Thursday, July 16, 2015

Housing Price Map Shows Bay Area Real Estate "Eating Up" US

The latest illustration of just how out of whack the Bay Area housing market is shows local counties overwhelming the United States map, when counties are drawn proportionate in size to their property values.

Real estate tracker and data enthusiast Max Galka created the cartogram map and other intriguing visualizations for his website Metrocosm.

“To create the map (above), I took the total residential property value for every county in the U.S. (the contiguous 48 states), and substituted those values for each county’s land area,” said Galka. “Notice what a small portion of the U.S. land area is actually covered by the red counties.”
Here’s a still image explaining how the colors equate to total residential property value:

As you can see, the Bay Area falls entirely within the $40 billion plus range.
Galka recently did similar mapping of property values by state. The above maps mirror those results in that the top five states in terms of property value greatly outweigh the other 43 contiguous states.
“About half of the total value comes from the top five states: California, New York, Florida, Texas, and Pennsylvania, respectively,” wrote Galka.

Things don’t show any signs of slowing down. In San Francisco alone, prices have shot up more than 30% in the last 2 years. Now, Bravo has announced that they will begin airing a reality real estate program called ‘Million Dollar Listing’ featuring Bay Area properties as the star. 

Wednesday, July 1, 2015

Lack of Inventory Could Drive Home Prices Higher This Summer

A lack of houses for sale has had two main effects: it has reduced the selection of homes that consumers can choose from while making those that are available more expensive than they might otherwise be.

Higher prices have had some positive effect, helping homeowners regain some lost equity, but the lack of inventory has mostly been a negative, keeping down the number of home sales.
That now appears to be shifting as's Advance Read on June Trends finds inventories are rising. It says that could lead 2015 to be the best year for housing since the bubble-peak year of 2006.

Rising rates a factor

“Factors lending themselves to the market’s upswing are the psychological effect of recently increased mortgage rates as well as the specter of the Fed raising interest rates later this year, said chief economist Jonathan Smoke. “Although demand has been strong all year, in June we’re finally beginning to see an uptick in supply as sellers become more confident about home prices.”

But the rise in home prices may be slowing – which you might expect with rising inventories – and that could have the short-term effect of spurring sales.

"What we're seeing is the passing of the baton, as mortgage rates begin to rise and incomes and household formation rates increase – from a stimulus-driven housing market to one driven by fundamentals," said Dr. Stan Humphries, chief economist at Zillow, a competing real estate site. "This transition from housing recovery to a more normal market is a good thing in the long-term, but we can expect some bumps along the way. In the end, increasing household formation and stronger income growth should be able to overcome the headwind of rising mortgage rates and return markets to health."

First time buyers are back says other demand drivers include an increase in the number of first time home buyers – many of whom are Millennials who previously had been held back by challenging market conditions. carefully analyzes its site traffic to monitor consumer behavior and is able to break it down along demographic lines. In June, it added a survey and found 65% of older Millennials said they intend to purchase a home within 3 months – an increase of 12% compared to just 6 months ago.
Smoke says the National Association of Realtors' announcement this week, which stated that May's pending home sales hit a 9-year high, joins a growing collection of optimistic indicators.
“All show both demand and supply improving, foretelling further gains this summer,” Smoke predicted.

Hottest markets still in California

Some areas are experiencing this improvement faster than others. Three of's hottest June housing markets are in California – San Francisco, Vallejo-Fairfield and Santa Rosa – and its Top 20 list includes 5 other California metros But the list also includes Detroit at number 9, Billings, Mont., at 14 and Ft. Wayne, Ind., at 20. Nationally, the median list price increased to $233,000, up 7% year-over-year and 2% over May.  

Thursday, June 11, 2015

20 of the Hottest Real Estate Markets in the US

The housing market is chugging ahead, with even higher home prices and more buyer activity—and in May, we’re seeing more than the ordinary seasonal uptick.

“On the demand side, we are seeing traffic and searches on® continue to set new highs,” said our chief economist, Jonathan Smoke, who did a preliminary analysis of our site’s data in May. Visits and searches are expected to be up more than 50% and 35%, respectively, year over year.
Helping create more opportunities for buyers, the listings inventory is now growing faster, at 4% over April—but it’s still down compared with last year, so buyers will need to keep on their toes. In part because of the limited inventory, the median list price increased nationally to $228,000, up 7% over the previous year and 1% over April. At the same time, homes are moving more quickly: Median days on market, now at 66, continued a sharp decline, down 11% year over year and 10% month over month.

