No Sleepy Summer for Home Sales in SF Bay Area

By Alicia Lanier, REALTOR

Generally speaking the Bay Area real estate market has seen a bit of a bounce this summer with sales increasing in all categories—from the entry level homes and condos to the high-end market, says Rick Turley, president of Coldwell Banker’s San Francisco Bay Area region.

He mentions that national figures showed June with an 11% increase in home sales and the Bay Area seemed to share that trend with July sales up 15% over July 2008.  “As the number of sold units continues an upward trend, price recovery is a bit of a mixed bag depending on the area. The entry level median price is increasing in all counties, due to very little supply against a healthy demand.  The just-under, just-over $1M mark seems to be holding its own, with a few multiple offers out there for the right property in a sought-after community. The higher end properties over $2M have, in the past 30 days, seen more activity than at any time this year, but price remains a critical factor as to which properties seeing this activity actually go into contract.  It seems the higher the price-point, the more critical it is for a very attractive list price.  Sellers who are selling are very realistic about marketing price, and Buyers who are buying are recognizing good value when they see it, and are taking action swiftly. For cash buyers or those with large down payments, this could be a great time to pick up a bargain in the luxury home market.”

This week the National Association of Realtors released its monthly existing home sales report noting “For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors®.”  The report went on to note, “Existing home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted rate of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008.  The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.”

Lawrence Yun, NAR chief economist, said he was encouraged.  “The housing market has decisively turned for the better.  A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said. Ultimately these are all very positive signs for our market and are a strong sign that we are moving in the right direction towards a housing recovery.

A few other recent articles of note:

Home Prices On An Upswing In The Second Quarter Of 2009 According To The S&P/Case-Shiller Home Price Indices
New Home Sales Blast Past Expectations
The Housing Market: Has It Turned the Corner?
Mortgage Applications Increase In Latest MBA Weekly Survey
Home Market Shows Signs of Life as Declines Slow

TIP: Planning a move – or real estate investment – now or in the near future. Call me at 408-491-1634 or email Alicia.Lanier@cbnorcal.com and ask about my complimentary real estate services to help jumpstart your plans for buying or selling.

Next Economic Stimulus Program: $50-$200 Rebates for Purchasing a High-Efficiency Appliance

By Alicia Lanier, REALTOR

Needing a little financial help to finally replace that old refrigerator that seems to always be running noisily – and, more importantly, running up your electricity bill? Coming in late fall is the home appliance sequel to the auto industry’s “cash for clunkers” program.

Part of the broader economic stimulus program passed by Congress earlier in the year, this new program authorizes rebates of $50 to $200 for purchases of high-efficiency household appliances.

“These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy,” Energy Secretary Steven Chu said in a statement announcing the plan. Only appliances covered by the Energy Star seal will qualify. In 2008, about 55% of newly produced major household appliances met those standards, which are set by the Energy Dept. and Environmental Protection Agency.

Program details will vary by state, and the Energy Dept. has set a deadline of Oct. 15 for states to file formal applications. The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November. Unlike the clunkers auto program, consumers won’t have to trade in their old appliances.

TIP: Another economic stimulus program – the maximum $8,000 tax credit for first time homebuyers - will expire the end of November, 2009.  If you are a first-time homebuyer or haven’t owned a home in three years, call me for details about how this program can benefit you: 408-491-1634. 

Marketwatch: SF Bay Housing “Micro Markets”

By Alicia Lanier, REALTOR

Following is an excerpt from the weekly Marketwatch by Rick Turley, president of the San Francisco Bay Area region of Coldwell Banker Residential. He provides a handy recap of all the activity in various local markets that we serve, including our Silicon Valley. Note that REOs (bank-owned foreclosures) are still hot in many communities!

” … let’s take a look at our local week in real estate:

“East Bay—Berkeley reports, “We are busy, busy, busy.” Lots of buyers making lots of offers and multiple offers abound. We received anywhere from 4-17 offers on various listings and competed against 2-15 offers on others from Berkeley to Richmond to El Sobrante to San Pablo. Danville reports we saw a real jump in new pending sales this past week. More importantly, Blackhawk, which has been so quiet for so long, had nine new pending sales. And in our office, four new sales this past week were over $1 million dollars! Oakland reports a sudden sense of urgency among buyers. We are doing a lot of approvals and submitting applications. The buyers are out there looking. Properties in foreclosures are coming into better neighborhoods, same for short sales. Still it is August and sales have been a little slow the first week. Seeing some nice listings come on the market.

