Friday, February 5, 2016

According to Experts 2015 Was Quite a Year for California Real Estate.


With the latest numbers on existing-and-new-home sales from the National Association of Realtors(NAR), we can now close the books on 2015.
And quite a year it’s been.
As we’d expected, 2015 produced major growth and some big-time milestones in California’s housing’s recovery.
Jonathan Smoke, chief economist for NAR puts it this way. How good was it? Total home sales grew 7 percent over 2014 for the best year in real estate since 2007, based on 6 percent growth in existing-home sales and 15 percent growth in new-home sales.
The increase in 2015 was a stark contrast to the decline in total sales in 2014.
And en route to housing’s definitive recovery in 2015, we hit plenty of landmarks, including a new nominal record for the median price of existing homes in June, a substantial decline in distressed sales, an uptick in the share of first-time buyers, and an increase in the share of new homes among total sales.
NAR estimates from monthly sales and survey data that sales to first-time buyers were up 12 percent.
An improving economy, pent-up demand, and strong affordability brought moreMillennials and other first-time buyers into the market.
Sales to buyers relocating or resulting from a job change were up 8 percent as the country saw close to 2.8 million jobs created and the unemployment rate fell to 5 percent.
Demographics were a driving force behind strong demand for housing in 2015 as we returned to a more normal pace of household formation related to the healthy job market.
The new-home market grew in part because of builders responding to stronger and more consistent demand from entry-level buyers.
As a result of product starting to shift, the median price of a new home ended the year at $288,900, down 4.5percent from last year.
Not everything was about rainbows and green pastures, however, says Economist Smoke.
Distressed sales were down 19 percent as a result of fewer foreclosures and short sales. Sales to investors were down 10 percent as fewer distressed sales provided fewer bargains.
Even sales to international buyers were down 12 percent due to weak economic conditions abroad, combined with a much stronger demand.
What is NAR expecting in 2016?
More growth but it will be more moderate for existing-home-sales, and just a bit stronger for new-home sales. The demographics that fueled all that growth in 2015 should be just as strong in 2016.
More employment growth should lead to similar household formation, and affordability will still favor buying over renting for those who are qualified and ready to settle down.
All in all, now is the time to call your local Realtor and start searching for the home of your dreams.

Sunday, January 31, 2016

A Few Helpful Hints Before Buying a Cliff Side Home



Few sights are as beautiful as a home perched on a craggy cliff, overlooking the ocean—except when that cliff starts to crumble. That’s what frightening video footage has shown is happening to the coastline in Pacifica, CA, just south of San Francisco.

Ten days of El Niño rains battering this bluff have caused portions to collapse into the sea. And since some people’s apartments are situated so close to the brink, many lost their backyards and porches, and now must be wondering if their homes are next.

The city of Pacifica has declared a local state of emergency. So far, it has condemned 20 homes as uninhabitable, ordering its inhabitants to vacate the premises. More may follow, because El Niño is far from over.

As sudden and dramatic as this may seem, the U.S. Geological Survey—which studies the impact of storms and erosion on shorelines—has found that the cliffs in Pacifica have been retreating at an average rate of about 2 feet per year since 1950. But it’s hardly the only area at risk; coastal erosion affects many areas.

So if you’re pining for a cliff side retreat of your own, is there anything you can do to keep it from slipping out from under you?
 
According to environmental designer and science teacher Pablo Solomon, certain beaches are indeed safer than others. 

“There are basically two types of beach fronts: those in which the ocean is depositing sand and creating more beach, and those in which the ocean currents and waves are steadily eroding them away,” he explains. Buying a home on the former is way better than the latter.


You just do not build on an eroding beachfront and expect to not end up in the ocean sooner or later. When you are building on dirt cliffs, it makes no difference if they are 8 feet tall or 80—they will eventually erode and collapse. In fact, building on stone cliffs is not always a sure answer. Give the ocean enough time, and castles, forts, and anything can fall.”

The USGS features a map identifying areas most vulnerable to coastal hazards such as erosion. And if you do find yourself swooning over a home near the ocean, you’ll want to bring in some additional experts to assess if it’s a solid purchase, so to speak.

“Buyers considering these types of homes really need to bring in structural and environmental engineers as part of their due diligence.”  “Depending on the makeup of the land, it may be that some terrains simply can’t safely support a structure on them for the very reasons these homes are collapsing. But other areas could be fine.”


So until you’ve done your research, don’t let the crumbling cliffs in Pacifica scare you away from a home with an ocean view. In the words of one Pacifica renter, there is a slightly brighter side to the situation:

Friday, January 22, 2016

Typically Seasonably Slow Bay Area Real Estate Shows Hefty Gains


December 2015 single family home sales showed unseasonal gains in nearly all MLSListings counties, compared to November 2015. Santa Clara had the largest gain of 20%, San Mateo 14%, Santa Cruz sales rose 9%, and Monterey 5%. Only San Benito sales dropped 17%. December year-over-year sales remain above 2014 levels in four of the five MLSListings counties. San Benito sales rose 20%, both Santa Cruz and Santa Clara grew 16%, and San Mateo increased 7%, with Monterey showing the only decline at 2%.
 
