The San Francisco Real Estate Blog



San Francisco Real Estate Blog. It's every bit as interesting as Curbed, the New York Real Estate blog.
-- Max Black - Prairie Fire












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February 2008




February 14, 2008

America's Most Overpriced Suburbs

The publishers of Forbes Magazine have come out with their annual list of most overpriced suburbs.

The article points out it takes almost 15 years of total earned salary for the median-income household to afford a home in Berkeley, California. Which by the way I should mention is listed as the 2nd most overpriced suburb behind Santa Monica.

So if you disagree with the folks down at Forbes, what makes living here worth the price of admission?




February 16, 2008

Bay Area home sales fall to 20-year-low

It’s time to put some perspective into the falling home prices stories that have been splashed across the papers these past few days...

The Chronicle has come out screaming, “The median price paid for Bay Area existing single-family homes was $585,000 last month, down 8.6 percent from a year ago...”

According to the Web site infoplease.com, 59.7% of Californians own homes, and about half off all Americans own stock either individually or through a mutual fund, according to Reuters.

How does the dip in home prices compare to the stock indices in the last year:

Index price from a year ago*

NASDAQ -7.02%
S&P 500 -5.56%
Russell 2000 -12.92%

The average of the three indexes -8.5%
Source: morningstar.com

What does that tell us? That the “CRISIS” in the housing marketing is no different than the supposed “crisis” in the stock market. My point is, yes, stocks are down and homes are down and that’s just the way it goes sometimes.

But a crisis sells more papers. So that’s why newspaper and broadcasters like to paint the slight real estate dip in scary bold print.

The fact of the matter is the dip is only a “crisis” if you’re selling your house...In Marin that amounts to about 600 families, according to the MLS. What’s more, many agent say the market is turning around.... In Tiburon a $3,800,000 home went for over the asking price and generated multiple bids... Agents in the San Francisco say there are plenty of buyers for home that are priced right.

It’s time for homeowners to learn what shareholders have known for years: prices go up and down. Over the long run, the market goes up and stocks go up. If you take a look at the five-year average of those same three stock indices, you’ll find it the markets returned about 13 percent. Since the average American lives in his or her home five to seven years before moving, he or she will probably see a return on investment too.

It’s all about the big picture and having some long term perspective.




February 18, 2008

A baby-boomer bubble is forecast

Just last night I was sitting around on the couch waiting for the media to
announce the next housing crises. It has been at least 24 hours since the
last one... Suddenly my prayers were answered, but this time there’s a
silver lining... At least in the Bay Area...

It’s been dubbed the, “generational housing bubble.”

According to a new study by researchers at USC the troubles headed our way
are courtesy of the baby-boomers... The LA Times described it this way...

“Now, 78 million boomers are about to enter their twilight years when
homeowners tend to become sellers rather than buyers. As a result, the USC
duo expects there will be "many more homes available for sale than there are
buyers for them."

Finally... I don”t know an agent or buyer that has complained about the lack
of inventory... I say boomers can’t get on with the selling of their homes
soon enough...




February 19, 2008

Homeowners anxious for new rates


"I think it's just going to stabilize the housing market, but it's not going to turn it around.”

I found the aforementioned quote this morning in the Press Democrat, Santa Rosa ’s daily newspaper. The quote was from Joan Picard, of the Redwood Empire Mortgage Lenders Association talking about the conforming loan changes.

And while such stability is a love thought, it’s not likely to happen. I’m like ten thousands of folks waiting patiently to refinance their home. But after a couple weeks I decided to start calling around to see what was up because mortgage numbers have been going nothing but up...

From my vantage point, the market is still headed south. But I wanted to see what others thought.

So I started asking around...

Leah Karp, a Marin County Realtor doesn’t see the new limits as enough to stabilize the market... Karp says of the plan, “It’s not going to create new buyers, but will help bail out those already in trouble.” She reiterates what everyone has been saying, there’s just too many homes out there.

Ed Lynch with Residential Pacific Mortgage in Mill Valley goes one step further.

He sees the continue spread of foreclosures and short sales... Lynch says, “It’s not like the dot.com bust where it was over in three months, people took their loses and moved on... This is going to be a long and protracted process.” Lynch hopes the government isn’t too late to the ball game.

Lynch does have a long list of folks waiting to refinance.

So for the tens of thousands of you, pining your hopes on lower rates, a bailout and a quick turn around in the market, don’t hold your breath.. I think that we’re all in for wild ride for the next year....

But lets hope I’m wrong





February 20, 2008

Indianapolis Maintains Title of Nation's Most Affordable Housing Market

The National Association of Home Builders has proclaimed Los Angeles the most expensive city in the United States to live in. According to the just released study, only 6.2 percent of the resident could afford a median priced home ($456,000) in Los Angeles .

$456,000? Give me a break. What were they drinking at the NAHB? Because last time I checked the median price of a home in San Francisco was $749,000. A 64% premium over LA...

I understand the key factor in handing the title over the LA was the lower median family income... but it just seems hard to imagine pay is that much better here....

So take pride in your city, and take pride in yourself... Somehow you’ve managed to find a way to live what is probably the most expensive city in the United States ... But is there really anyplace you’d rather be....

And for the record, in order of least affordability with populations above 500,000

LA
San Francisco
Santa Ana , Calif.
New York City
Ventura , Calif.
Nassau , N.Y.
Miami , Fla.
Riverside , Calif.
San Diego
Modesto , Calif.




February 21, 2008

House Swapping Is a Growing Trend in Tough Real Estate Market

I used to work at a fancy television network located in New York City. You had to pitch stories daily. Sometimes those stories were good. Sometimes you pitched a story just to show your boss you were keeping busy. Every now and then you’d have to work on the latter.

