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

Real Estate Roundup: California Home Prices Still Well Short of Peaks

Stephanie Witt - Tuesday, July 08, 2014

July 7, 2014 by Pacific Union

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

CALIFORNIA ANNUAL HOME PRICE GAINS ARE SECOND LARGEST IN U.S.
Despite posting the second-largest annual home price increase in the country in May, California’s real estate market is still further from its all-time high than the U.S. as a whole.Cal_map_promo

According to CoreLogic’s latest Home Price Index Report, California single-family home prices rose 13.1 percent year over year in May, second only to Hawaii and about 4 percent more than the national average.

The report notes that half of U.S. states are now within 10 percent of their historical peaks, but California isn’t one of them.

CoreLogic’s index places the state’s current home price – including distressed sales – at 15.9 percent below the May 2006 all-time high.  Across the country, home prices were 13.5 below their record highs, also set in the spring of 2006.


U.S. PENDING HOME SALES GROWTH HIGHEST IN FOUR YEARS
In what looks to be a promising sign for the second half of the year, pending home sales across the country saw their largest month-over-month gains since April 2010.

The National Association of Realtors Pending Homes Sales Index jumped 6.1 percent from April to May but was down 5.2 percent on an annual basis. Pending sales in Western states grew 7.6 percent month over month, also below levels recorded last May.

NAR Chief Economist Lawrence Yun said that while low mortgage rates, an increase in inventory, and a favorable job market will help spur home sales for the rest of the year, 2014 totals are not expected to match those from 2013.


LOCALS, MILLENNIALS, INVESTORS ALL DRIVING LUXURY-HOME SALES
Luxury home sales are up across the globe, with three types of buyers fueling the growth, Christie’s International Real Estate CEO Bonnie Stone Sellers recently told The New York Times.

International investors are perhaps the best-known type of luxury buyer, and they typically purchase properties as a safe haven for their money. Millennials, particularly those flush with cash from the tech boom, are also helping drive luxury sales, Sellers said.

But local buyers play perhaps the biggest role in the world’s luxury real estate market, Sellers told the newspaper.

“The locals were on the sidelines during the recession and they’ve now come back with their pent-up demand and they’re fueling the growth of the lowest end of the luxury market — $1 million to $5 million — because finances are available and they have confidence,” she said.

(Image: Flickr/Photologue_np)

From the Marin IJ: Marin median home price surges past $1 million mark, highest in the Bay Area

Stephanie Witt - Monday, June 30, 2014

By Janis Mara

jmara@marinij.com @jmara on Twitter

County surpasses SF; highest in Bay Area

The median price of a single-family home in Marin crossed the million-dollar mark and now stands at $1.03 million, surpassing San Francisco's median of $1,001,500, according to real estate information service DataQuick....(READ MORE)

SOLD: 140

Stephanie Witt - Friday, June 13, 2014


140 Terrace Ave, San Rafael CA 

Displaying all the bells and whistles one would expect from a NEW home this Craftsman like custom built house defines itself with a formal entry, a living room and fireplace, kitchen/family room, formal dining area, four en suite bedrooms and one half bath! If that were not enough, there is a separate bonus room to use as a home gym, home office, media room or playroom for projects. The wine cellar is ready to be outfitted for the best and brightest wine collection. 

 SOLD FOR $1,340,000

How Close Are Bay Area Home Prices to Precrisis Peaks?

Stephanie Witt - Friday, June 13, 2014

June 12, 2014 by Pacific Union

While April median home prices across California and the Bay Area returned to levels not seen since late 2007, they remain well short of prerecession peaks.money fence_sm

But a different story emerges when comparing historical and recent median prices in our individual Bay Area counties. Indeed, some counties have actually surpassed their precrisis price highs, others are nearly there, and still others have a longer road to recovery.

Whether you’re buying or selling a home in the Bay Area, staying informed on both current and past prices can help you decide when to act. Here’s an analysis, based on California Association of Realtors data, that compares April median single-family home prices across Bay Area counties with their historical highs.