“Monterey County—August started out where July left off, with lots of Agent activity going on! Pebble Beach and Carmel are bustling with people as the annual Concours d’Elegance comes to town , bringing it with it lots of people–some deciding they’d like a vacation home here! Inventory is decreasing, partly due to sales going up and partly due to properties off market, being rented, etc. Carmel is down to only about 14 months supply (was about 28 months), Pebble Beach is about the same, and Seaside, which has been the REO hot spot, has only 1.3 months’ supply!

“North Bay—Greenbrae reports despite the late summertime, open houses were still well attended and buyers are out looking for bargains. Many sellers are saying they want to wait until after Labor day to put their home on the market. Buyers want more choices. San Rafael reports REO inventory is increasing. We continue to see multiple offers in the entry level. One home listed in Novato had 16 offers in the first week. It went into contract $50,000 over asking. All cash offers seem to be the winners of most of the bidding wars. Petaluma reports multiple offers continue to be the norm in the under $300,000 range. We’re starting to see activity in the $500k-700k range with multiple offers on three properties in that price range. Cash continues to be king in the under $300,000 range. One property had 22 offers, the accepted offer was cash and was less than three of the highest offers.

“Peninsula—Burlingame reports the wonderful weekend brought people out of the fog and into the peninsula. We are seeing more multiple offers as inventory is shrinking. The condo market is extremely slow. Menlo Park Santa Cruz Avenue reported one offer was written and accepted from an open house guest! They do work! Activity in a wide range of prices. Buyers that seem motivated to buy. San Mateo reported these market wide stats: Change 2009 VS 2008 same period – active – Belmont N.C., Burlingame +23%, Foster City -15%, Hillsborough +41%, Redwood Shores +15%, San Mateo + 12%, PENDING – Belmont +23%, Burlingame +16%, Foster City +24%, Hillsborough +33%, Redwood Shores -125%, San Mateo +29%. This reflects single family residential only. Higher ends are still a struggle as reflected in Burlingame and Hillsborough.

“San Francisco—Lombard reports a good week for ratified offers in that it wasn’t entry – price level dominant. We had sales in the $1.2 & $3m ranges. Multiple counters, addendums and loan delays are the order of the day. The Market Street office reported it has slowed a bit as many buyers are taking a couple of weeks off before the end of summer. Listings are being readied for the after Labor Day increase of inventory that we are anticipating. Open house attendance was great in some instances and disappointing in others.

“Santa Cruz County—No major changes. Inventory is status quo – low end continues to dominate sales. There is a lot of activity below $800K and many times multiple offers. With the low inventory we are seeing prices rising again, slowly. There is definitely a more positive outlook for both buyers and sellers.

“Silicon Valley—Cupertino notes that the low-end is as competitive as ever. San Jose Almaden reports that we’re seeing multiple offers on almost everything under $500K. Inventory remains low. San Jose Main reports an excellent week for sales, mostly lower end and excellent open house activity. Listings continue to be hard to get. Many multiple offers on lower end properties. Saratoga reports we experienced a slight increase in Previews activity with a few sales in the $2.5 mil to 3 mil range last week.

“South Santa Clara County—Gilroy reports our local market continues to struggle with a lack of inventory in the lower end. REO listings are down and multiple offers are the norm. Hollister reports lower priced homes selling rapidly with multiple offers on many. Morgan Hill reports the real estate industry seems to be getting positive signals, almost on a daily basis, that the housing market is out of “intensive care” and has entered the “recovery room.” Demand remains high, but more importantly, our Agents are reporting that the buying public deems to be much more optimistic about the economy in general and housing in particular.

“In terms of marketing activity, in general, and with exception of the entry level, most homes are on the market longer with discerning buyers waiting for the optimal home at the optimal price. A well-priced, well-presented home can still fetch multiple offers, but it’s got to look appealing to the savvy buyers who are doing their homework. There is no sense in overpricing a listing – a buyer won’t even give a home the time of day if they sense the seller is being unrealistic.

