Wednesday, April 27, 2016

5 Tips for Buying or Selling a Home in 2016

Buying or selling a home in 2016 can be both easier and harder than it’s ever been. For first-time home buyers or sellers, there is a lot to navigate. This is especially true for millennials, who are beginning to come out of their economic shells, get married, start families and buy their first home.
Buying or selling a home is easier because there are an incredible array of tools and websites to help you do it. In-depth information on homes, neighborhoods, prices, school districts, etc. helps to give you a full picture.
However, it’s also more difficult. There is so much readily accessible information that the average home buyer or seller can get caught up in “paralysis by analysis.”
Taken together, you’ve got a recipe for confusion and frustration.
But it doesn’t have to be this way. By avoiding these five common home buying or selling mistakes, millennials — and every other group of home buyers and sellers — can successfully tackle the real estate market.
Mistake #1: Assuming the real estate process is the same as when your parents bought their house
Not too long ago, the only way to buy or sell your home was to work with a real estate agent. That’s how your parents did it and their parents before them and so on. So why wouldn’t that be how you do it?
The answer is easy. You are most likely already working in a self-directed manner. If you visit real estate websites to see what’s for sale in your neighborhood, share a listing with a friend or ogle pictures of your dream house online, you’re gaining information that was until recently closely guarded. The California Association of Realtors® reported in 2015 that home buyers are spending approximately four and a half months searching online.
There’s still definitely a place for the full service agent experience. But there are also a growing number of options where you can handle parts of the home buying or selling process that you’re comfortable with on your own using online tools and then access expert advisors when you need help with the trickier parts of the transaction, saving you thousands in commission along the way.
Consumers, especially millennials, are gravitating toward this approach. They instinctively understand it because it follows the unbundling trends we’ve seen in other industries, like people doing their own taxes or trading their own stocks.
Mistake #2: Forgetting that you can actually do a lot of this yourself — and save some money along the way
Many people, especially first-timers, don’t realize that when it comes to selling your home, there is a lot you can handle yourself. You can create your own listing, upload pictures of your house, set the price (with a little bit of comparative market research) and handle the showings. You can even conduct a lot of the negotiations yourself.
Remember, a seller’s agent typically charges six percent commission of the asking price of the home. (Half the commission is paid to the buyer’s agent.) On a $300,000 house, that’s $18,000. Sellers need to understand what the agent’s services include to determine if these are tasks they could do on their own to save a buck — for example, setting up the listing, getting the home on the Multiple Listing Service (MLS) boards where housing inventory is shown and perhaps managing some showings.
Instead of shelling out that six percent, take advantage of new online real estate options. There are brokerage services that will help you get your home on the MLS boards and more for a flat rate. Then you can decide how much more you want to take on or outsource. You are better prepared to do more in the real estate game than you might realize.
Mistake #3: Flying blind when it comes to pricing and neighborhood stats
When you’re buying or selling your home, which can easily be the largest financial transaction you’ll make in your lifetime, it’s not the time to take a dartboard approach to pricing. You need to do your homework.
Fortunately, there is a huge amount of information available on home pricing, neighborhoods, school systems — basically, everything you care about is easy to research. This is a moment where your Internet browser can be your best friend. Any of the major online real estate sites have pricing tools and deep information about trends. It also makes sense to read up on the neighborhood in the local papers and visit open houses of competing homes to make sure you’re pricing your home properly or making an appropriate offer. An informed buyer or seller is a smart one, and today consumers and pros have access to essentially the same data.
Mistake #4: Assuming you should buy at the asking price or, if you’re the seller, take the first offer you get
You might not be a born negotiator, and that’s OK. Many people are uncomfortable with the give-and-take of negotiation and feel unsure about how to approach it. For them, this is a time to work with a professional. Hedge your bets and choose the real estate service that gives you expert advice or help when you want it. For many others, getting through the negotiation to buy or sell a home is not really that difficult — as long as they’ve avoided Mistake #3 and know plenty about the pricing dynamics and trends in the area. Know the facts on comparable sales and competing inventory. Remove emotions from negotiations. And determine your highest/lowest price before you begin negotiations.
Mistake #5: Getting overwhelmed by the process (because it isn’t really that complicated)
This is the most important mistake of all to avoid.
The truth is that you can do this. Millions of people already are. In fact, 45 percent of home buyers say they alone found the property they purchased, according to the California Association of Realtors. And about one-third of real estate consumers no longer use full-commission or traditional listing agents, according to the National Association of REALTORS®. These consumers are choosing ways to buy and sell homes that offer greater choice over the professional services they want to pay for and greater savings if they decide to take on more of the process themselves.