Alameda County – At $718,580 the median price in Alameda County is just 0.5 percent short of its all-time high. The Alameda County median peaked in May 2007 at $722,044.

Contra Costa County – Housing prices in Contra Costa County have been rising steadily since January and reached $755,950 in April. The current median price is 18 percent lower than it was in June 2006, when it topped out at $923,855.

Marin County – Marin is one of just two Bay Area counties where the median home price was higher than the $1 million mark in April. Still, at $1,007,580, the current median is 12 percent below its historical high of $1,149,390, set in June of 2007.

Napa County – The median price in Napa County declined from March to April to land at $523, 150. In August 2006, prices in the county hit $729,166, 28 percent above current levels.

San Francisco County – San Francisco home prices actually reached all-time highs in February 2014 but have since slightly cooled to $940,570. San Francisco is one of two local markets where prices have now surpassed their prerecession highs, currently 0.9 percent higher than they were in May 2007.

San Mateo County – San Mateo County bested its previous peak median in March before falling to $1,001,000 in April. The county median is now 2 percent below its October 2007 precrisis pinnacle of $1,020,000.

Santa Clara County – The median price in Santa Clara County reached $900,000 for the first time ever in April, buoying the market 5 percent above its previous all-time high of $865,000, achieved in October 2007.

Solano County – Despite steady growth over the past three months, the median home price in Solano County  — $315,150 in April — is still 36 percent less than its historical peak of $492,799, set in June 2006.

Sonoma County – Sonoma County prices have been hovering in the mid- to high-$400,000 range for the past year and closed April at $475,260. Home prices in the county were 27 percent below their January 2006 highs of $650,326.

(Photo: Flickr/Tax Credits)

Strong Economy Keeps Bay Area Home Prices Climbing, Bucking U.S. Trend

Stephanie Witt - Thursday, June 05, 2014
June 5, 2014 by Pacific Union

Real estate analysts expect the rise in home prices to slow down over the next two years as U.S. housing markets return to a state of equilibrium, but the Bay Area may prove to be an exception.

Gold coinsIn a recent survey by Reuters, real estate analysts predicted that U.S. home prices would rise 7.5 percent this year and then slow to 4 percent gains by 2016 — a sharp decline from the double-digit increases reported last year.

The 31 analysts surveyed by Reuters said price increases would slow in the coming months because of strict lending standards, slow wage growth, and a lack of first-time buyers. But while lending standards have indeed tightened in the Bay Area in recent years, income growth remains strong and first-time buyers continue to keep our real estate markets active.

While the rest of the country struggles with a lackluster economic recovery, the Bay Area is charging ahead with explosive growth in tech-related jobs and continued expansion of tourism and export-related businesses. In fact, three counties in the region are, statistically, at full employment, with others close behind.

Tech-industry hiring, meanwhile, has raised the average take-home pay in the region and encouraged a steady stream of young first-time buyers, helping to push home prices even higher.

California home prices jumped 15.6 percent in April year over year, according to a CoreLogic report released earlier this week, while other regions of the country saw more moderate growth. And the forecast calls for more of the same.

The U.S. housing market “is improving slowly, which is good,” Mark Goldman, a real estate expert at San Diego State University, told Reuters. “It should be measured. We don’t want to go back to stupid money,”  Goldman said, a reference to the beginning of the Great Recession, when subprime lending helped push home prices to unsustainable heights.

Now, he said, “we are seeing a state of equilibrium. I don’t see any symptoms that would cause housing prices to go up or down significantly.”

(Image: Flickr/Bhautikjoshi) 


No Bubble in Sight Even as Chinese Buyers Help Fuel Bay Area Real Estate Prices

Stephanie Witt - Wednesday, June 04, 2014
June 4, 2014 by Pacific Union

All-cash purchases and international investors are helping drive Bay Area real estate prices to stratospheric levels, but current conditions don’t indicate a looming bubble, Pacific Union CEO Mark A. McLaughlin said in a recently televised interview.MarkMcLaughlin_small

“This is not a bubble,” McLaughlin told San Francisco TV station KPIX in a June 1 interview. “I think that the dynamics of the San Francisco Bay Area are very, very solid.” McLaughlin pointed to the Bay Area’s “fantastic job market” as a major factor driving price appreciation.