“At the same time, there seems to be no better time to snatch up bargains in the Bay Area at all price points. In the higher end, we’ve seen cases of five to 10 percent list price reductions in properties that haven’t moved, and a final and acceptable offer coming in a little below that. That’s not to say buyers should throw out ridiculous numbers. Certain parts of the Bay Area, after all, have still held their value better than most of the entire country. Sellers who don’t have to sell can hold firm, but there are others who cannot. So, while it may take longer to get the buyer and seller to agree to terms, transactions are happening, and with open minds on both sides, we are beginning to see more positive movement for all. “

TIP: Are you planning to buy or sell in any of the above local markets? Email me at Alicia.Lanier@cbnorcal.com and I would be delighted to help you – or put you in touch with one of my great, highly professional Coldwell Banker colleagues who is an expert in one of these ”micro markets”.

Marketwatch from Coldwell Banker’s President in Northern California

By Alicia Lanier, REALTOR

Our president of the Coldwell Banker Northern California region, Rick Turley, issues a weekly Market Watch to CB agents and this week was full of positive (read: “less bad”) news about the real estate industry. Here are excerpts from his July 31, 2009, report:

“It seemed everywhere you looked this week, the media was reporting on some sort of positive indicator relating to the real estate market. For starters, Good Morning America ran a story on Tuesday about the state of the housing market. Liz Ann Sanders, the Chief Investment Strategist for Charles Schwab, and Mike Santoli, Assoc Editor of Barron’s were interviewed. Essentially they both indicated there are enough cumulative signs from indicators to say that things are not only “less bad”, but we are starting to see some pockets of improvement in the housing market. Among the vital signs they said to watch for in calling a recovery are; Index of Leading Economic Indicators, currently up three months in a row; drop in new unemployment claims (the four week average is down 93,000 from the peak, and never before has there been this large of a drop while still being in a recession); and the spread between short term (set by Fed) and long term (driven by the market) interest rates, which is widening. Additionally an opinion was shared that if the Dow stays above 8,000 – this would be a good indicator that we’re on the road to recovery. This week we danced over the 9,000 mark, closing today at 9,171; making it the best July for the Dow in over 20 years.

“Our industry was the first to be hit by the economic downturn and if all continues on this path, we will be the first out. We probably won’t see housing numbers start to appreciate across the board anytime soon. What we are seeing right now are signs we typically see at the bottoming-out of a down market. Speculators and investors are competing with first time home buyers. Those individuals are going to continue to gobble up the inventory—both REOs and non-bank sellers at the entry price level. In many metros across the country, there are very low levels of inventory at the low end. I was on the phone this afternoon with the Coldwell Banker president for Arizona. They were hit hard, and early, with foreclosures. He told me that today the Phoenix Metro area has under 2 months supply at their entry level, <$250k – yet a 7 years supply of inventory at their estate home level of $2M+.

“Also this week the Standard & Poor’s/Case-Schiller 20-city index was released and in it, home prices in May posted their first monthly increase since the summer of 2006. Prices rose from April in 13 of the metro areas tracked, notably Cleveland, Dallas, Boston and the Bay Area. The news followed reports showing sales of newly built and existing homes rising in June for the third consecutive month. New home construction, though still weak, is the best it’s been since the fall.”

As Rick signals, apparently many real estate experts are now trumpeting the end of “the worst housing recession anyone but survivors of the Great Depression can remember.” An Associated Press article today, entitled Welcome to the bottom: Housing begins slow rebound, proclaims that “the worst is over.”  Before we start singing Hallelujah! let’s get past the last half of 2009.

Whether you are considering buying or selling a home or investment property, call me at 408-491-1634 or e-mail me at alicia.lanier@cbnorcal.com with any real estate questions, to obtain photos and details about homes for sale, or to learn the potential selling value for your home

Bay Area and National Home Sales Up in June

By Alicia Lanier, REALTOR

Signalling that the $8,000 first time home buyer credit in the Economic Stimulus Package is working its magic, home sales on both the national level and the local level continued upward momentum in June. According to MDA DataQuick, home sales in the 9-county San Francisco Bay Area jumped to their highest level in almost three years.