Monday, April 18, 2016

Market Update: It's a Seller's Market

Real estate agents that sell houses in La Jolla, Pacific Beach, Point Loma and Ocean Beach say that now it is a seller's market. It is a great time to sell because many buyers are looking for a house and there aren’t that many houses listed. 

“If a house is market-ready, clean and neat and has a good location, it sells fast. Many families don’t want to renovate a lot before they move in, so they buy a house that is ready to move in,” says real estate agent Michelle Serafina.

Agents Tony Franco and Lionel Silva note that the hot buying season has been early. It started already in December, although it usually is in March to June.

In 2015, the prices were at the same high level as in 2007, and now the prices have steadied. Buyers are active, but they don’t buy anything. Some sellers check what other sellers in the same area have gotten and try to get their prices higher. Agents note that buyers are smart and that they notice when a house is overpriced.

Interest rates are also quite low, so people are willing to take a loan on a house. Some people also buy houses now with cash.

“One out of 10 deals I sold, a buyer received a loan. That also saves buyers money. For many years, people invested in the stock market, and after that, they are now willing to put the money for a house or apartment,” says Franco.

Listing agent Chris Mannerino says there will be a correction in the prices at some point.

“Nobody knows how shortly markets change, because global events are usually a chain reaction. But banks don’t give out house loans so much than they used to, so some kind of bubble with loans is avoided for the most part,” he says. 

Lionel and Tyler Silva say that during the last 12 months, rents have raised 20 percent or more, so families that rent want to buy a house. Meanwhile, Michelle Serafina says families are paying attention to comfort.

“They want quality of life: a house that is in good shape, large yard, space that they need and short distance to schools,” she notes.

Agents say that some homes are now sold even before listing. Lionel Silva notes it’s not always wise to sell a house that way.

“Why would you sell before every potential buyer has seen it?” he notes. “With more buyers competing, it is possible to get the price that you want, or even more.”

Friday, April 1, 2016

US Cities With the Fastest Growing Rent Increases

The cities with the fastest-growing rents in the U.S. probably are not the ones you’d expect. That’s because they’re not the most expensive cities for a renter to live in (e.g., San Francisco, New York City, Washington, DC). Instead, rents are shooting up in places that seem like bargains compared to those high-priced metropolises ($3,550 for a one-bedroom, San Francisco? Really?). But if they keep up the pace—and they probably will—these cities won’t be bargains for long.

Rents rose 2.7% across the country in March compared with a year earlier, according to Apartment List, which analyzed its own data for the report. That brought the median rent of a one-bedroom apartment to $1,150 and a two-bedroom to $1,300.

And they jumped the highest year over year in Colorado Springs, CO. Rents in the fast-growing city, about an hour away from Denver, surged 11.4%, according to the report. That brought the median rent for a one-bedroom to $790 and a two-bedroom to $1,010.

“Rents are going to continue to increase very quickly,” Andrew Woo, data science manager at Apartment List, says of the Colorado city as well as other fast-growing towns. “There are so many millennials moving there. They’re really attracted by the quality of life there and strong employment opportunities.”

Colorado Springs may have the biggest annual rent hike, but these other cities weren’t far behind:

1. Orlando, FL: 8.9%

2. Providence, RI: 8.7%

3. Tampa, FL: 8.6%

4. Vancouver, WA: 7.3%

5. Reno, NV: 7.3%

6. Salt Lake City, UT: 7.2%

7. Austin, TX: 6.7%

8. Portland, OR: 6.6%

9. Fort Wayne, IN: 6.4%

It’s gotten so nuts in Colorado Springs that a day after local real estate agent Monique Allison-Vollmer put up a listing for a rental house in a good school district, she received 15 phone calls and 30 emails.

“It’s overwhelming,” says Allison-Vollmer, at Keller Williams Partners.

She blames the housing bust for the pinch. New development stalled in the aftermath of the financial crisis, when builders struggled to secure financing. It didn’t pick up until a few years later—leaving the city without enough homes to go around now that people are flocking in.

The large military community (nearby Fort Carson and the U.S. Air Force Academy) as well as the state’s legalization of marijuana (drawing not only stoners but also those in need of its medical benefits) have also proved to be big draws, she says.

