Market Update - Stephanie Witt's Blog on Marin County Real Estate

Real Estate Roundup: Bay Area Housing Markets Are Among the Nation’s Most Stable

Stephanie Witt - Monday, March 30, 2015

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious.

The Bay Area’s two largest metro areas are among the most stable housing markets in the country, thanks in part to our region’s prosperous economy.paintedladies

Freddie Mac’s most recent Multi-Indicator Market Index (MiMi), which analyzes data through January, ranks the San Jose region as the nation’s third most stable housing market, with an overalll score of 84.1. San Francisco ranked No. 5 for stability, with a score of 82.2. The MiMi scale ranges from zero to 200 — with 80 to 120 considered to be the stable range – and ranks regions based on purchase applications, payment-to-income-ratio, amount of owners current on their mortgages, and employment.

Both regions scored high marks for job markets: 103.7 in San Jose and 97.8 in San Francisco. Both also scored above 100 for payment-to-income ratios, though Freddie Mac notes that if that metric surpasses 120, prices could be rising too fast for a median-income household to afford a home.

Pending home sales in the Golden State saw the first double-digit annual increase in three years in February and also the largest gains since the housing crisis.

According to a recent report from the California Association of Realtors, pending home sales rose by 15.6 percent year over year in February, the largest annual increase since April 2009, which suggests that the pace of sales will pick up across the state in the coming months. Pending home sales in the Bay Area also saw double-digit-percentage upticks, increasing by 13.1 percent from one year ago.

The report also shows that distressed sales decreased from February 2014 in every Bay Area county but San Francisco, where they were unchanged at 4 percent. Eight of the nine Bay Area counties had a lower rate of distressed sales than the statewide average of 11 percent, with the exception of Solano County.

Inventory-starved Silicon Valley is facing another housing supply blow, as the U.S. Environmental Protection Agency may put the biggest waterfront development in the Bay Area since the 1960s on the chopping block.

The San Jose Mercury News reports that the EPA has stepped in and taken control of a 1,478-acre site in Redwood City, where Arizona-based developer DMB is planning to build 12,000 homes. Located east of Highway 101, the parcel is situated in a prime location along the San Francisco Bay between the headquarters of tech giants Oracle and Facebook.

At issue is whether the acreage is bound by the Clean Water Act or whether it is dry land that can indeed be developed. The article notes that the EPA is expected to enact more limits that would greatly hinder development on the parcel and will make a final decision by early 2016 at the latest.

With the busy spring real estate season in full swing, buyers are hitting the streets, but with inventory shortages persisting in regions such as the Bay Area, they are sure to face a swarm of competitors. To that end, the National Association of Realtors has offered some high-level insight into what buyers can do to increase their chances of success.

Citing an article at Learnvest, NAR’s blog post says that buyers should have all their ducks in a row before they hit the market, including having their financing preapproved. And although most home shoppers begin their search online, actually getting out and exploring neighborhoods can help them spot properties that have just come on the market.

Finally, a trusted real estate professional can offer buyers expert knowledge on individual communities and market conditions and help them navigate bidding wars, an inevitable fact of life in regions with limited home supplies.

(Photo: Flickr/Phil Gibbs)

Do You Want a Bigger Home? It Depends on Your Age.

Stephanie Witt - Saturday, March 14, 2015

Would you like your home to be bigger? Maybe another bedroom or bathroom, a larger kitchen or family room? You’re not alone.A hillside of homes in San Francisco's Bernal Heights neighborhood.

Fully 43 percent of Americans said they would prefer to be living in a bigger home than their current residence, according to a recent poll, while 16 percent would rather downsize and 40 percent are happy with the amount of space they currently have.

Those preferences change markedly, however, depending on age, according to a recent survey of 2,000 Americans by analysts at Trulia.

The poll results reflect a dynamic we’re seeing in the Bay Area.

Sixty percent of millennials — those ages 18 to 34 — said their ideal residence would be larger than where they live today, which makes sense considering that many millennials start their careers, and families, while living in cramped urban apartments. Only 13 percent said they’d rather have a smaller home than their existing one.