The Bay Area rise, said San Diego-based MDA Data Quick, was the result of improved mortgage availability and a perception among potential buyers that prices have bottomed out. The median price paid for a home increased month-to-month for the third month in a row. In Santa Clara County, unit sales for new and resale homes and condos were up 28.5% in June over the same month last year. However, the median price of all sold homes was down 27.30% to $445,000 in June compared to $612,000 for the same period in 2008.

MDA Data Quick analysts said:

A total of 8,644 new and resale houses and condos sold across the nine-county Bay Area in June. That was up 16.1 percent from 7,447 in May and up 20.4 percent from 7,178 in June 2008.

Home sales have increased on a year-over-year basis the last ten months. June sales have varied from a low of 7,118 in 1993 to 15,735 in 2004 in DataQuick’s statistics, which go back to 1988. Last month was 16.1 percent below the 10,306 for an average June.

“Getting mortgage financing this last year has really been an egregious process, especially for borrowers in the upper half of the market. We’re just now seeing the beginnings of more normal mortgage lending patterns. There’s still a long way to go, but it looks like the worst of the grind is over,” said John Walsh, MDA DataQuick president.

The median price paid for all new and resale houses and condos sold in the nine-county Bay Area was $352,000 last month, up 3.1 percent from $341,500 in May and down 27.4 percent from $485,000 in June 2008. It was the highest since $375,000 last October.

The current median is 47.1 percent below the $665,000 peak reached in June 2007. It hit a low of $290,000 in March this year. About half the downturn appears to be price declines, the other half is the absence of of high-end home sales in the statistics, which pulls the median down.

Financing with home loans above the old “jumbo” limit of $417,000 edged up to the highest level in almost a year. Last month 28.8 percent of all Bay Area mortgages were jumbos, the highest since 31.9 percent in August last year and well above the bottom of 17.1 percent last January. Two years ago jumbos accounted for more than 60 percent of all home purchase loans.

Bank of America and Wells Fargo are the two most active lenders in the Bay Area with 30 percent of the market between them.

Use of government-insured FHA loans – a common choice among first-time buyers – represented 24.1 percent of all Bay Area purchase loans in June, down from a record 26 percent in April but up from 10.7 percent a year ago.

Last month 37.3 percent of all homes resold in the Bay Area had been foreclosed on in the prior 12 months, down from 40.5 percent in May and the lowest since 36.0 percent in August 2008. The peak was 52.0 percent in February this year. By county, foreclosure resales ranged last month from 6.3 percent of all resales in Marin to 62.7 percent in Solano.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,585 last month, up from $1,443 the previous month, and down from $2,407 a year ago. Adjusted for inflation, current payments are 39.7 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 55.4 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains near record levels, while financing with adjustable-rate mortgages is near the all-time low but has recently edged higher. Financing with multiple mortgages is low, down payment sizes and flipping rates are stable, and non-owner occupied buying is above-average in some markets, MDA DataQuick reported.

TIP: Whether you are considering buying or selling a home or investment property, call me at 408-491-1634 with any real estate questions, to obtain photos and details about homes for sale,  or to learn the potential selling value for your home

California’s New Home Construction Tax Credit of $10,000 For Home Buyers Almost Gone

By Alicia Lanier, REALTOR

Apparently even $100,000 million in tax credits for California homebuyers wanting to purchase a newly constructed home or condo is not enough for the pentup demand of buyers finally deciding to risk jumping off the fence! Only about 20% of the funds, which were intended to last until March 2010, are now available – and much of that amount may already be earmarked for transactions in the pipeline. Check cnnmoney.com for an article with full details on how the program works and its current status.

Along with the $8,000 federal tax credit for first time homebuyers, the California tax incentive was intended to spur home purchases. The California tax credit is available only for new construction.

Related Blog Post:  http://hometownsiliconvalley.wordpress.com/2009/05/29/faq-8000-tax-credit-for-2009-home-buyers/

TIP: Whether you are considering buying or selling a home or investment property, call me at 408-491-1634 with any real estate questions, to obtain photos and details about homes for sale,  or to learn the potential selling value for your home.

Drought + Recession: It May Be Time To Explore A “Green Makeover” of Silicon Valley Yards

By Alicia Lanier, REALTOR

One of my colleagues has a true green thumb and it is most evident in the eye-catching landscaping admired by all in her Willow Glen neighborhood and the fresh produce enjoyed by friends lucky enough to be invited to dinner.

