Thursday, February 25, 2016
Friday, February 19, 2016
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.
Thursday, February 11, 2016
After a December that was unseasonably balmy for a large swath of the East Coast, January saw a return to winter norms: frigid temperatures and mountains of snow (even in the drought-parched West, thanks to El Niño). Real estate markets around the country also followed the regular January pattern, according to realtor.com® data: fewer homes on the market, and those that are for sale move like semi-frozen molasses. But just like the seeds that are waiting to sprout once temperatures warm up (hey, is it April yet?), we’re seeing signs that buyers are getting ready to jump into the market this year when the time is right.
“Our initial readings on January affirm the positive growth we expect to see in the residential real estate market in 2016,” says Jonathan Smoke, chief economist of realtor.com. “Our traffic, searches and listing views exhibited the January ‘pop’ we saw last year, which made for a strong spring. In addition, a large number of prospective buyers have been telling us since the second half of 2015 that they plan to purchase in the spring and summer of 2016.”
For now, buyers have fewer choices than they will later in the year, but of course there’s also less competition. Smoke expects listing inventory for January to trend down 7% over December, following the usual winter pattern. The median age of inventory is now 100 days, which means it’s taking homes 6% longer to sell in January than in December, but that’s still 4% faster when compared with January 2015.
The median listing price for January is estimated at $227,000, remaining virtually flat over December, but still up 8% year over year.
By analyzing listing views and age of inventory in the nation’s largest markets, Smoke’s team was able to identify the top 20 that are beating the winter chill. Listings in these markets are viewed two to five times more often than the national average, and houses move 30 to 50 days more quickly than the rest of the U.S. They have also seen days on market drop by a combined average of 7% year over year.
San Francisco retains the first spot this month—again—as California maintains its dominance with seven of the top 10 markets. One surprise: Nashville is the biggest gainer, moving up six spots to end at No. 7. Also, Texas and Florida now feature multiple markets on the list. Overall, Florida real estate markets just keep getting hotter, and the state will give California a run for its money in 2016 as the warm-weather housing market to beat.
The Hot List
1. San Francisco, CA
2. San Jose, CA
3. Dallas, TX
4. Vallejo, CA
5. San Diego, CA
6. Sacramento, CA
7. Nashville, TN
8. Stockton, CA
9. Denver, CO
10. Los Angeles, CA
11. Santa Rosa, CA
12. Oxnard, CA
13. Palm Bay, FL
14. Yuba City, CA
15. Modesto, CA
16. Detroit, MI
17. Midland, TX
18. Santa Cruz, CA
19. Tampa, FL
20. Fort Wayne, IN
Friday, February 5, 2016
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 more
Millennials 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.
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.