Sales of new U.S. homes in May were down sharply from levels of a year earlier and also dropped below April's total, the Census Bureau reported Wednesday.
The seasonally adjusted annual rate of new-home sales was down 0.6% from April and fell 32.8% from May 2008, amid a glut in housing. New-home sales in the West, however, were up 1.3% over April's adjusted annual rate.
From April to May, new-home sales increased in all regions of the U.S. except the South, where they fell 8.5%, the Census Bureau reported. But because the volume of sales was much greater there than in other parts of the country, that region's sales decline dragged the national total into negative territory.
Compared with a year earlier, however, May new-home sales were down by double-digit percentages in every region of the U.S.
The median sale price for a new home in May was $221,600, down 3.4% from a year earlier.
The current owners of Michael Jackson's Neverland Ranch are said to be hoping to cash in on the Michael buzz, listing the long forgotten property for a reported $90,000,000... I have no doubt someone out there is expect to turn it into the next Graceland.
If you live in the City and bought in one of the many new high end, high rise condo buildings, the only thing certain is the value of those units is falling as fast, if not faster than anything else in the City.
Some of the buildings have offered refunds to the earlier buyers, still others are doing anything they can do avoid dropping prices.
A friend of mine this past month bought in one of the more heavily marketed buildings in the City... The agent was only to happy to explain within seconds of meeting that the prices for the most part firm, but other options where available.... In the end that included buying the loan down TWO POINTS, tens of thousands of dollars in upgrades and two years of HOA dues paid in advance thanks to the builder...
In Las Vegas things are not friendly, condo owners fed up with their situations have done what others before them have done, turned to the internet to be heard...
One of the costliest and highest-profile condominium developments in the country -- the $8.4 billion City Center project in Las Vegas -- is facing a revolt from some early buyers.
Some buyers who signed contracts are demanding significant price reductions, and have hired a law firm to take their grievances to the project's principal developer, gambling company MGM Mirage. Others want their deposits back. Some are using a Web site, citycentercondodepositgroup.blogspot.com, to air their grievances.
So far, buyers have put down $313 million in deposits on 1,500 units in the 2,440-unit complex. Those who agreed to buy early on now fear they will take possession of condos whose market values are far below what they agreed to pay. Many of the contracts were signed in 2006 and 2007, when Vegas was booming. Click here for the complete story...
Despite Hotel Sector Slump, W San Fran Commands $90M
-By Barbra Murray
The current economy, plagued by job losses galore and belt-tightening on the business and leisure travel fronts, has been more than unkind to the hospitality industry, to say the least. Despite the inhospitable climate, Starwood Hotels & Resorts has nabbed a buyer for its W San Francisco hotel. Keck Seng Investments (Hong Kong) Limited has agreed to fork over $90 million for the 404-room property.
Located at 181 Third St. in San Francisco's South of Market (SoMa) District, W San Francisco is a 31-story structure designed by the architectural firm of Hornberger & Worstell. The property was developed by Starwood in 1999 for a reported $79.4 million according to real estate services firm Jones Lang LaSalle's 2003 San Francisco Lodging Investment Review.
If you’ve lived in San Francisco long enough someone from out of state has asked you if you’re worried about California falling in the ocean. And if you’ve worked in real estate for more than a year, someone has warned you at least once that FSBOs are all the rage. Point being that neither of these two stories ever come true, but you hear them everyday.
So I wasn’t surprised when The New York Times dragged the same tired story out of the closet to again warn us that FBSO are back and better than ever. Next weekend it will be the return of flying cars and moving sidewalks.
The Sell-It-Yourselfers
AFTER interviewing an array of real estate brokers, Cindy Smith decided to list her parents’ ranch house here herself. She created a Web site for the house, 37newmillrd.com; listed it on Craigslist; stuck a for-sale sign on the front lawn; and took out a cover advertisement in the local Pennysaver. She set the price at $595,000.
She had a list of 300 people who had attended tag sales when she sold her mother’s antiques. When she held an open house three weeks ago, she sent e-mail messages to the people on the list. Forty couples showed up.
“There is movement afoot,” she said. “There has been a lot of interest.”
So far, however, there have not been any buyers.
Ms. Smith chose to sell the custom ranch without a broker so that she would have more wiggle room on the price, which reflects the $30,000 she will not have to pay as a commission.