“I’ve had several [people] call me and say we’re looking for rentals in the area because of the marijuana laws,” Allison-Vollmer says.

In Orlando, the jump in prices can at least partly be attributed to a high number of foreclosures turning homeowners into renters, says Ken Anderson, a local landlord and real estate broker at ApexOne Realty.

There is also a steady influx of new residents moving into the home of Disney World, drawn to its attractions, golf courses, and year-round warm weather, he says.

Many smaller landlords, who rent out just a single unit or property, are keeping prices steady because they don’t realize what people will pay to live there, Anderson says. But savvier property managers have begun to jack them up.

Since October, Anderson has begun to raise rents by about 10% on his nearly two dozen rental homes.

“And I’ve been getting [them],” he says.

The median monthly rental price in the Florida city is $980 for a one-bedroom unit and $1,110 for a two-bedroom apartment, according to the report.

Despite the hikes, putting a roof over one’s head was nowhere near the heights of San Francisco or New York City, where a one-bedroom rents for $3,300. In nearby Jersey City, NJ, it’s $2,550. Boston, at $2,500, and the Silicon Valley city of San Jose, CA, at $2,200, rounded out the top five most expensive cities to find a one-bedroom apartment.

Thursday, March 24, 2016

Lack of Inventory Blamed for Pending Homes Sales Decline

Low inventories and eroding affordability coupled with financial market volatility contributed to a second consecutive month of year-over-year declines for pending home sales statewide, CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Pending home sales data:
  • Statewide pending home sales fell in February on an annual basis, with the Pending Home Sales Index (PHSI)* decreasing 0.4 percent from 121.4 in February 2015 to 120.9 in February 2016, based on signed contracts. 
  • On a monthly basis, California pending home sales increased 26.4 percent from January, well above the long-run average increase of 15.9 percent typically registered from January to February based on data collected between 2009 and 2015. Even after adjusting for typical seasonal factors, pending sales still rose 6.3 percent over January despite remaining below February 2015 levels. 
  • C.A.R.’s 2016 housing market forecast, released in October 2015, calls for a slightly slower pace of sales growth in 2016 than California experienced last year. Current pending sales figures suggest that tight inventories could begin to weigh more heavily on sales in coming months.
  • Regionally, pending sales increased significantly in month-over-month comparisons, but varied in year-over-year changes.
  • San Francisco Bay Area pending sales rose 36.3 percent from January to reach an index of 145.2 in February, up from January’s 106.5 index but down 13.6 percent from February 2015.
  • Pending home sales in Southern California declined 1.3 percent from February 2015, but increased 28.7 percent over January 2016 to reach an index of 97.7. 
  • Central Valley was the only region to see pending sales rise both year over year and month over month, which suggests that tight supply and affordability will continue to push more activity to less constrained, more affordable areas of the state. Pending sales in the Central Valley region rose 20.2 percent from January to reach an index of 87.5 and increased 6.7 percent from February 2015’s index of 82. 
Year-to-Year Change in Pending Sales by County/Region
 Feb. 2016
 Feb. 2015
 Year % Change
 Los Angeles
 San Francisco
 Santa Clara
 SF Bay Area
 So. CA
 Central Valley

Tuesday, March 15, 2016

4 Trends That Are Shaping the Future of Real Estate

The realty sector is a dynamic industry that is quickly adapting to the world of networking. Everything is interconnected and participants in this sector should not overlook developments happening within the property market, and more importantly, those happening in other economic markets as well.
According to the 37th edition of Emerging Trends in Real Estate, a publication that discusses trends as well as forecast developments and investments in the realty sector developed by Pricewaterhousecoopers (PWC) and the Urban Land Institute (ULI), some of the leading forces that are continually interacting are technology, globalization, demography and urbanization. In the realty sector, a small miscalculation during execution or an attention lapse can end up foiling the best executed plan.
This makes it necessary to consider all trends, without isolating any, because adaptation is important in gaining the competitive advantage and surviving the industry. That said, here are four trends that will shape the future of realty in 2016:

1. Rising Investment Outside Gateway Cities

There is a growing number of 18-hour cities across the United States, including San Diego, Austin, San Antonio and Denver. These cities were featured among the top 10 entrepreneurship markets in a study conducted by the Kauffman Foundation in 2015. They are also in the 2016 Emerging Trends’ Top 20 Real Estate Markets for development and investment.
This year, there has been a growing confidence among real estate investors in the potential of markets outside the mainstream 24 hour cities to generate good returns. This potential is increasing the desire to invest considerable amounts of capital in appealing markets located outside the traditional gateway cities. Local and international investors are broadening their investment interests as they take a look at the real estate market within the US. Four major factors fueling this trend are the strengthening of macroeconomic performance in the US, moderate compression of cap-rate, investor demonstration of risk tolerance and the unstoppable expansion of data.