Although liquidity created by the current tech-industry boom — particularly in San Francisco and Silicon Valley – is certainly pushing Bay Area home prices higher, international buyers and a pronounced lack of inventory are also propelling our local real estate markets.

McLaughlin told KPIX that Chinese buyers have been especially active in the Bay Area of late, citing educational opportunities and lifestyle change as two reasons the demographic targets the region. He estimates that about half of Chinese buyers are currently living in the Bay Area and noted that their investments will likely continue to push prices upward.

“It’s added a demographic of buyers who generally take a long-term view,” McLaughlin said. “They’re not sellers in the next five to seven years. So it is going to drive housing prices up.”

According to the Hurun Global Rich List 2014, China is home to 358 billionaires, second only to the U.S. In response to demand from Chinese investors, Pacific Union has launched a unique China Concierge program, which offers clients in mainland China a single point of contact to help them buy investment properties in Northern California and parts of Nevada. The initiative includes a Mandarin-language website hosted in China.

In December, McLaughlin was just one of 10 American executives to receive an exclusive invite to the U.S. Embassy in Beijing, where he met with some of China’s wealthiest individuals to discuss U.S. real estate investment opportunities.

While Chinese investors are helping to drive up Bay Area real estate appreciation, a slim supply of inventory is also causing prices to rise.

“Demand has just completely outstripped supply of inventory in many of our markets,” McLaughlin said.

So what can hopeful local buyers do to compete in a market increasingly populated with wealthy foreign investors flush with cash? McLaughlin suggests buyers get their financing approved as early as possible and be ready to act as soon as they see a home that interests them.

Wealthy foreign investors aside, McLaughlin believes that the Bay Area’s natural beauty and inherent attractiveness are perhaps the main reason home prices here are skyrocketing.

“It’s not specifically driven by foreign capital,” he said. “It’s driven by [the fact that this is] a very desirable place to live.”


Bay Area Leads U.S. in 2014 Luxury-Home Sales Growth

Stephanie Witt - Tuesday, June 03, 2014
June 3, 2014 by Pacific Union

Last month we crunched the numbers and found that luxury-home sales volumes grew by double-digit percentage points in the first quarter across Pacific Union’s nine Northern California regions. Now, a report from Redfin shows that three Bay Area regions are leading the nation in high-end home sales growth this year.

Redfin’s 2014 Luxury Report, which defines luxury homes as those in the most expensive 1 percent of properties, ranks Oakland as the top U.S. market for luxury sales-volume growth through April, with a gain of 96.2 percent. San Jose placed No. 2, with luxury sales increases of 91.2 percent, followed by San Francisco, at 72.2 percent. Across all of the U.S. metro areas included in the study, high-end home sales were up 21.1 percent in the first four months of 2014.

Luxury sales gains in the Bay Area were even more impressive given the flat to negative growth observed in the remaining 99 percent of the market. Nonluxury sales increased by 2.2 percent in Oakland through April, while declining by 1.9 percent in San Francisco and 7.3 percent in San Jose.

Redfin’s study also found that San Francisco had the most expensive luxury-home prices in the country. San Francisco buyers would need to shell out $5.35 million to afford the minimum-priced luxury home — not to mention earn $916,000 per year. That translates to a monthly mortgage payment of more than $21,000, assuming a 30-year, fixed-rate loan.

San Jose ranked fourth in the country for highest minimum luxury-home price: $3.38 million. With a minimum price of $2.1 million, Oakland just missed the top 10 but still bested the national average of $1.66 million.

San Francisco and San Jose also placed among the top 10 markets with the highest percentage of all-cash luxury sales, 55.7 and 48.8 percent respectively.