“People are still expecting deals,” she said.
“There are so many tools homeowners can utilize that agents use themselves,” said Ms. Smith, an owner of a special events and public relations firm in Stony Brook. “We can market it the same way they do.”
If you follow real estate here in the City you know what’s selling these days -- homes with signs that read, “bank owned,” “foreclosed” or “short sale.”
Several of the City’s biggest real estate firms aren’t happy seeing those words under their “for sale” signs. It’s not the look they were going for and they’re not too keen on their agents selling such properties.
Brokers are afraid of being labeled, “The preferred broker of the foreclosed or bank owned.” True, many brokers are happy to have money coming in, plenty are worried that when business starts picking up again their reputations will be shot. They’ve spent years finely crafting an image as the high end brokerage or boutique firm and may only be seen by buyers and sellers as a place to turn when you’re in trouble, when the bank is breathing down your neck or when you’ve missed the third mortgage payment.
So what’s the plan?
One of the biggest firms in the City told me it’s considering asking agents to think twice before taking a foreclosure or trouble listed. While a firm legally can’t tell an agent to turn down a listing, some firms want their agents to start thinking long term and evaluate the impact down the road.
Bay Area real estate prices have increased an average of 28% between the first and second quarters of 2009, according to a Bay Area brokerage.
McGuire Real Estate, also reports that the quantity of single family homes that sold increased significantly, up 66% in the same time period.
"This uptick in activity is somewhat expected," said Aman Daro, Vice President of Integrated Marketing at McGuire. "We typically see an increase between the first and second quarters of the year as buyers participate in the spring buying season, but 2009's increases are larger than in past years."
In some regions, like Marin County and the Peninsula, sales more than doubled and in the Western East Bay, which includes Oakland, Emeryville, Berkeley, Piedmont and Alameda, prices increased 32% to average $391,916.
"Buyers waited longer than usual to come out of their winter hibernation," said Aldo Congi, sales manager for McGuire's Bluxome office. "We hope the buying season is just running later than usual."
When comparing second quarter performance to the same time period the year before, quantity of sales is also showing strength, up 2%. Average sale price, however, is down 29%.
But this year-over-year decline in price is slowing. "The previous two quarters' declines were nearly double that in Q2 2009," continued Mr. Daro. "We are starting to see the market as a whole even out."
The upper end of the market in each region is showing the greatest increases in activity. In three of the four Bay Area regions, more units were sold in the highest price ranges than during the previous quarter.
"The upper end of the market has traditionally kept the Bay Area market aloft, and that was the segment that was most affected by the financial crisis," said Mr. Congi. "All buyers are value-conscious right now, so it's good to see that these influential buyers are recognizing that it's a good time to get great value."
Have we hit bottom? "It's too early to tell," said Mr. Daro. "One data point does not a trend make. The market continues to fluctuate according to seasonal trends, so you can expect summer activity to decline versus the spring, but we should see another increase in the fall."
Data is sourced from San Francisco, Marin, East Bay and Peninsula Multiple Listing Services.
Home sales in the Bay Area jumped to their highest level in almost three years, 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, a real estate information service reported.
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, according to San Diego-based MDA DataQuick.
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.
In my efforts to always remain positive about the real estate market here in the Bay Area I wanted to point out the latest home sales data does confirm what everyone has been saying; things are picking up... Prices as a whole are down 27.40 percent year over year, but sales are up 20.4 percent year over year...
I'm now hearing from sources that agents at Morgan Lane are less than thrilled with the merger.... It was told to me that when Morgan Lane was opened in Marin it would be home to only the county's top agents, "the ultimate boutique firm." Now with the Pacific Union coming on board does that mean, and I'm quoting here, " Now can any crummy agent gone Morgan Lane."
Nothing better than beating the local dying newspaper to the punch.... The Chronicle did a nice job of getting the details out of the press release, cheers to them.. but then again I have a full time job...
I've got calls out to a few of the power elite... should have something by morning....
from the Chronicle...
Boutique real estate firm Morgan Lane Marin is
swallowing up its larger competitor, Pacific Union GMAC Real Estate,
through an acquisition that promises to create a local brokerage
powerhouse.