2. Employment Rates will Continue to Increase Demand for Office Space

Real estate continues to benefit from the growing employment opportunities as the rate of employment grows by over 2.9 million each year since 2014. In July of this year, job opportunities grew by 2.1%. The gains of these employment rates are now spreading to different metro areas, with Los Angeles, New York, Dallas, Northern New Jersey and Fort Worth taking the lead in this shift. Uptake of office space has been fast in both suburban and central business district areas, reducing vacancy spaces by 90 points and raising rent by 2.9% each year.
This trend will continue in 2016 as entrepreneurial businesses often viewed as key to vibrant local economies continue to contribute to changes in their office floor plan to adapt to their special needs.

3. Rising Prices in Gateway Markets will Continue Creating Opportunities in Suburbs

Suburbs will continue to attract more investments as prices in major gateway cities continue to rise, according to the Emerging Trends 2016 report. While about 37% of millennials prefer to live in downtown areas of denser cities, most baby boomers prefer the suburbs. The generation Ys are following the baby boomers to suburbs during their child rearing years.
A survey conducted by ULI shows that six out of 10 respondents from generation Y hope to live in separate single family homes over the next five years. Interaction between homes and jobs is the major factor that influences the growth of suburbs. Since 2002, jobs have been growing at a higher rate in US metropolitan areas compared to the surrounding suburban areas. While this trend has reflected in big cities like San Francisco and New York, it has also been happening in cities such as Oklahoma, Philadelphia, Milwaukee, Nashville, Portland and Austin. Access to expanding job opportunities is a major factor in the future growth of suburbs. Location matters when it comes to real estate deliberations. Trends in residential options over time will be shaped by the growing job market.

4. The Real Estate Sector will Strive to Provide Affordable Housing for All

Workforce housing and affordable housing options are also considered important by consumers. The pressure for these products is already there and continues to build. Though voters will want to push politicians to take action, it is the creative ideas applied by savvy real estate players that will determine which of those actions will be active. However, proactive trends that get ahead in the housing industry will be adopted in 2016 as these will be helpful for the industry. This will mean coming up with products that target people in different income brackets. Such products will range from rental, to ownership to rent-to-own properties.
Individuals and families wanting to build their own homes can take out loans to do so. You can also take out loans to improve your homes, or consolidate your loans to better manage your finances. You can visit as many online sites to evaluate the loan offering - in terms of amount, interest rate, repayment term, approval time and more - before filing the application. For UK residents, you can look at Secured Loan Expert. The site offers free quotes, help and expert advice. You can take a secured loan as much as £10,000 to £2,500,000 (more by referral), the final amount contingent on your equity, with low interest rate and a flexible repayment terms from 3 to 30 years. You can easily get your secured loan in four simple steps. You can also seek Money Advice Service, a site set up by the UK government, to help people manage their money, and make the most out of it.

