sunnyvale-Santa Clara, California,
2- San Francisco-San Mateo-Redwood City, California,
3- Austin-Round Rock-San Marcos, Texas,
4- Raleigh-Cary, North Carolina,
5- Houston-Sugar Land-Baytown, Texas,
6- Nashville-Davidson-Murfreesboro-Franklin, Tennessee,
7- New York City, New York
8- Orlando-Kissimmee-Sanford, Florida,
9- Dallas-Plano-Irving, Texas,
10- Denver-Aurora-Broomfield, Colorado.

Thank you for reading!
Francis

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates

Our next E-Waste & Shredding event is on:
Sat. Oct 25, 9am - 2pm (or until truck is full)
at: 161 S. San Antonio Rd
Los Altos, CA

Student loans causing housing shift...

An analysis by the Federal Reserve Bank of New York found that for the first time in at least a decade, households with student-loan debt are less likely to have a mortgage than those without student-loan debt.

Additionally, a survey by the National Association of Realtors found that 49% of Americans reported that student loan debt is a "huge obstacle" to homeownership.

I had already blogged in July of last year about student loans and the general concerns this is causing for the housing market; the average pay-off time for a student loan is 21 years! 
This is also the subject of an article just published in the SJ Merc. on Sept. 23 2014, indicating: a "consultant's study says 8% fewer houses sold in the U.S." (as a result of student debt levels).
The Consultant is John burns Consulting, an Irvine-based firm that advises homebuilders. The article is from Tim Logan of the Los Angeles Times.

Thanks for reading!
Francis


Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
Our next E-Waste & Shredding event is on:
Sat. Oct 25, from 9am to 2pm (or until truck is full)

at: 161 S. San Antonio Rd
Los Altos, CA

Real estate investors homework .. Where to buy?

Many of my clients have invested in real estate to balance their investment portfolio, as I have done myself.  To piggy up on my last blog on the subject dating back to July (Investing in real estate), when people contact me with this goal in mind, their first question is: where should I invest?

Indeed, this is the first step: decide what should be your main goal with your real estate investing.  Is it to maximize appreciation, or is it to maximize returns?  Typically, where there is appreciation, the return on investment (ROI) is lower, and vice-versa, where there is a large return, appreciation is lower.  There are so many areas in the US to choose from...  and it would take a long time to go and visit each place of interest, and compare.

The Bay Area has always been expensive, and by the time you have purchased a condominium or a house, you have spent so much money that the return after finding a tenant is going to be around 3% to 4% maximum in the best case.   - Although for those who have bought before 2012, their return has gone up quite a bit due to the extreme increase in rents that we have seen since then: what used to rent for about $1900 about 5 years ago now fetches easily around $2,800, and even $3,000.

In Texas in the area of Dallas-Fort Worth one may buy a 4-bedroom house in a pretty nice neighborhood for say, around $150 to $160K, and the monthly rent is going to be around $1400.  With these kinds of figures, the return jumps to 10 or 11% very easily.

So where should one go?

I came across an interesting web site offering a lot of property management resources: http://www.allpropertymanagement.com/
and they have already done a lot of the research, by tracking a number of different metrics, from rental vacancy rates and home values to regional job growth, for 75 different metro areas in 5 regions of the country. They use that data, along with input from their nationwide network of over 5,000 property managers, to produce their quarterly Rental Ranking report, which measures a city’s attractiveness for real estate investment. 
Here is a link to their "All Property Management Q2 2014 Rental Ranking Report".   According to the data, San Jose is the second-strongest rental investment market in the West Region, and the fifth-best in the nation.

Finding the right place to invest also depends on where you live: sometimes, closer to you is better because you can manage the properties yourself, which can have huge implications for taxes, and also for the maintenance costs.

Once you have found you path, let me know: I can help you purchase the better property, or properties.  Whether it is in my backyard (including San Jose) or not, I can help you personally or I can find you the right agent through my network.  And should you end up in Dallas, I can also recommend a great management company there.

Thanks for reading,
Francis


Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates

Know your insurance before remodeling.

Property insurance is not a very exciting subject to be sure.  I just read this blog from a local insurance company, Allied Brokers Inc., well known for their involvement in real estate insurance

here in the San Francisco Mid-Peninsula area.

The article covers the insurance issues that can pop up when you have a remodeling project that encounters problems; things are not always covered as you thought they were, and it is a good idea to check up on your insurance coverage with your insurer before starting any remodeling.

Checking also whether your contractor has any insurance, along with his/her sub-contractors if there are any, is essential, and you may also want to add yourself to the Contractor's policy.

More on this important subject in this Allied Brokers Inc. article.

Thanks for reading,
Francis

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates

Average prices in the SF Bay local Counties - evolution.

To piggy back on an earlier blog of mine, dating back to January of this year, here is an update to the graphs showing the increase in average prices in both the counties of Santa Clara and San Mateo; the figures include both the houses and the condominiums/townhouses.

As always, one has to be careful with statistics: a few very high priced homes can skew the average to a high number, even though nothing much else has happened in the market place.

A few things to note:
- In general, average prices go down at the end of the year and until January.  Last year was shielded in large part from this phenomenon: prices went down, but not much.  We will see if this year acts more "normal".
- The total number of homes (houses and condos) for sale last year at the end of August was 1,852 in the Cnty of Santa Clara, and it is now 1,778  - a little lower.  Still a lack of inventory ...
- Prices were an average of $715.7K in the County of Santa Clara in Jan of 2013, and they are now $992.5K, a 38.7% increase !
- From the graphs below, it seems that averages move faster up and down in the County of San Mateo than in the County of Santa Clara.  I believe it reflects the fact that a lot more properties went into the averages in SCC than in SM Cnty: 25,705 listings for Santa Clara County, vs 10,619 for San Mateo County.  The more properties you have, and the more the averages are going to be representative of the real market, instead of the specifics of the homes.  To say it simply, if you have a few very high properties, they will have less of an effect on the average of 25,000 sales vs the average of 10,000 sales.

One final note: the inventory of homes for sale in January of 2014 was around 900, about half of what it is now.  So it is a better time to look for a home!  Also, many trades linked to real estate, like property inspection services, termite companies, stagers, report being extremely busy right now (beg. of Sept.).  This could mean that inventory may increase soon...

County of Santa Clara:

County of San Mateo:

 

 

Thank you for reading,

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.

Bay Area home prices leveling off.

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.

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

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!

Francis

Silicon Valley real estate

Trends: Local prices and graphs.
A noteworthy local non-profit event:  Coalition on Homelessness, SF