The deal, for an undisclosed sum, will bring together 17 offices and more
than 430 real estate professionals, with combined sales volume projected
to reach $2.2 billion this year. But it also presents real challenges for
the owners of the luxury-focused Marin firm, who will suddenly oversee a
far larger and more generalized operation at a point when nearly all
brokerages are struggling amid a severe housing downturn.
"With Pacific Union's strong reputation and platform, coupled with Morgan
Lane's agile and entrepreneurial local management and marketing methods,
we have every reason to believe that we are well positioned to become
Northern California's dominant luxury real estate brand," Mark McLaughlin,
chief executive officer of Morgan Lane, said in a statement.
The two companies will continue to operate under their existing names.
Pacific Union of San Francisco, one of the region's largest brokerage
firms, is owned by a division of Brookfield Asset Management Inc., a
publicly-traded Toronto company with property, power and infrastructure
holdings.
Late Monday afternoon I was fortunate to run into one of the big real estate CEOs making the rounds. The CEO, not surprisingly, was only to happy to talk about the Morgan Lane purchase of Pacific Union, a story first reported on this blog.
Here’s what I was told....
I wanted to know what was behind Morgan Lane's decision to buy Pacific Union because they are two very different firms with two very different philosophies.
My source told me it was a case of a CEO exceeding his ambition and losing track of the business model started years ago.
Apparently, Mark McLaughlin, CEO of Morgan Lane, had for years told anyone who asked that to work at Morgan Lane “agents needed a proven track record of success at the high end, or you wouldn’t get into my firm (Morgan Lane).” He was also quoted as saying “Thoroughbreds only.”
But he stood by his words, my source said. McLaughlin held Morgan Lane to his mission of hiring top producers -- the elite, the best. But now my source was questioning why McLaughlin was picking up a firm that is merely “volume driven.” The source said buying Pacific Union, “went against the business model.”
When asked if the soon to be former CEO of Pacific Union was pushed or jumped, I was told Avram Goldman was letting friends know “he was looking forward to crushing grapes in Sonoma and spending more time with family.” That’s the battle cry of the pushed. I would say.
Finally in response to the question why the Death Watch title for the Pacific Union posts? As one broker told me today, everyone expects McLaughlin is going to clean house over at Pacific Union... Dead agent walking may be the new phase.
Just off the phone with some folks at Pacific Union and here’s a summary of what I’ve been told...
Just about everyone I spoke with was indifferent to being sold... Most at PacUnion saw it as a good thing....
Overall those I spoke with where happy to finally have some direction(everyone was expecting the company would be sold)... PacUnion agents like the idea of working for one owner rather than two... Agents I spoke thought having local ownership would now mean faster decision making and better decisions... Agents from PacUnion were also hoping Morgan Lane would put the PacUnion Greenbrae office to use...
The two negative comments I heard back were that PacUnion agents heard that Morgan Lane agents had they “noses out of joint” over the decision and that Morgan Lane offices were, “holes in the wall.”
I’m expecting calls this afternoon from inside Morgan Lane... Details to follow...
It's not just me it seems who wonders about title insurance... According to the Wall Street Journal, several states are taking a closer look...
Title-Insurer Fees Draw Scrutiny
The U.S. title-insurance industry faces increasing pressure from regulators to justify the fees charged to consumers for ensuring they have clear ownership of their homes.
For most people, title insurance is just another mysterious fee they must pay when they buy a home or refinance a mortgage. Unlike some of those fees, though, title charges aren’t negligible. They range from several hundred to several thousand dollars—and last year totaled more than $10 billion for the title industry. Lenders insist on the insurance to protect them against the possibility that a taxing authority, another creditor or a disgruntled heir may have a claim to the property, among other risks.
As falling home prices tempt more people back into the housing market in some parts of the country, politicians and regulators are raising questions about whether they may be paying too much for this protection. “There’s no transparency,” Delores Kelley , a state senator in Maryland, said in an interview. She introduced legislation that created a commission to study the title-insurance industry in Maryland. That panel is due to make recommendations about possible regulatory changes by December.
One of Marin's Real Estate Royalty will announce Thursday she's changing brokers...
Barbara Major will make it official in the morning that she's going from McGuire Real Estate to First Marin Realty in Mill Valley...
More details to follow...