Thursday, February 25, 2016

What Could Happen if the Bay Area Tech Bubble Bursts

There are signs that the red-hot tech scene is slowing down in Silicon Valley.
Some analysts are predicting a major crash is on its way later this year. But others are optimistic that lessons were learned during the dot-com bust in 2001.
Venture capitalists are starting to close their wallets and not invest in tech. Real estate analysts are warning the rate of growth for the housing costs in the Bay Area has surpassed where it was at right before the dot-com bust in 2001.
So the big question, are we heading for a devastating bubble pop? Or are we heading for a less-scary slowdown?
“There is definitely a real sense of fear that is out there, and when fear is there, the opposite of optimism, then certainly venture capitalists and any other sort of backers are going to put the brakes on, and they are going to go slower and they’re going to lend less money,” tech financial expert Erica Sandberg said.
Layoffs and the extreme fall of some tech stocks are spooking investors.
LinkedIn stock is 50 percent down from where it was in November. Twitter is down 62 percent over the last year.
Twitter is in big trouble. They are laying off 8 percent of their workforce. And for the first time, it is not gaining any users. It is losing people.
In the last three months of 2015, Twitter lost 2 million users.
Yahoo is also in really bad shape. It has announced it is laying off 15 percent of their workforce. That is around 1,700 people.
HP has laid off 33,000. And Microsoft laid off 7,800.
And now smaller, hot tech companies are also feeling the pain.
GoPro, Instacart, Autodesk, and Yelp are laying off workers.
“This kind of confluence of different events happening that don’t spell unbridled growth…in 2016,” USA Today San Francisco Bureau Chief Jon Swartz said.
Swartz wrote an article for USA today about how “the hour of reckoning is coming for tech.” And it’s gotten a lot of buzz.
“ I think you’re going to see more belt-tightening than we have before,” Swartz said. “It’s not going to be this unbridled growth and stratospheric valuations that have been dominating tech for so long.“
“It sounds so dramatic to say a big bubble pop,” Sandberg said. “But it’s definitely a slowdown. And that is a fact. It is happening. People are losing their job and companies are not hiring as aggressive as they were before. So, it’s a definite change.”
Jon, Erica, and other tech analysts Gabe talked to said there will not be a fierce bubble pop like 2001. It will be a slow down.
Lessons were learned with the dot-com bust and things are different now.
“Now, you have a much larger audience online. You have 3 billion people versus half a million back then,” Swartz said. “You have a lot more real profitable businesses. The mobile phone revolution, the use of apps have all kind of led to a really strong Internet economy. All I’m saying is what you are going to see is probably scaling back of what has been going, which was not sustainable to begin with.”
“Are lessons learned? Some yes some no.,” Sandberg said. “I have absolutely no faith that everybody is going to go, ‘Well, we’ve learned so much the last time, and now we are not going down that path again.’ That’s not necessarily true. But what is true is that people have this memory. We remember what it was like when jobs were scarce.”
And we all need to be prepared for that–jobs being scarce. So, from what Gabe learned, unless there is another major terrorist attack or a foreign market collapsing, there will not be a dramatic bubble pop with a different company closing its doors every day. But, this slowdown will affect the job market and layoffs will continue.
It will be harder to get a tech job in the Bay Area, or keep the one you already have.
Thursday night at 8 p.m. Gabe will cover that part of the story–how this all will affect jobs.
And he will have some good advice to share for people looking for tech jobs, or entering the tech workforce.

Friday, February 19, 2016

San Francisco Real Estate Market Poised for Cooling

Nina Hatvany has worked for 25 years in San Francisco as a real estate agent concentrating on the high end of the market. Today, as a result of a reeling stock market and concerns about global economic stability and growth, the conversation with well-heeled clients has turned decidedly more cautious.

"I have a number of buyers who are just more hesitant," Hatvany told CNBC. "They look and they talk and then they start arguing with me about the slow IPO market and overvalued unicorns. I feel like I have to argue with them about how nice the house is."

As technology stocks slide — the Nasdaq is down 15 percent this year — and private tech valuations suffer, real estate brokers say the feverish clamor for high-end homes in San Francisco has quieted.

"Somebody who might have pulled the trigger at $5 million last year now might be a bit more cautious," said Josh McAdam, a top producing real estate agent with Pacific Union in San Francisco. "It's not the same environment."

McAdam is quick to note that demand remains strong for homes selling in the $1 million range. But the high-end residences in the City by the Bay, if they are to attract buyers, now need to boast all the right finishes, he says.
For example, McAdam said only one home in the tony neighborhood of Noe Valley last year sold for over $5 million. The year before, he says a handful of homes sold in that price range and a couple even above $5 million.

Hatvany confirms the same trends. In the second quarter of last year, her firm said, 18 homes sold in San Francisco for $6 million or higher. That number dropped to nine in the fourth quarter.
One question: Will the more cautious tone now defining the ultra-high-end of the market spread to other price points?
Christopher Palmer — an associate professor at the Haas School of Business at the University of California, Berkeley, who specializes in the housing markets — said the biggest threat to price appreciation is a downturn in tech because so much of the Bay Area economy is reliant on the sector.
"Tech stocks have taken a beating in the past few months, and every time there is a stock market correction, people start to wonder if the spigot of capital that has fueled so much Bay Area growth is about to be turned off," Palmer said.