Month-to-month inventory tells a different story, continuing to decline across all counties compared to November 2015. Inventory dropped 52% in San Mateo, 46% in Santa Clara, 45% in Santa Cruz, 15% in Monterey, and 3% in San Benito. It remains split among the counties compared to 2014, with San Mateo up 14%, San Benito up 4%, Monterey up 2%, and Santa Cruz and Santa Clara down 16% and 1%, respectively.
 
Compared to last month, median sales price dropped 20% in San Mateo County, 7% in both Monterey and Santa Clara Counties, 5% in San Benito County, and grew 4% in Santa Cruz County. Compared to 2014, the median sales price remains relatively positive, with the counties of San Benito up 11%, Monterey up 9%, Santa Clara and Santa Cruz counties up 6%, and with San Mateo up 2%.

Tuesday, January 19, 2016

Top Tips for Selling Your Home in 2016



If you’re planning to sell your house this year, well, you’re in luck.“The 2016 housing market is forecasted to be mainly a seller’s market, filled with increasing home prices, relatively low inventory, and fierce competition between buyers,” says Jonathan Smoke, chief economist for realtor.com®.
But you could still make missteps on the way to the bank. Yes, your house will likely sell, but when? Remember, time is money.

“For sellers, it’s about understanding the ins and outs of their local market so they can optimize the price of their home and close quickly,” Smoke says.
Smoke and his team analyzed market trends to distill their best advice for homeowners looking to sell in 2016. Follow these tips to get the most out of your home sale.

Price your home to the market


“What Realtors® tell me over and over again, and from the analysis that I’ve seen historically, the most important thing is getting the price right,” Smoke says.

In 2016, prices are expected to increase nationally 3% year over year. Local price changes are anticipated to be more dramatic, with markets such as Stockton, CA, and Las Vegas, NV, expected to increase by 10%. But that doesn’t mean those stats are true of your town, or your neighborhood.
“Making the error of going for a price that’s well above the market price is a recipe for being let down and potentially not selling the home at all,” he adds. A home that sits on the market eventually will turn off buyers, who will suspect that something is wrong with it.
Sellers who work with a local Realtor to optimize the price of their home based on its unique features and surrounding neighborhood are often able to receive the highest price for their market and sell more quickly.

List during peak season

 Unlike buyers, who want to minimize competition, sellers benefit from demand. Prime home-buying season begins in April and reaches its peak in June, according to realtor.com analysis of home sales. Sellers who list their home during the prime spring and summer months benefit from a larger population of buyers and potential bidding wars, which often result in higher prices and faster closings.

Offer incentives

This one seems counterintuitive, given what we’ve said about a seller’s market, but hear us out. Last year—the best for U.S. home sales in nearly a decade—37% of all sellers offered incentives to attract buyers.
“The nature of this market is that you’re going to have more first-time buyers, who are more dependent on financing,” Smoke says. Getting a loan is one thing; coming up with a chunk of cash for closing costs, on top of the down payment, is another.
“If you’re a seller and you’re able to offer some money toward closing costs, you’re actually making it easier on that buyer, and they might be more willing to give you the full asking price,” Smoke explains. You could end up with a faster sale and more profit.

Best place to sell a home: California

This isn’t really actionable advice since if you don’t already own a home there you won’t be selling one, but FYI: California markets are accelerating past the already strong national averages and showing extremely favorable conditions for sellers.

Robust job growth, increasing prices, and limited inventory have sellers ready for big gains in the greater metro areas of Stockton, Bakersfield, Fresno, and San Jose. Once you’ve sold, though, you may not be able to afford to buy again in the area—we’d suggest looking in the Midwest or South.

