Real Estate News


The $873,681 average home sale here was up 9 percent year-over-year, amounting to the second-highest average sales price in market history.

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Alameda County saw its floodgates open in terms of high-end sales following the 2016 election much like San Francisco and Mid-Peninsula. The $873,681 average home sale here was up 9 percent year-over-year, amounting to the second-highest average sales price in market history. Q4 2016 also marked the seventh-consecutive quarter in which Alameda County bested the $800,000 mark, providing a strong and stable selling platform for 2017. The 2,438 homes sold here was down just 2 percent from the previous year—nowhere near a large enough gap to offset the quarter’s massive average sales price gains. As in most Bay Area counties, the average 26 DOM here marked a subtle slowing of sales pace.
alameda2AVERAGE SALES PRICE BY CITY – THE TOP 10
Piedmont capped a year of strong upward growth with a $2.15 million average home sales price, up 14 percent from Q4 2015. Oakland also showed an impressive 11 percent gain—very much in line with its 10 percent gain for the 2016 fiscal year.
alamedatop10SALES PRICE CHANGE
Homes that required no price change netted 107 percent of initial asking price. This was the strongest gain among all seven Bay Area counties. Meanwhile, when sellers tested the market they were able to recover 93 percent of their initial listing. Both of these figures point to a market that is squarely in favor of sellers at the moment.
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DOWNLOAD THE MCGUIRE QUARTERLY REPORT.
mcguire-q42016-facebook-banner-851x315FIND Q4 2016 MARKET UPDATES FOR EACH COUNTY AT MCGUIRE.COM/QUARTERLY_REPORT

Signs point to another good year for the housing market, although the recovery most likely won’t clock the same breakneck speed as last year.

Here are 5 predictions, made by experts in the field, to help prepare you for any home-selling or buying activities this year:

5 Predictions

ImprovingMarkets

By NICK TIMIRAOS

You can read the original story here.

Pending-home sales in March hit their highest level since April 2010, spurring the return of real-estate bidding wars. Nick Timiraos reports on The News Hub. Photo: Peter Earl McCollough for The Wall Street Journal.
 
 
 
 

A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back.

From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today’s are a result of supply shortages.

“It’s a little surprising because we thought bidding wars were done with,” said Andy Aley, who is looking to buy his first home in Seattle’s Beacon Hill neighborhood. The 31-year-old attorney was outbid this year when he offered up to $23,000 above the $357,000 listing price and agreed to waive inspections and other closing conditions.

Competitive bidding in the current environment isn’t producing huge price increases or leaving sellers with hefty profits, as occurred during the housing boom. Still, the bidding wars caused by tight inventory provide the latest evidence that housing demand is starting to pick up after a six-year-long slump.

An index that measures the number of contracts signed to purchase previously owned homes rose in March to its highest level in nearly two years, up 12.8% from a year ago and 4.1% from February, the National Association of Realtors reported on Thursday.

“We very much believe we’ve hit bottom,” said Ivy Zelman, chief executive of a research firm, who was among the first to warn of a downturn seven years ago. Earlier this week, she raised her home-price forecast for the year, calling for a 1% annual gain, up from a 1% decline.

The Wall Street Journal’s quarterly survey found that the inventory of homes listed for sale declined sharply in all 28 markets tracked. Real-estate agents consider a market balanced when there is a six-month supply of homes for sale. At the height of the housing crisis, in 2008, there was an 11.1-months’ supply. In March, there was a 6.3-months’ supply.

Inventory levels in many markets were at the lowest level in years. At the current pace of sales, it would take just 1.5 months to sell all the homes listed in Sacramento, Calif., and 2.4 months to sell all the homes listed in Phoenix. San Francisco and Washington, D.C., each have 3.4 months of supply, while Miami has 4.1 months of supply.

Other markets have plenty of homes. Chicago, for example, has 9.4 months of supply, while New York’s Long Island has 16.1 months of supply. Even in those markets, the number of houses for sale is edging down.

Increased competition is frustrating buyers and their agents. “We’re writing a record number of offers, but we’re not seeing a record number of closings and that’s because it’s so competitive,” said Glenn Kelman, chief executive of real-estate brokerage Redfin Corp. in Seattle with offices in 14 states.