Baby boomers think differently, though the poll showed surprising results for this generation. Current talk suggests that boomers — ages 55 and higher — are fleeing their big, empty-nest homes, but the poll tells a more nuanced tale: 21 percent preferred a smaller home, but 26 percent were still looking for something bigger. Fifty-three percent, meanwhile, said they wouldn’t change a thing.

In between, both in age and preference, is Generation X. Among those aged 35 to 54, nearly a majority, 48 percent, said they would prefer a bigger home, with only 14 percent looking for something smaller.

Trulia analysts said that the Gen X results reflect that fact that homeowners in this age group bore the brunt of the recent housing crisis, and many were forced into smaller homes. Then again, Gen X households are also crowded with teenage children.

In the Bay Area, poll results are reflected in millennials living in urban rental units and condominiums in San Francisco and Oakland, with more families and older, more established residents in larger homes in suburban regions.

“Households must make tradeoffs between things like accessibility, amenities, and affordability when choosing what size homes to get,” Trulia noted in a summary of its poll results. “The ‘ideal’ sized home for most Americans may be larger than where they’re living now. But that spacious dream home may not practical.  As result, the mismatch between what Americans say they want and what best suits their circumstances may persist.”

(Photo: Flickr/James Gaither)

Americans’ Confidence in the Economy Hits Highest Level Since the Recession

Stephanie Witt - Thursday, March 12, 2015

U.S. citizens are currently more optimistic about the country’s economy — and their ability to obtain a mortgage — than at any point in at least the last five years, sentiments that should help propel the housing market as the year progresses.green_up_arrow

Fannie Mae’s February 2015 National Housing Survey found that 47 percent of respondents believe the economy is moving in the right direction, up 3 percent from the previous month and the highest in the survey’s five-year history. The number of Americans who think the economy is on the wrong track dropped to 45 percent, an all-time survey low.

“Continuing improvements in consumer attitudes in this month’s National Housing Survey lend support to our expectation that 2015 will be a year of the economy dragging housing upward,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a statement accompanying the poll results. “The share of consumers who think the economy is on the right track rose to a record high since the inception of the survey nearly five years ago and for the first time exceeded the share who believe it’s on the wrong track.”

Respondents also expressed confidence in their ability to get a mortgage, with 54 percent saying it would be easy to do so – a survey high – and 43 percent saying it would be difficult – a survey low.

But more Americans than not are convinced that mortgage rates will increase over the course of the next 12 months, with 48 percent of consumers predicting a rise. By comparison, 40 percent of respondents think mortgage rates will hold steady while only 6 percent believe they will drop.

And most economists agree that it is only matter of time before mortgage rates begin to head north. Even though rates for 30-year, fixed-rate mortgages dropped to 3.75 percent for the week ending March 5, many observers believe that February’s strong U.S. employment report will spur the Federal Reserve to enact hikes beginning in June, according to Reuters.

As for how much mortgage rates will rise in 2015, projections vary. Both’s Chief Economist Jonathan Smoke and economists at Freddie Mac believe that interest rates could climb to 5 percent by the end of the year. As of Feb. 9, economists at John Burns Real Estate Consulting project mortgage rates to increase to 4 percent in 2015 and gradually rise over the next three years.

(Photo: Flickr/Christina Welch)

March Is a Busy Month for Buyers and Sellers. Are You Ready?

Stephanie Witt - Saturday, March 07, 2015

Illustration of a person in front of a for-sale signAre you ready for the springtime real estate rush?

March is one of the busiest months of the year for Northern California homebuyers and sellers, as winter recedes and families start making plans for the future. Whether you’re looking for a new home or preparing to put yours on the market, it’s important that you’re ready for busy times ahead.


Homebuyers in Pacific Union’s Bay Area and Lake Tahoe/Truckee regions aren’t likely to face the frenzied competition that marked our real estate markets in recent years, but multiple offers are still routine for attractive properties.

In order to give your bid a fighting chance, you must have your paperwork ready and financing in place. Most importantly, determine how much of a down payment you can afford and how much you can spend on monthly mortgage payments.

Make notes about the features that are important to you in a new home, and do  homework on the neighborhoods that most interest you. Your real estate professional has a wealth of knowledge about local communities, including schools and nearby amenities, as well as the inside story on local homes on the market.


A thorough spring cleaning takes on added significance when you’re preparing your home for sale. You want the house and surrounding property to shine like never before in order to quickly attract the best possible offer.