Wednesday, December 30, 2015

Experts Revel 2016 Real Estate Predictions


As real estate-minded people, we’re always trying to predict the future. No one wants to buy at the height of the market, and everyone is scared the rates are going to rise. The more people you ask, and the more research you do, the more opinions you’ll hear. So, what are the real trends in the market, and what does that mean for us as buyers, sellers, investors, etc?
First, most experts will agree that extremely hot markets like NYC, San Francisco and Southern California will begin to cool down. These very expensive markets saw less of a hit in the recession and therefore rebounded much quicker. The sales will likely slow in these markets, which could possibly lead to increased inventory, or at least a slower rate of price increases.
Next, if people are starting to buy less in these hot markets, it would make sense that they are putting their money elsewhere. It seems as though more buyers are moving from the northeast and west coast and heading south. Markets in Texas, Florida and the Mid-Atlantic are all seeing more houses sell, and they are selling at a faster rate.
This third trend is a bit surprising, but a very good sign for overall population and density growth in our major metro areas. This is the trend of people living in more multi family/condo units, work-live spaces and amenity-rich suburbs. What was once the majority of home buyers frowned upon is now a very common trend in cities across the country. With such pull toward these hot markets, more and more people are moving into less and less space. Engineering and technology advances have led to innovative new building and neighborhood designs. The benefits of living in these kinds of areas are really starting to outweigh the possible negatives.
Now, let’s look at the age groups buying. Last year, only 25% of home buyers were classified as Generation X, or ages from 35-49. We should start to see more of this group entering the housing market. Millennials (those aged 34 and younger), made up about 32% of recent home purchases. They may be getting ready to trade up to a bigger house, as their starter condos/houses aren’t large enough for their new families. On the other hand, baby boomers will likely continue to downsize, selling big houses and moving into small housing developments and condos.
Four major trends that seem to summarize what most experts believe to be true. Interest rates will increase, but this small increase will only help stabilize the different markets, as seen in trends one and two, listed above. We are not in a bubble, people will continue to buy and prices will continue to increase slowly for the next few years. We are at a good time in real estate and should continue to see it improve. Just remember, you can make a good investment in any market trend - you make money on the purchase, not on the future predictions!

Thursday, December 17, 2015

Commercial Real Estate Market Activity Shows Signs Of Slowing In Q3


 Auction.com, LLC, the nation's leading online real estate marketplace, today released its Q3 2015 Commercial Real Estate (CRE) Market Monitor™, which reveals that CRE market activity is continuing to show signs of slowing and stabilizing after several years of run-up and appreciation. Total transaction volume across the five major CRE sectors dipped 6.5 percent on a quarter-over-quarter basis, sitting just 2.6 percent higher than one year ago — down from 24 percent higher in Q2. The slowdown in deal volume occurred amid the patch of U.S. economic softness in late summer, though the overall capital markets climate remains bullish. Cap rates continued to tighten and prices across all sectors maintained their ascent.

"A drop in sales volume back in Q2 signaled an unexpected shift in the CRE market after a very strong first quarter, and now we're seeing actual proof of a slowdown," said Auction.com Chief Economist Peter Muoio. "While all of the major sectors are still performing better than a year ago, CRE as a whole is feeling the pinch from recent shifts in the U.S. economy. Paced by a promising hotel sector, however, CRE pricing still remains on the uptick, even though that sector's price growth has decelerated over the past quarter and could cool in the immediate future."


Office and apartment transaction volume increased in Q3 as a share of the five sector total relative to the second quarter. While apartment deal volume climbed and pushed the sector's quarterly share 440 bps higher than its 10-year average, office volume was only slightly trailing its 10-year average. Retail and industrial shares of volume did not significantly deviate from historical trends, though the hotel sector saw a pronounced pullback in activity. That sector's share of total five sector deal volume shrank from at least 11 percent in each of the last two quarters to just 7.1 percent in Q3.

Sunday, December 13, 2015

Top 5 Real Estate Trends for 2016


The year is about to end but what do investors have to say about next year's real estate market? Nela Richardson, chief economist for Redfin, a national real estate brokerage firm, said that a rate increase won't be likely.



"Buyers now don't seem to be all that spurred or driven by a rate increase," Richardson said. "That lack of urgency will translate into next year's housing market. There's interest, but there's not a lot of inventory to buy," an article from US News reported.


"Buyers now don't seem to be all that spurred or driven by a rate increase," Richardson said. "That lack of urgency will translate into next year's housing market. There's interest, but there's not a lot of inventory to buy," an article from US News reported.
After that revelation, these top 5 real estate trends should be expected:
1.       Slowing coastal markets -- Ralph McLaughlin, housing economist at Trulla said that areas where the priciest homes are located (West Coast and Northeast areas) will see signs of slowing compared to the previous year. It is very noticeable in real estate markets in San Francisco, San Jose, Southern California and in the Northeast.


2.       Booming market areas in the South -- McLaughlin further speculated that areas like the metros of Winston-Sale and North Carolina will spark as buyers migrate to the south. Baby boomers and young investors will choose the south to escape the cold.


3.       Increase in suburban properties -- Svenja Gudell, chief economist from Zillow hinted that amenity-rich suburbs are more preferred than densely populated cities. Future homeowners are looking for better amenities such as easy access to commercial establishments, supermarkets, dry cleaners and other conveniences of suburban living.

4.       Increase in older first-time buyers -- people with growing families will now consider buying their own homes and those that are not too affected by the labor downturn may now think of buying next year. Millennials or those 34 and younger make up 32 perfect of the overall generational home buying trends from the National Association of Realtors.
5.       Increase in trade ups from millennials -- those that already own homes, condos or apartments may be thinking of trading up for a more spacious home to start their own families. But inventories may be reduced in most markets since other types of homeowners are looking for trade ups as well.