Nearly 83% of offers that Redfin agents have made on behalf of clients in the San Francisco Bay area this year and 71% in Southern California have had competing bids. Redfin represented a buyer that made the winning bid on a Gaithersburg, Md., home earlier this month after agreeing to adopt the dog of the seller, who was relocating and looking to find a new home for “Buddy,” a white toy poodle.

Inventories are declining for a number of reasons. Some sellers, unwilling to accept prices that are still down from their peak by one-third, are taking their homes off the market in anticipation of higher prices down the road. Meanwhile, investors have been outmaneuvering consumers for the best properties, often making cash offers that are quickly accepted by sellers.

In addition, some economists say that inventory levels are being held artificially low because Fannie Mae, Freddie Mac and the nation’s biggest banks have been slow to list for sale hundreds of thousands of foreclosed homes they currently own. The lenders slowed down foreclosure sales and repossessions after record-keeping abuses surfaced 18 months ago.

Banks and other mortgage investors owned nearly 450,000 foreclosed properties at the end of March, and another two million mortgages were in some stage of foreclosure.

Inventories could rise, putting more pressure on prices, if the banks and other lenders step up their efforts to sell their properties. Real-estate agents say they aren’t concerned. “There’s an enormous appetite for foreclosures. Release the inventory. It will sell,” said Richard Smith, chief executive of Realogy Corp., which owns the Coldwell Banker and Century 21 real-estate brands.

The declining inventory of older homes is spurring sales of new homes. New home sales are up 16% so far this year, compared with a year ago, while inventories of new homes fell in March to their lowest level since record keeping began in 1963

Meritage Homes Corp., a builder based in Scottsdale, Ariz., reported Thursday a 36% increase in orders for the quarter ending in March versus the previous-year period.

Even though bidding wars are pushing prices higher, many homes are still selling for prices far lower than a few years ago. Increased demand is “entirely affordability driven, which tells me there will be strong resistance to price increases” by buyers, says Jeffrey Otteau, president of Otteau Valuation Group, an East Brunswick, N.J., appraisal firm.

Rents are rising at a time when mortgage rates have fallen to very low levels. The result is that the monthly mortgage payment on a median-priced home is lower than any time since the 1990s. Freddie Mac reported on Thursday that mortgage rates fell to 3.88% for the average 30-year fixed rate mortgage, near its lowest recorded level.

Rates are “so low that we can afford a house that was out of our price range before,” said Aarthi Srinivasan, who is looking with her husband for a home around Palo Alto, Calif., one of the country’s hottest real-estate markets.

Ms. Srinivasan says she fears that prices are being bid up too quickly. She says she had her “aha moment” earlier this year while touring a 50-year-old house that needed extensive remodeling. The home, listed at $1.1 million, received nearly 10 offers and eventually went under contract for more than $1.3 million to a buyer who hadn’t even viewed the property.

“There are only so many buyers who are going to be in such a hurry, so we’re hoping it’ll top off soon,” she says. On Monday, they offered to pay more than the $1.2 million list price for a four-bedroom, bank-owned foreclosure. They haven’t found out if they made the top bid.

On the other side of those transactions are sellers like Debbie and Bill Wetherell, who had 17 offers in four days for their four-bedroom home in Danville, Calif. “I was floored. It was so fast, it was surreal,” says Ms. Wetherell. The home sold on Wednesday for $796,000, more than $50,000 above the asking price.

Still, the sale is for nearly $180,000 less than what they paid for the house in 2005. Ms. Wetherell’s husband has commuted to Reno, Nev., for five years and they have decided to relocate.

Housing markets face other headwinds. More than 11 million homeowners owe more than their home is worth. It is a big reason that the “trade-up” market has been stalled. These homeowners can’t sell their current homes, let alone come up with the down payment for their next home.

Mortgage-lending standards remain tough. Real-estate agents say an unusually high share of deals are falling apart because homes won’t appraise at the price that buyers have agreed to pay sellers.

Still, borrowers with stable jobs are looking to make deals. Kelly Pajela-Fu and her husband offered to pay the asking price of $600,000 for a four-bedroom home in Marblehead, Mass., within a day of the property hitting the market.