So in which Bay Area neighborhoods can buyers expect to pay the most for a top-end home? In San Francisco, tony Presidio Heights — where the average luxury home costs $7.5 million – leads the pack. Two other San Francisco neighborhoods also ranked among the 10 priciest luxury enclaves in the U.S.: Pacific Heights ($7.2 million) and Russian Hill ($6.5 million).

In the San Jose region, Old Palo Alto is the most expensive luxury neighborhood, with the average home commanding $4.7 million. Unsurprisingly, real estate classified ads website operator Movoto just named Palo Alto the second wealthiest small city in the U.S.

Meanwhile, the small city of Piedmont boasted the largest luxury prices in the Oakland metro area, at $2.6 million.


San Francisco Area Home Price Gains Still Strong But Show Signs of Cooling

Stephanie Witt - Thursday, May 29, 2014
May 28, 2014 by Pacific Union

Monthly home price appreciation in the San Francisco metro area was the largest in the U.S. in March, though long-term gains appear to be moderating, according to the just-released S&P/Case-Shiller Home Price Indices.BayBridge

Of the major metro regions included in Case-Shiller’s 20-city composite index, 19 showed positive price increases from February to March. Prices were up 12.4 percent across the country on an annual basis, with every market posting year-over-year increases.

Nonetheless, year-over-year price gains across the 20-city composite have slowed each month since November 2013.

San Francisco prices grew by 2.4 percent from February to March, the highest rate of monthly appreciation in the U.S. and nearly triple the national average. As has been the case for the past year, annual price gains topped 20 percent but were at their lowest levels (20.9 percent) since February 2013.

According to David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, annual price growth is showing signs of slowing down in some of the country’s hottest housing markets, particularly those in the western U.S.

“The year-over-year changes suggest that prices are rising more slowly,” Blitzer said in a statement. “Among those markets seeing substantial slowdowns in price gains were some of the leading boom-bust markets including Las Vegas, Los Angeles, Phoenix, San Francisco and Tampa.”

A look at March MLS data as of May 27 turns up annual single-family home price gains in all of Pacific Union’s eight regions, with seven of them posting double-digit percentage increases.

Price appreciation was most vigorous in Wine Country, with year-over-year gains of 42 percent in our Sonoma Valley region. In Napa County home prices grew by 35 percent, while they increased 21.5 percent in Sonoma County.

Silicon Valley homes continue to command the most of any of our Bay Area regions, with the median price surpassing the $2.5 million mark, 21 percent above what it was last March.

 

March14_CaseShiller.png


Real Estate Roundup: Bay Area Home Sales Bloom in April

Stephanie Witt - Wednesday, May 28, 2014
May 27, 2014 by Pacific Union

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

SAN JOSE, SAN FRANCISCO SEE LARGEST MONTHLY SALES VOLUME GAINS IN U.S.
Buyers came out of winter hibernation across the country in April, particularly in San Jose and San Francisco, which led the U.S. in month-over-month sales-volume gains.blooming_Flower

According to a recent Redfin report, home sales volumes increased from the previous month in all 30 U.S. markets included in the study. Across those combined regions, sales volume grew by an average of 12.4 percent from March.

The company says 1,465 homes in the San Jose area sold in April, a monthly gain of 26 percent. With 1,405 sales in April, San Francisco was No. 2 in national monthly appreciation: 23.6 percent. However, sales volumes in both areas were down slightly from numbers recorded in April 2013.

Redfin’s report, which also tracks median prices and inventory levels, ranked San Francisco prices as the highest in the U.S., at almost $894,000. San Jose came in second, with a median price of $758,000, while Oakland ($547,750) ranked fourth.


DISTRESSED SALES CONTINUE DECLINE ACROSS BAY AREA
Rising prices across the Bay Area have helped more homeowners rebuild equity, resulting in monthly distressed-sales declines in almost all of our local counties.

The California Association of Relators’ April pending and distressed sales report puts the number of distressed sales in the state at 12 percent, unchanged from the previous month. But in the Bay Area, the distressed-sales rate dropped by at least a percentage point in all tracked counties except Sonoma, where it held steady at 9 percent.