Washing windows and walls isn’t enough. Replace missing light bulbs and worn fixtures, paint dingy surfaces, and replace worn carpeting. (Some real estate professionals say painting and new carpeting are the cheapest improvements with the biggest payback.)

Get rid of clutter in your home. Prospective buyers love to open cabinets and closets, and sparsely filled storage spaces look bigger than those that are packed full. Consider renting a storage unit for items that aren’t essential to your daily life.

Some sellers keep family photos on the walls and personal mementos and heirlooms on display, thinking they help make a house look homey. But real estate professionals will tell you they’re a turn-off for buyers, who want to imagine their own belongings in place — not yours. Take them down.

Outside, the same rules of fixing and cleaning apply. Prune trees and bushes, rake the yard, and add mulch to flower beds. Perhaps the home’s exterior doesn’t need a new coat of paint, but a few hours with a power washer could make a world of a difference.

Lastly, but perhaps most importantly, sellers should determine how much money they need to get out of their home and set the sales price accordingly. Pricing is a delicate matter, though, and includes outside forces such as neighborhood dynamics and the local economy. Your real estate professional can tell you more about such matters, including pricing data for comparable homes nearby.

Spring is always an exciting season. Good luck with your real estate adventure!

(Image: Flickr/Scott Maxwell)

Bay Area Projected to Lead U.S. for Multifamily Housing Income Growth in 2015

Stephanie Witt - Wednesday, March 04, 2015

Multifamily property owners in major Bay Area regions can expect to see the largest gross effective income gains in the U.S. this year, thanks in part to a robust job market and limited supply, says a new report from Freddie Mac.hundreds

According to the company’s 2015 Multifamily Outlook, gross effective income for multifamily properties in the San Francisco metro area will increase by 4.9 percent this year, the largest projected gains of the top 70 metro areas in the country. The Oakland metro area ranks No. 2 on the list, with multifamily property income expected to grow by 4.2 percent. The San Jose metro area ties for fourth-highest projected multifamily property income gains in the country – 3.9 percent.

Rents in all three metro areas are expected to grow faster this year than their historical averages between 2000 and 2007, according to a chart accompanying the outlook. The Bay Area should also have fewer multifamily vacancies than the projected U.S. average of 4.8 percent. Freddie Mac forecasts 2015’s vacancy rate will be 3.0 percent in San Francisco and 3.2 percent in Oakland and San Jose.

Freddie Mac identifies Oakland as one of the seven U.S. metro areas hit hardest during the recession and takes a closer look at the factors shaping the region’s multifamily housing market.

Oakland is one of three hardest-hit markets to regain all the jobs lost during the last economic crisis, according to Freddie Mac. Booming economic growth in San Francisco and San Jose will also help fuel demand and keep vacancy rates low.

“Much of the demand for housing in Oakland is coming from the thriving economies of neighboring San Francisco and San Jose,” Freddie Mac wrote. “As residents are being priced out of these Bay Area cities, people are moving to Oakland for more affordable housing. This will keep rent growth elevated and vacancies low, even as new supply comes online.”

Freddie Mac says that multifamily property owners in Oakland can expect rent-price growth to taper off in 2015 as more units reach the market, characterizing current construction activity in the region as “moderate.” The company also notes that San Jose had one of the highest levels of multifamily housing starts in the country in 2014.

(Photo: Flickr/401 (K) 2012)

Real Estate Roundup: Bay Area Distressed Sales Rise in January

Stephanie Witt - Tuesday, March 03, 2015

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:

The number of distressed sales increased across much of the Bay Area from December to January, but all counties have a lower rate than they did one year ago.foreclosure_Scrabble

According to the California Association of Realtors’ January pending sales report, distressed sales of single-family homes increased from the previous month in every Bay Area county except San Mateo, where they held steady at 2 percent (the organization does not include data for San Francisco County). Elsewhere across the region, distressed-sales rates ranged from 4 percent in Santa Clara County to 15 percent in Napa and Solano counties. In January 2014, six of the nine Bay Area counties had double-digit-percent distressed-sales rates.

The local increase mirrored an uptick in statewide distressed sales, which rose from 10 percent in December to 12 percent in January. One year ago, 16 percent of home sales in California involved distressed properties.