“We just knew this house would go quickly,” says Ms. Pajela-Fu, a 31-year-old doctor who had lost out on an earlier offer. Their strategy to avoid a bidding war paid off: The sellers accepted their offer before having an open house.

Write to Nick Timiraos at nick.timiraos@wsj.com

A version of this article appeared April 27, 2012, on page A1 in some U.S. editions of The Wall Street Journal, with the headline: Stunned Home Buyers Find The Bidding Wars Are Back.

Copyright 2012 Dow Jones & Company, Inc. All Rights Reserved

Despite the housing slump, the Bay Area is doing relatively well compared to other housing markets across the country.

As we have written in previous posts, homes that are well maintained and presented in prime locations have been snatched up fairly quickly all across the bay.  And according to this Yahoo Real Estate article, homes in the Bay Area are the fastest selling in the nation.  This is based on data from real estate site Zillow, that analyzed real estate listings and statistics during mid April – mid July of this year.  Across the country, the median number of days for a home to be on the market was 117.  The median number of days for San Francisco, which was the fastest selling area in the country, was almost half of that, at 59.  Following closely behind was San Jose, which tied for the #2 spot with Seattle and Oakland, which took the #5 spot.

Despite it being buyer’s market, the data from Zillow points to little wiggle room in negotiating. The average discount negotiated on the sale from the original listing price was only 1%.  This points out again, that well positioned and priced homes will move quickly and those that are not, can languish. Approximately a quarter of the homes in the Bay Area listed during this timeframe had a price cut.

Sellers, buyers, agents, brokers, readers – is this indicative of your recent experience?  Will the Bay Area climb out of the slump sooner than the rest of the country?

Determining a home’s value

The New York Times – Declining property values are preventing some homeowners from taking advantage of today’s historically low-interest rates and refinancing.

 Many homeowners nationwide have either no equity or are in a negative equity position in their homes. This leaves them with two options for refinancing, paying extra at the closing or what’s known as a cash-in mortgage.

 Those considering refinancing will need to determine the current valuation, comparing it with the mortgage balance. If the balance is at least 15 to 20 percent higher than what is owed, a refinance without a second down payment is possible.

 To obtain a good valuation, some homeowners hire an appraiser, at a cost of $300 to $600, or more on a large or expensive property. While this may be informative, most lenders require an official appraisal anyway, and that will have to be conducted by someone on the lender’s approved list.

 Another, less costly, option a homeowner can use prior to approaching a lender, is to check the comparable sales in the neighborhood and see which homes and for what amounts homes have sold in the last three to six months.

 Homeowners also can go to the county assessor’s office and look up specific homes that have sold recently in the neighborhood.

 When looking at comps, homeowners should consider homes with similar amenities and square footage as the property in question.

 Just before the home is scheduled for its official appraisal, homeowners should spend a few hours touching up and making sure it looks well maintained. Hiring a cleaning crew, repairing any broken windows, and providing documentation on upgrades also can help the appraiser.

Read the full story

New discounts for mortgage borrowers

SmartMoney – As mortgage rates continue to fall, lenders are rolling out splashy discounts and promotions to inspire reluctant home buyers. But critics say the newest offers still stop short of the best deal for borrowers: Lower rates.

Read the full story

Mortgage delinquencies increase

The Wall Street Journal – Mortgage delinquencies ticked up during the second quarter after declining for five consecutive quarters, according to a report by the Office of the Comptroller of the Currency.

Read the full story

Buyers, sellers chafe at low home appraisals that hurt sales

The Mercury News – Low appraisals continue to block people from selling homes or refinancing mortgages, leaving many sellers and real estate agents unhappy.

Read the full story

Freddie, Fannie reject debt relief

The New York Times – Fannie Mae and Freddie Mac have decided not to participate in debt reduction programs due to their policies against debt forgiveness and principal reduction.

Read the full story

Mortgage help for unemployed disappears

CNNMoney – A $1 billion program to assist the jobless will likely end up spending only half the funds, at most, because so few people met the strict criteria.