Not too long ago, she and her husband invested in a true green makeover of their yard, replacing old thirsty grass and plants with new foliage requiring less water and also installing a new water-conserving irrigation system. Their timing could not have been better, with the Bay Area now facing its first drought in 20 years and a recession straining the pocketbooks of many.

Several Bay Area water providers have a rebate program to encourage water-conserving measures in landscaping. On average, half of residential water use gets poured on thirsty lawns, non-native shrubs and other plants outdoors. And a lot of it is just plain wasted by outdated, inefficient or malfunctioning irrigation systems. So, it just might be time to call your water provider and ask for a free “water audit” and learn how a rebate program might help with a green makeover of your lawn.

TIP:  Attractive landscaping and a watering system helps the resale value of a home.  If you are considering buying or selling a home or investment property, call me at 408-491-1634 with any real estate questions, to obtain photos and details about homes for sale,  or to learn the potential selling value for your home.

Summer Housing Slump in Silicon Valley? Not Exactly.

By Alicia Lanier, REALTOR

Distressing housing news continues, the latest being that foreclosures in the Bay Area as of May are up by 18% over the same time last year and throughout California up by 23%. (California ranks #2 in the U.S. in numbers of foreclosures in May, with 1 of every 144 homes taken back by the lender.)

On the other hand, anecdotally at least,  foreclosured single-family homes and condos in the Bay Area are being snapped up by buyers – frequently with multiple offers - very quickly once the “For Sale” sign goes up. “Short sales” where the seller owes more on a home than its selling value are a different story, with lenders who respond slowly and often negatively still the norm. Most short sales will end up in the foreclosure pipeline.

Our Coldwell Banker agents continue to report that sales are brisk, with many noting multiple offers on the low end (many of them foreclosures) and increasing sales in the $1 million to $4 million neighborhoods as well. And, inventories of homes for sale are shrinking.

Rick Turley, Coldwell Banker president, notes:

“…both San Mateo and Santa Clara counties took a big jump in May in $1 million+ properties, with the number of May sales up 32% over April, and the median price the highest since April of 2008. Similarly, in San Francisco, median price jumped 27% over prior month to $1,750,000 and highest number of sales since last September. The prevailing commentary you’ll hear in any areas that are experiencing increased high-end activity is very careful selection of listing price and great attention to detail for showing condition of the property.”

TIP to POTENTIAL BUYERS: Continue to “fence sit” at your own risk. Whether you are considering buying or selling a home or investment property, call me at 408-491-1634 with any real estate questions, to obtain photos and details about homes for sale,  or to learn the potential selling value for your home.

Refinancing Your Home Loan Can Be Rewarding, But Potentially Difficult in Today’s Credit Climate

By Alicia Lanier, REALTOR

In her recent Wall Street Journal article, A Battle Plan for Refinancing Your Mortgage, Karen Blumental, explains why - even with mortgage rates holding below 5% - the re-fi process has never been more difficult for homeowners than in today’s tight credit climate. Says Blumental:

In the Sacramento, Calif., area, Michael McGee of Winchester McGee Financial estimates that one in four of his customers can’t get a loan approved. In Plano, Texas, Rodney Anderson, a mortgage lender, says the rate sheet of mortgage programs he can offer customers has shrunk to two pages from 42 during the housing boom.

“That doesn’t mean you shouldn’t investigate your options. Lowering your mortgage payment — or at least locking in a long-term low rate — can free up cash for other needs, such as repaying other debt or replenishing your retirement accounts, while reducing your financial stress.

“In addition, if you’re older than 40, shortening your mortgage term now could help leave you mortgage-free in retirement, reducing the income you’ll need to generate from your battered 401(k). “

If you have been considering re-financing, I suggest you read this illuminating article.

And, If you – or someone you know – plans to buy or sell a home or investment property now or in the near future, call me today at 408-491-1634 or e-mail me at Alicia@AliciaLanier.com

FAQ: $8,000 Tax Credit for 2009 Home Buyers

By National Association of Realtors

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.

Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer’s income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

Related Blogpost, March 7, 2009: California Home Buyers Get $10,000 Tax Credit

Don’t miss this window of opportunity! If you are planning to buy or sell your home or investment property now or in the near future, call me today at 408-491-1634 or e-mail me at Alicia@AliciaLanier.com