Smoke’s team also ranked the nation’s 20 hottest real estate markets for buyers and sellers. Looking at the nation’s 300 largest markets, the team used the number of views per listing on to gauge demand, and the median age of inventory to assess supply.

California dominated the list, with half of the country’s 20 hottest real estate markets, because of its tight supply of homes and economic-powered growth in demand. San Francisco and San Jose maintain the second and third spots from the April rankings, while the state capital, Sacramento, leaped from No. 21 in April to No. 12 in May.

“Sacramento typically follows strong growth in Silicon Valley and the San Francisco Bay Area, as it is a relatively more affordable alternative,” Smoke said. “But this market has had strong employment growth above the national average and is seeing strong household growth as a result.”
Three states pulled off a two-fer on the list: Texas, with No. 4 Dallas–Fort Worth and No. 16 Austin; Colorado, with No. 1 Denver and No. 13 Boulder; and Michigan, with No. 9 Ann Arbor and No. 10 Detroit. These markets’ success also reflects economic-powered gains, but the Texas and Colorado story is more of a continuing saga that shows the resilience and diversified nature of the states’ economies despite the declines in oil. Michigan’s performance is related to economic recovery and very strong affordability.
Denver resoundingly maintained the top ranking as inventory there shaved six days off the median age while listing views grew 7% over April. Like Dallas, Denver is experiencing substantial economic growth, and the tight supply of housing is resulting in the fastest-moving inventory in the country.

The 20 Hottest Real Estate Markets in May 2015

MarketMay RankApril Rank
Denver-Aurora-Lakewood, CO 1 1
San Francisco-Oakland-Hayward, CA 2 2
San Jose-Sunnyvale-Santa Clara, CA 3 3
Dallas-Fort Worth-Arlington, TX 4 4
Vallejo-Fairfield, CA 5 5
Boston-Cambridge-Newton, MA-NH 6 6
Santa Cruz-Watsonville, CA 7 8
Santa Rosa, CA 8 7
Ann Arbor, MI 9 9
Detroit-Warren-Dearborn, MI 10 11
San Diego-Carlsbad, CA 11 10
Sacramento-Roseville-Arden-Arcade, CA 12 21
Boulder, CO 13 17
Fargo, ND-MN 14 12
Los Angeles-Long Beach-Anaheim, CA 15 15
Austin-Round Rock, TX 16 14
Oxnard-Thousand Oaks-Ventura, CA 17 13
Manchester-Nashua, NH1831
Columbus, OH1922
Stockton-Lodi, CA2038

Tuesday, June 2, 2015

Rental Rates Outpace Home Appreciation

Buying a home is already far more affordable than renting one, and that imbalance could worsen as rents outpace home values for the first time in years.

In April, rents nationally rose an average of 4 percent compared to home values increasing by just 3 percent year-over-year, according to new data from Zillow.

One result: Renters who were considering buying are now taking that first step.
“We finally have more buyers who are serious now,” said Cyndi Mino, an agent with First Team Real Estate Agents in Huntington Beach, CA. “Landlords are raising rents ridiculously high, and people are saying, ‘That’s it — it’s time to buy.'”

In Mino’s area, first-time home buyers are finding 2-bedroom condos for $350,000 and 2-bedroom town homes for about $450,000.

Although millennials are expected to be the largest home-buying group in 2015, many first-time buyers are older, Mino said. “They never thought they would or could buy, but with rents going up, if they can save enough money to buy, they’ll pay less for a mortgage [than for rent].”
The last time this happened, it went on for a while — but the situation was considerably different.
In the wake of the housing bust, home values declined before rebounding. Rents, maintaining steady growth, easily stayed ahead.

That changed in April 2013, when home values finally heated up enough to pass rents. By April 2014, home values were sprinting at 8.8 percent year-over-year, while rent gains remained steady between 2 percent and 3 percent on an annual basis.
Now home values are cooling off, while rents pick up a little — and that’s enough for the tortoise to pass the hare.

Wednesday, May 13, 2015

Bay Area Home Prices Up, But Not Everyone Wants to Cash In

We already knew prices had skyrocketed in New York City, San Francisco, and Honolulu. But it turns out plenty of other metro areas are seeing a serious rise in home prices, according to a report on Monday from the National Association of Realtors®. The news might put a little spring in a seller’s step—and a lot more fear in a buyer’s heart.