Sky-high rents in traditionally pricey places like the Bay Area “are almost a given at this point,” says a recent report from Zillow, and they are only zooming upward, further taxing would-be homebuyers who hope to save for a down payment.

Zillow’s latest Rent Index says that rents in the San Francisco metropolitan area increased by 14.9 percent on an annual basis in January, the largest gains in the country. Rents in the San Jose region rose by 13.4 percent in the same time frame, No. 2 in the country. Nationwide, rents increased by 3.3 percent in January, which the company says is in line with historically normal levels.

But there’s a catch: Since 2000, rent prices have grown at nearly twice the rate of wages, meaning that Americans have been putting away less money aside for a down payment. Zillow notes that this trend is particularly worrisome given that buying a home is currently more affordable than ever when compared with renting.

Even in a city where jaw-dropping real estate prices are the norm, some numbers leap off the page.

Enter a 15,000-square-foot condo at the under-construction Lumina high-rise in San Francisco’s South Beach neighborhood, which will list for $49 million, according to an article in The Wall Street Journal. Located at the intersection of Main and Folsom streets – one block away from Google’s San Francisco office – the unit could set a residential real estate price record in the city, no small feat.

Located on the 41st and 42nd floors of the skyscaper, the five-bedroom penthouse features two kitchens, eight terraces, and a private rooftop deck. Whoever the deep-pocketed buyer ends up being — the publication speculates that a high-ranking tech executive will be involved — he or she will enjoy commanding views of downtown San Francisco and the Bay Bridge through the unit’s large, curving glass walls.

Continued improvement in the U.S. job market and income levels will help propel the housing recovery in 2015, Fannie Mae predicts in a recent report.

“Our forecast calls for a number of factors, including strong hiring and income growth, stabilized housing affordability, and modestly easing lending standards, to translate into improving housing demand throughout the year,” Fannie Mae Chief Economist Doug Duncan said in a statement. “We expect total home sales to increase by approximately 6.0 percent for 2015, with total single-family mortgage production climbing to approximately $1.2 trillion.”

Fannie Mae says that it expects the national economy to expand by 2.9 percent this year, up from 2.5 percent growth in 2014.

(Photo: Flickr/Simon Cunningham)

Pacific Union Launches Leading-Edge, Mobile-Optimized Website

Stephanie Witt - Saturday, February 28, 2015

Pacific Union is excited to share the news that we’ve just launched a brand-new website optimized for use on mobile devices, one more way we’re committed to delivering the most extraordinary level of service to our elite team of Northern California real estate professionals and their valued clients.pac_union_mobile_site

Developed in partnership with Boston Logic Technology Partners Inc., Epsilon Data Management, and 1000watt, the completely revamped website comes as a response to the growing number of Pacific Union clients that are using their smartphones to search for a Bay Area home and research local communities. As of early this year, nearly one-third of our website visitors originate from a smartphone or a tablet device, and we recognize the importance of giving them the best experience possible.

“We know that our clients are migrating from searching for real estate on their desktop computers to tablets and now to mobile devices,” Pacific Union CEO Mark A. McLaughlin said. “With our new website, optimized for the mobile experience, our clients have up-to-the-minute information about listings and market conditions on the go. This latest evolution underscores Pacific Union’s dedication to leverage the latest technology to provide our real estate professionals and their clients with the highest level of service.”

The new website also boasts a significantly enhanced visual appearance and user interface, making it easier than ever for Pacific Union clients to access current property listings, keep up to date on sales trends, read our expert local content, and contact one of our expert real estate professionals. Bay Area homebuyers can visit our website to access MLS sales data for 130-plus local communities — updated daily — as well as neighborhood-level content that offers insight into what life in a particular community is like.

The website launch comes two years after Pacific Union unveiled our Digital Listing Presentation (DLP), a first-of-its-kind, custom Web and iPad application that enables our real estate professionals to easily create property presentations that homebuyers and sellers can browse on a tablet computer. In April 2014, the Web Marketing Association named our DLP as Best Real Estate Interactive Application.

Why Do Households Move? Location, Location, Location.