San Mateo County had the lowest percentage of distressed sales in California, at 2 percent. Alameda and Santa Clara tied several other counties for second place, with distressed sales dropping to 4 percent.


SAN FRANCISCO OWNERS SPEND THE MOST ON KITCHEN REMODELS, CUSTOM HOMES
As we noted in a May 16 blog post, homeowners planning to put their property on the market this spring should focus their remodeling funds on the kitchen. A recent survey from home-remodeling website Houzz confirms the importance of an updated kitchen, with respondents spending the majority of their budgets upgrading that room.

Houzz’s survey found that the average owners spent just over $26,000 to overhaul their kitchens with amenities such as modernized countertops and appliances. In San Francisco the average kitchen remodeling project ran almost $45,000, the costliest amount in the country. San Jose followed close behind, with the average kitchen job costing about $44,000.

San Franciscans can expect to spend $1.15 million on a custom home, also the highest price in the U.S. and more than double the national average.


LUXURY HOMEBUYERS DON’T DIG DINING ROOMS
Luxury homebuyers across the country are increasingly converting dining rooms to libraries, TV rooms, and entertaining spaces, according to a recent article in The Wall Street Journal.

The story includes an anecdote from part-time St. Helena resident Noreen McGuire, who told the publication that she eats most meals outdoors to enjoy the area’s natural beauty. That’s why it made sense to convert her cottage’s dining room into something more usable, namely a sitting room with French doors that open to the patio.

The new room is now McGuire’s favorite place to relax in the morning or take in the views during the rainy season, the article notes.

(Photo: Flickr/Molly258)


Bay Area, California Home Prices Reach Prerecession Levels

Stephanie Witt - Wednesday, May 21, 2014

May 20, 2014 by Pacific Union

Real estate markets in the Bay Area and California hit a milestone in April, as median prices climbed back to levels observed before the Great Recession.Image of arrows pointing up

According to the California Association of Realtors April sales and price report, the median single-family home price in the state was $449,360, the highest since December 2007. Statewide, the median price increased 11.6 percent on an annual basis and 3.2 percent from March.

CAR says the California median price has increased year over year for the past 26 months but still has a ways to go before reaching its May 2007 peak of $594,530.

Across the nine-county Bay Area, the median home price rose to $768,110 in April, up 6 percent from March and 12 percent year over year. April’s median price was the highest recorded in the Bay Area since October 2007, when it reached $775,438. The Bay Area’s peak median, also achieved in 2007, was $821,539.

As in March, the median price in Marin and San Mateo counties was more than $1 million, though both markets saw prices decline from the preceding month. At $940,570, prices in San Francisco drew closer to the $1 million mark, while they broke $900,000 in Santa Clara County for the first time since CAR began tracking such data in 1990.

Home prices were up in all nine counties year over year, ranging from 1.6 percent in Contra Costa County to 23.5 percent in Solano County.

CAR expects California home prices to grow throughout the remainder of the year, Vice President and Chief Economist Leslie Appleton-Young said.

“Looking forward, it is likely that we will see a more moderate level of price increase throughout the rest of the year, and further improvements in sales in the spring home buying season,” Young said in a statement.

Declining inventory across the state, the Bay Area, and most of our individual local counties also points to further price appreciation in the coming months.

Throughout California, the months’ supply of inventory was 3.5, down from 4.0 in March but up from levels seen last April. At 2.4, the Bay Area MSI also declined from the previous month and was identical to its year-ago number.

Inventory decreased month over month in each of our nine counties with the exception of Sonoma, where it loosened from 3.2 to 3.7. At 1.8, the regional MSI was lowest in San Mateo and Santa Clara counties.

With an MSI of 4.5, Napa is the sole Bay Area county that could be considered a balanced market. Generally speaking, an MSI below 4.0 is considered a seller’s market, while a 6.0 and higher skews in favor of buyers.

(Image: Flickr/FutUndBeidl)


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