Prices in many markets have been rising since 2011, but NAR’s latest quarterly report shows that “the number of areas experiencing double-digit price appreciation doubled compared to last quarter.” In the first quarter of 2015, 51 metro areas saw double-digit increases, up from 24 in the fourth quarter of 2014.

Though price increases weren’t recorded everywhere—14% of the areas it measured showed lower median prices—single-family home prices rose in 148 out of the 174 markets it measured.
The reasons? The usual stuff: low interest rates and the pale supply against the bold demand. With the threat of higher interest rates looming, and national median income on a slow uptick, says NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, AR, “more consumers are feeling confident about their financial situation and looking to lock in before rates eventually start to climb.”

That doesn’t mean the price incline will continue. Lawrence Yun, NAR’s chief economist, says it’s possible prices in some of these newly and rapidly more expensive areas could level out, “unless housing supply markedly improves and tempers its unhealthy level of growth.”
The national median price of an existing single-family home rose 7.4% from a year ago, from $191,100 to $205,200. But total existing-home sales (that’s single-family and condo) declined 1.8 % to a seasonally adjusted annual rate of 4.97 million in the first quarter, from 5.06 million in the fourth quarter of 2014.

On Not Cashing In

One phrase that leapt out at us in the NAR’s press release was “subpar homebuilding activity.” That’s Yun’s way of describing an odd predicament that homeowners are finding themselves in: Though they’re enjoying their rise in household wealth, says Yun, some “are hesitant to move up and sell because they aren’t confident they’ll find another home to buy.” And that, he says, is “leading to the ongoing inventory shortages and subsequent run-up in prices seen in many markets.”

The five most expensive housing markets in the first quarter were par for the course: San Jose, CA, metro area, with a median price of $900,000 for an existing single-family home; San Francisco, $748,300; Honolulu, $699,300; Anaheim-Santa Ana, CA, $685,700; and San Diego, $510,300. In 61 metro areas, condo prices rose, too, up 1.5% from the first quarter of 2014 to $193,500, from $190,600.

The lowest-cost metro areas were largely concentrated in the Midwest or mid-Atlantic states. In the Youngstown-Warren-Boardman, OH, area, the median single-family home price was $64,300. In Cumberland, MD, it’s $71,600; Rockford, IL, $78,600; Decatur, IL, $82,200; and Toledo, OH, $83,800.

The trends shifted significantly by region, and the West and Northeast are still the most expensive places to live. While existing-home sales in the Northeast dropped 11.2% in the first quarter, they remained 2.2% higher than the first quarter of 2014. In the first quarter, the median existing single-family home price rose 2.4%, to $245,000.

In that same quarter, existing-home sales declined 2.0% in the Midwest, yet they’re still 6.3% higher than the year before. The median existing single-family home price there rose 8.9% to $156,600.
In the South, existing-home sales fell a wee 0.5%, but that’s still 7.8% above the first quarter of 2014. The median existing single-family home price there was $182,300, 8.2% more than the year before.
In the West, existing-home sales rose 1.5%, 5.4% more than a year ago. The median existing single-family home price there increased 5.8% to $295,500—the most expensive in the nation.

Sunday, May 3, 2015

Bay Area Real Estate Outpaces Nation in Sales Volume

In case more evidence was needed that the Bay Area offers a real estate market insanely favorable to sellers (and just plain insane for buyers), Trulia announced Wednesdaythat “the SF, SJ, and Oakland metro areas [are] the fastest moving markets in the nation.”
With historic low inventory continuing across the nation, buyers aren’t waiting to jump on available homes, which means a trend of fewer days on the market (DOM). But this trend is most dramatic in California—the Bay Area most dramatic of all.  Trulia reports that “among the 100 largest U.S. metros, 8 of the 10 fastest-moving housing markets are in California, and homes are selling much faster there than in the rest of the country.”
Just looking at the last two months exemplifies this finding. Out of all the homes listed in February, 2015, only  30% of homes for sale in the San Francisco Bay Area are still on the market this April, vs. 70% of homes in Long Island and Albany, NY metros.  The Bay also commands the top 3 highest median asking prices among the 10 US metros enjoying the lowest DOMs.