Stephanie Witt - Saturday, February 28, 2015

When it’s time to pull up stakes and move, the location of the new home is as important as the property itself. And maybe even more important. That’s one of the chief conclusions of a recent survey of 10,000 U.S. households.Map of Bay Area

Fully 47 percent of households believe that location is more important than the physical home, according to the survey, while 20 percent disagreed and 33 percent said neither factor plays a role.

Here’s another statistic: 75 percent of households cited location-related reasons for their decision to move. The No. 1 reason for moving: a safer neighborhood (30 percent), followed by being closer to family (27 percent), a change of climate (26 percent), being closer to work (25 percent), and moving for a new job (23 percent).

The survey was conducted by the Demand Institute, a joint effort of The Conference Board and Nielsen. The group said in a statement that it sought to learn what’s important to households “as part of a broader effort to understand where future home and community demand is headed. We learned that location still matters — but in radically different ways to different people.”

Other conclusions:

  • Most movers will stay in state (74 percent), with 59 percent planning to move within 30 miles of their current home.
  • For those seeking a change of climate, Western states remain their top destination — good news for the Bay Area!
  • After selecting a desirable location, households identified the following characteristics as most important: amenities/services within walking distance (39 percent), a good school district (34 percent), close to work (32 percent), a diverse neighborhood (26 percent), and near public transit (25 percent).
  • Speaking of walking, the survey found that walkable communities report stronger expected home price growth (63 percent), compared with less-walkable communities (52 percent), and are also more likely to report that their quality of life has improved in the past few year 34 percent and 18 percent, respectively).
  • And one final number: Metropolitan areas — including both urban and suburban neighborhoods — continue to grow, as rural communities shrink. From 1990 to 2014, the U.S. population living in a metropolitan area rose 6 percent to an all-time high of 84 percent.

(Image: Flickr/Soozums)

Bay Area Home Affordability Unchanged in Q4: Still California’s Lowest

Stephanie Witt - Thursday, February 19, 2015

The number of residents across the nine-county Bay Area who could afford a home purchase remained static as 2014 ended, though some individual regions did see modest improvements from the previous quarter.hammer_bank

The California Association of Realtors’ fourth-quarter Housing Affordability Index says that 21 percent of Bay Area residents meet the minimum $150,420 income needed to purchase the median-priced $742,880 single-family home, unchanged from the third quarter. One year ago, 23 percent of Bay Area residents could afford to buy a home.

Across California, the median-priced $452,140 single-family home was in reach of 31 percent of homebuyers, CAR says, 1 percent more than in the third quarter but 1 percent less than a year earlier. Nationwide, the median home price is $208,700, and 59 percent of the population can afford a home.

Five of nine Bay Area counties showed quarter-over-quarter affordability improvements, led by Contra Costa County, where 23 percent of the population could afford a home, up from 19 percent in the third quarter. Affordability increases were also recorded in Solano (up to 50 percent), Napa (24 percent), Santa Clara (22 percent), and Alameda (20 percent) counties.

Affordability was unchanged from the previous quarter in Marin, San Mateo, and Sonoma counties. San Francisco was one of just three California counties where affordability decreased, quarter over quarter, dropping to 14 percent, the lowest in the state and a result of price escalation, CAR says. Marin and San Mateo counties tied for second least affordable in the state, with 15 percent of residents able to meet minimum-income requirements.

On an annual basis, affordability declined in each of the individual nine counties, ranging from 6 percent in Solano County to 1 percent in Contra Costa, San Mateo, Santa Clara, and Sonoma counties.

Marin and San Mateo were the only two California counties where the fourth-quarter median sales price for a single-family home exceeded $1 million and the minimum qualifying income was more than $200,000. Buyers in San Mateo County can expect to shell out $5,320 on a monthly mortgage payment  — including taxes and insurance — while their Marin County counterparts would cut a $5,110 check each month.

San Francisco was the state’s third priciest county in the fourth quarter ($962,390 median price, for a monthly payment of $4,870), followed by Santa Clara County at No. 4 ($850,000 median price and a monthly payment of $4,330) and Alameda County at No. 5 ($703,370 median price and a monthly payment of $3,560).

Solano was the only Bay Area County where a homebuyer could earn less than a six-figure salary and expect to meet income qualifications.

(Photo: Flickr/Jacob Edward)

How do you say 'pied-à-terre' in Chinese?

Stephanie Witt - Tuesday, February 10, 2015

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