I’ll show you an example of that type of story that just ran on the Web site of ABC’s Good Morning America...

“House Swapping Is a Growing Trend in Tough Real Estate Market...Wendy Bounds Discusses the Pros and Cons of House Swapping”

The story comes with two photos... One standard San Francisco shot and another shot of two “businessmen” shaking hands in what is clearly a back alley in Europe.

The story goes on to point out that the less than stellar real estate market has driven people who can’t sell their homes to now trade them. Does this really merit a story on network news?

I work with a lot of real estate agents, and have never heard anyone talk about this growing trend.

While the story is full of meaningless and obvious tips for swapping your home for another, it does offer up three great websites I’ve used before to help folks research neighborhoods.

http://rottenneighbor.com
http://walkscore.com
http://greatschools.net

So if you are one of those in the process of home swapping, I would love to hear your story.




February 22, 2008

High-end home sales soar in Bay Area

I was recently asked by a Marin agent to crunch some numbers on the direction home prices were headed... The Chronicle seems to have come to the same conclusion about higher end homes, sales there are good....

While the overall average price for a home in the Bay Area continues to go up, the prices for lower and mid-range homes continue to decline... the sale of multi-million dollar homes is what's keeping the average up... That means the people who probably don’t care if the price of gas goes up a dime or if the electric bill is a few bucks higher will continue to buy...

Where prices go next will depend on interest rates.




February 25, 2008

Online real estate startups doing OK

This is one of those stories that speaks for itself... We’ve all heard the number: more than eighty percent of all home buyers and sellers start their search online...

For the doubting Thomases, for those realtors not yet convinced that the future of our business lies online, let me offer this nugget. The Chronicle says that while business has slowed in the online real estate world, it is still growing rather than shrinking.

Case in point. Since late September, Redfin’s site share of real estate sales in San Francisco has jumped by 176 percent.

"There's no doubt that a lot of brokers are feeling some pain right now," said Pete Flint, chief executive of Trulia, a real estate search service in San Francisco. "They're spending less on advertising than they were, but they're spending a significantly larger portion online, because it's cheaper, and it's where the audience is."

I would love to hear what others are doing to migrate their businesses online.




February 26, 2008

Stimulus Plan Aids Buyers of High-Priced Homes

Sometimes it’s hard for me to imagine what folks in Arkansas think when they read about mortgage problems here in California. This past weekend the New York Times did a story on what the new conforming loan limits will mean to Californians.

The article mentions a Tiburon family (currently living in a condo) that will benefit if the price of money drops. If all goes well they’ll be able to afford what will more than likely be a million dollar home in Marin. I’m sure every Arkansan (I used to live there, and yes the do call themselves Arkansans) feels bad for folks struggling to buy million dollar homes.

The story does a decent job of painting the housing situation, but it’s interesting to see how the rest of the country might be getting an up close and personal look at the mortgage mess here in the Bay Area.




February 27, 2008

Bay Area home sales hit new low

I’m going to come right out and say it: there’s no real way to sugar coat the real estate news of the past 24 hours.

According to the Chronicle, here’s the worst of it...

“In the Bay Area, sales declined 39.3 percent while the median price fell 3.9 percent from a year ago to $691,390, the association said....

“Sales of existing homes nationwide fell by 12.7 percent in 2007, the biggest decline in 25 years, and are down 20 percent from their all-time high set in 2005, the final year of a five-year housing boom that saw sales and prices soar to record levels.”

Here is my take:

A 3.9 percent decline is a far cry from a disaster. Two years ago it wasn’t uncommon to find a home not selling for asking... Homes might even have sold 3.9 percent less than asking... But it wasn’t the end of the world.

If I told you two years ago your dream house was on sale for 4 percent off the asking price, would you have decided not to buy the place? No, you would have jumped all over that chance..

If this is the worst of times (avoided half a cliche) and homes have fallen a mere 3.9 percent from a year ago, I think we’re all safe in saying what we’re seeing is a mild correction. Back when the market was en fuego, everyone was saying homes were overpriced.

4. And finally... Several agents I spoke to today have told me both the numbers for San Francisco and Marin are for 2008.

So here’s is my bottom line... Is there anyone out there who didn’t expect prices to drop?




February 28, 2008

Hi-speed house hunting: 18 best real estate sites

Who doesn't love a good list?

I know I do.

So here's a list from the Today Show: the 18 best real
estate sites for house hunters.

But to be honest with you, I don't agree with the list, and for the
life of me can't figure out how the show came up with the number eighteen.

Still, it's always interesting to see what
everyone else is checking out.




February 29, 2008

The dog days of real estate

We’ve all been told we need a niche, and after taking a couple minutes of serious contemplation I’ve come up with one...

I now specialize in home buyers looking for property above $65 million and paying all cash... That way I can get my one sale over with early in the year and take a breather till say... 2010.

Carol Lloyd in the Chronicle points out that niching has been slowly getting out of control these past couple years.

To make her point, in her story she finds an agent whose niche is dog owners... You know the type... They carry their cat-size dog in a Hermes handbag, little dog head poking out at the top.

In Marin agents love to specialize... Whether it’s a single neighborhood in Mill Valley, a particular school district or Eichlers, agents love the subspecialty idea.

So my question to the masses is does this really work? Does having a narrow niche really make a difference or do you get the feeling by calling yourself the downtown Mill Valley specialist folks are passing you by who want to live outside of downtown Mill Valley?

Love to hear your thoughts