Saturday, April 18, 2015

Bay Area Real Estate Prices Spike Early in 2015

The Bay Area's hot economy and the limited number of properties for sale have pushed the median price for Santa Clara County homes to a record high, $879,000, and the rest of the region is not far behind.

Prices Climb

Median sale prices in Alameda County climbed to $665,000 in March, a hair below the 2007 peak of $669,500, according to data released Friday by real estate information service CoreLogic. After hitting a new peak of $1,060,000 in February, prices in San Mateo County dipped slightly to $995,000 but that mile-high figure still represented nearly a 5 percent increase over the year before. Contra Costa County prices climbed as well, to $470,000, a 10.6 percent increase.

It's a sellers' market everywhere, but Silicon Valley is leading the pack.

"It feels like a standard Silicon Valley spring: challenging," said James Yang, a Palo Alto-based agent with the Sereno Group. "It's been consistently crazy for the last four or five years -- multiple offers, bidding over the list price, a consistent pattern. If there are 10 offers on one home, those nine others are going to continue to shop. And if you got beat out at $2.5 million, there's kind of an understanding of where you need to be the next time."

March sales increased by 19.5 percent from a year ago in Santa Clara County and by 24 percent in Contra Costa County. But the sales volume dipped by 3 percent in Alameda and 2.1 percent in San Mateo Counties. Taken as a whole, the nine-county Bay Area saw a 10.3 percent increase in sales.

"For those looking for a higher sales volume, this is an encouraging sign," said CoreLogic analyst Andrew LePage. "So far, we're doing better than last year. But inventory is still tight" as the market moves into the spring season.

Last month's sales volume for all kinds of homes was still 19.6 percent below the March average going back to 1988, when the service began compiling data. "To support a more normal level of sales, we're going to need more inventory."

That limited supply is making it tough on buyers.

A year ago, Paul and Irene Goh of San Jose sold their townhouse, moved into an apartment with their three children and began the hunt for a house.

"In this one year, we went to open houses every weekend and probably looked at over 100, maybe 200 houses," said Paul Goh, a software engineer. "After losing three or four times, it gets more and more depressing. Sometimes you don't lose by a small margin -- you lose by $300,000 or $400,000, so you get some sense of your competition."

They bid on nine houses and lost every time.
On March 23, a 1,600-square-foot, four-bedroom house with a detached office came on the market for $959,000 in San Jose, near Campbell. They saw it March 26, bid $1,120,000 that night and the next day went to the Santa Cruz Mountains to pray. Hours later, their agent called: offer accepted.
"We're finally done with open houses, and so are our kids," Irene Goh said.

Stories like that of the Gohs abound throughout the Bay Area as buyers compete.
"You have some areas where you've had higher sales and some areas with fewer sales, although the pricing is almost 100 percent all increasing," said Jennifer Branchini, past president of the Bay East Association of Realtors. "Very interesting market. Every one says, 'What's the best time to buy? What's typical of this market?' There's nothing typical anymore. We're in completely different waters."

Buyers have to be willing to act quickly and overbid.
East Bay natives Chris Olesiewicz and June "JD" Dulfer, who met while attending UC Santa Barbara, and work in the tech industry on the Peninsula, have been renting a one-bedroom apartment in Foster City for $2,500 a month. "After we got engaged," Olesiewicz said, "we began watching the markets and every year it was just going up and up and up."

Their challenge: finding something that fit their budget, for $800,000 or less.
They got married March 14, took off for a honeymoon in Paris, and returned March 26. The next day, their agent, Alex Wang of the Sereno Group in Palo Alto, showed them an 870-square-foot, two-bedroom house in Menlo Park's hot Belle Haven neighborhood, near Facebook's headquarters. The cost: $450,000. Even with a 1940s kitchen and 1980s-era popcorn ceiling, the couple bid $600,000, and their offer -- one of five for the off-market sale -- was accepted in a day.
"We didn't even know how to comprehend it when Alex told us," Olesiewicz said. "We're still not sure it's real."

Nothing seems easy in this market.
Peter and Meredith Estremo of Livermore sold their house last month to one of 13 bidders and then had to find a new home within 60 days. An over-the-ask bid, an information sheet about their family dreams, a bottle of wine and a dog toy did the trick and their offer was just accepted.
"I'm kind of waiting for the other shoe to drop," Meredith said. "We're ready to close next week."