In the past 48 hours I’ve received more emails and phone calls about one person than I can count. That person is Mark McLaughlin, CEO of Morgan Lane and mastermind behind its deal to buy Pacific Union.
Everyone, and I mean everyone, has something nice to say about Mark. Whether it’s a man crush, a current employee singing his praises or an ex-employee doing the same, it’s all good.
Real estate people say:
“He’s pure genius,”
“No one working for Mark should ever be complaining.”
“You can’t find a better manager in town.”
“Mark makes you feel like you can do anything.”
“Mark has the respect of every agent in his office.”
But my very favorite is: “He’s gorgeous, kind, ethical and have you seen that hair?”
Existing-home sales rose for the third consecutive month with inventory easing and home prices declining less sharply in June, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 3.6 percent to a seasonally adjusted annual rate1 of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2 percent lower than the 4.90 million-unit level in June 2008.
Lawrence Yun, NAR chief economist, is hopeful about the gain. “The increase in existing-home sales occurred in all major regions of the country,” he said. “We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions. Despite the rise in closed transactions, many Realtors® are reporting lost sales as a result of new appraisal standards that went into effect May 1 of this year.”
A June survey of NAR members shows 37 percent experienced at least one lost sale as a result of the new Home Valuation Code of Conduct, with seven out of 10 reporting an increased use of out-of-area appraisers. Seventy percent of NAR appraiser members said consumers were paying higher fees, while 85 percent report a perceived reduction in appraisal quality.
If you live in San Francisco and haven’t sorted through your mail yet, be careful not to throw out the glossy brochure for “The future of Doyle Drive.”
The big meeting is July 23 from 6 -8 p.m. at Fort Mason Center... It’s billed as an open house...
I’m really not making this up... The full color 4 page brochure talks about talking the road’s future, which I might add seems brighter than mine.
In the brochure it mentions world class design, native plant and seed collection and utility relocation. all I suspect to gather support for the project.
I understand Doyle Drive doesn’t meet earthquake standards, but can anyone remember such hoopla for a road before?
So unless there’s some sort of government requirement that before installing a road you need a long series of meetings, a website and an expensive mail campaign could someone explain why all the money is being spent on a road.
And by the way, the project won’t be completed till early 2013
In an effort to win your business, Zillow is now offering a new toy called True Cost... Zillow claims it helps cut through all the confusion of trying to find the real price of a mortgage... And seeing how Zillow is for the most part in the Mortgage business, why not...
Here's how Zillow put it...
Real estate web site Zillow.com® today introduces True Cost, a new comparison feature within Zillow Mortgage Marketplace that allows borrowers to shop anonymously across multiple loan programs, compare custom quotes and find the most affordable home loan for them. The True Cost feature calculates up front how much a borrower will pay in interest and fees over the time period they plan to live in the home. Borrowers can then compare the True Cost across all custom loan quotes they receive from lenders to determine the best loan for them.
Zillow Mortgage Marketplace is the only mortgage shopping service that enables consumers to submit loan requests anonymously and receive unlimited custom quotes from a network of thousands of confirmed lenders. On average, consumers receive 15 custom, accurate quotes to compare. Since lenders are required to disclose all upfront fees, borrowers are able to compare loan quotes on a true apples-to-apples basis. The Quotes Received shopping tool enables borrowers to sort and filter out quotes with payments and fees they can't afford. Lender reviews and ratings help borrowers decide what lender to contact.
According to the Wall Street Journal three of the best selling neighborhoods in America are right here in the Bay Area... These aren't the neighborhoods we typically talk about... Two of them are in Oakland and the other is Richmond... The info comes from Zip Reality...
Hot Zips
From the WSJ blog...
Where are sellers receiving offers that are beating their asking prices?
Try looking at neighborhoods where lots of bargain-priced foreclosures are driving bidding wars between buyers. Unsurprisingly, neighborhoods that have been glutted with foreclosures are leading the ranking of the “hottest” zip codes in a survey of the highest sales-to-list price ratios by ZipRealty, an online brokerage.
Youngtown, Ariz., tops the hottest zip code list, with homes selling in the Phoenix fringe suburb for 11% above their asking price during the second quarter, followed by the 90731 zip in San Pedro, Calif., a blue-collar Los Angeles suburb, where offers topped asking prices by nearly 10%. The list of hot zip codes includes a mix of similar middle-class suburbs close to city centers, such as Richmond, a San Francisco Bay Area community.
New-home sales soared in June from the previous month, the third increase in a row and supplying fresh evidence the housing market is beginning to recover from its long crisis.
Sales of single-family homes increased by 11.0% to a seasonally adjusted annual rate of 384,000 compared to the prior month, the Commerce Department said Monday. Though, year-over-year, new-home sales were 21.3% lower than the level in June 2008.
The median price for a new home was $206,200 in June, down 12.0% from $234,300 in June 2008. On a monthly basis, the price fell from May 2009's $219,000.
May marks the second consecutive month of positive returns. I know the numbers are small, but in the right direction none the less.
I know everyone would love to say we’ve hit bottom and it’s all sunshine and roses from here, but probably not the case.
Money is still tight, plenty of high end homes sitting around lots of buyers still waiting for prices to drop further.
Here's the Wall Strret Journals take on events...
By KERRY GRACE BENN
U.S. home prices continued their multiyear slide in May, according to the S&P Case-Shiller home-price indexes, although the indexes showed their fourth-straight month of slightly smaller declines and increased month-to-month for the first time in nearly three years.
Sixteen of 20 major metropolitan areas posted price declines of more than 10% from a year earlier, with the Sun Belt continuing to be hit the hardest. Nationally, home prices are at levels similar to the middle of 2003.
Separately, U.S. consumer confidence retreated once again in July, a report released Tuesday said.
David M. Blitzer, chairman of S&P's index committee, said the pace of descent appears to be slowing. "While many indicators are showing signs of life in the U.S. housing market, we should remember that on a year-over-year basis home prices are still down about 17% on average across all metro areas, so we likely do have a way to go before we see sustained home-price appreciation," he said.
As of May, the 10-city index is down one-third from its mid-2006 peak and the 20-city is down 32%. The two indexes posted their first monthly increases in 34 months.
I've mentioned in the past that condo developers here in the City have been doing everything they can to avoid reducing prices. I know friends who have managed to get as much as $50,000 in upgrades or mortgage buy downs to avoid a price reduction... All in an effort to avoid refunding money to buyers with deposits when the prices start to fall...
With the condo market still in decline, prices are now catching up with reality...
S.F. condo builders whacking prices to sell units
San Francisco Business Times - by J.K. Dineen
From the sexy curved glass penthouses at the Infinity to stucco tenancy in commons in the Mission District, condo buyers with cash to invest in new housing are seeing some of the best deals in decades.
Prices have been slashed 30 percent at new construction projects like Tishman Speyer’s Infinity, Lennar’s 103-unit Blu on Folsom St. and Bosa Development’s 99-unit Radiance. Condos originally priced at $850,000 at the South Financial District’s Blu are now selling for $650,000. Average sales prices for tenancy-in-common units in the Mission District have fallen 35 percent in the past two years, according to Randall Kosick of Zephyr Real Estate. Across the city, median sales prices have dropped from $835,000 to $635,000 since the spring of 2007, according to Socketsite, an online publication that tracks residential real estate in San Francisco.
Until then the good folks over at the WAV Group have put out a free white paper on the topic , and below you’ll find a brief summary from their blog.
The Advertising Age has Ended, the Edutizing Era has Begun Consumers simply do not want to be “sold” anymore.
They have become cynical about advertising claims and “its all about me” advertising. They dont want to hear an agents claims of greatness. They want to understand what you can do for them. They want to know that your claims are backed up by legitimate experience and insights you can bring to them. They want you to prove why you are the best agent or broker for them. Simply making promises of greatness is not enough to attract consumers anymore. Customers trust brands in the same way they trust other people. When a company performs consistently against its stated values and follows through on commitments consumers generally trust them. Those that say one thing and do another are those who are abandoned after their one chance.
If you’re interested in downloading a copy of the report, and I highly suggest you do, click here and once on the site, simply click on the report.
If you’re into high end home magazines offering listings from around the world, inside Friday’s Wall Street Journal you’ll find, “Century 21’s Fine Homes & Estates”. It’s 57 pages of over the top homes from around the world. If nothing else, it’s a great resource for new marketing terms for tired fliers.