Read the full story

California quits states’ talks with banks on mortgages

The New York Times – A decision on Friday by a California official to withdraw from negotiations with large banks over their mortgage practices threatens to derail a broad settlement that the Justice Dept. has been brokering for nearly a year.

Read the full story

Number of permanent mortgage modifications rises

Los Angeles Times – A total of 15,522 borrowers received permanent modifications through the Home Affordable Modification Program in August, up 2.3 percent from July.

Read the full story

Consumer confidence essentially unchanged

The San Francisco Chronicle – The Conference Board said last Tuesday that its Consumer Confidence Index was at 45.4, up slightly from a revised 45.2 in August.

Read the full story

What you should know about the market

 As the warm summer days begin to turn into cool fall and winter nights, many homeowners see increases in their electricity bills as they try to keep their homes warm.

 To help lower the cost of heating a home this winter, homeowners can weatherstrip their homes. According to the U.S. Dept. of Energy, there are many kinds of weatherstripping products on the market. Since each product is designed to work in a different area of the home, homeowners should read product packaging carefully to determine if it is best suited for windows or doors, as well as indoor or outdoor use.

 Another tip for “winterizing” a home is to get a furnace or heating system inspection, which most professionals recommend homeowners do at least once a year. An inspection of the working parts can ensure that the house has heat when needed and can prevent costly repairs in the future.

by Carla Hill

When it comes to home affordability, levels are at near record generational highs.

The National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) indicates that in today’s market “72.6 percent of all new and existing homes sold in the second quarter of the year were affordable to families earning the national median income of $64,200.”

There are smaller markets that see an even higher rate of affordability, such as Kokomo, Indiana, where 95.8 percent of homes sold during the second quarter of 2011 were affordable to families earning the area median income of $59,100.

“At a time when homeownership is within reach of more households than it has been for more than two decades and interest rates are at historically low levels, the sluggish economy and the extremely tight credit conditions confronting home buyers and builders remain significant obstacles to many potential home sales,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB).

Unfortunately, this high level of affordability, alongside historically low-interest rates, has not translated into more sales. Existing-home sales declined in July, down 3.5 percent from June.

Lawrence Yun, NAR chief economist, said there is a tug and pull on the market. “Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” he said. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”

Regionally, existing-home sale were down in just the South (-1.6) and West (-12.6). The Midwest experienced a 1.0 percent growth rate, while the Northeast rose 2.7 percent. All regions have experienced double-digit gains over July 2010. The largest increase was seen in the Midwest, which saw existing-home sales rise 31.3 percent year over year.

The NAR reports that the national median existing-home price was $174,000 in July, down 4.4 percent from July 2010. Distressed homes still made up nearly 1/3 of the market, at 29 percent.

The delinquency rate for mortgage loans increased for the second quarter of 2011, up to 8.4 percent of all loans outstanding.

According to the Mortgage Banker’s Association’s (MBA) Chief Economist, Jay Brinkmann, “While overall mortgage delinquencies increased only slightly between the first and second quarters of this year, it is clear that the downward trend we saw through most of 2010 has stopped. Mortgage delinquencies are no longer improving and are now showing some signs of worsening. The good news is the continued decline in long-term delinquencies, those mortgages that are three payments or more past due. The bad news is that drop is offset by an increase in newly delinquent loans one payment past due.”

Yet, the temporary decline in foreclosures that some analysts attribute to a temporary pause for lender or judicial procedural reviews, could instead be a true decline in foreclosures.

The MBA reports that “foreclosure start rates fell to their lowest level since the fourth quarter of 2007. Foreclosure inventory rates also fell, to their lowest level since the third quarter of 2010. While some have argued that this drop in foreclosures is a temporary drop which does not reflect the problems yet to come, this does not appear to be the case, at least at the national level. There are still many problem loans that need to be resolved, but the idea that there is a growing backlog of loans being held back from foreclosure is simply not supported by these numbers. The percentage of loans 90 days or more past due continues to fall along with the foreclosure rate, and is at the lowest point since the beginning of 2009. Were there a growing backlog, we would expect to see the 90-plus day delinquent category increasing.”

Without this backlog, foreclosures could be losing steam, meaning prices and the market as a whole could be headed toward stabilization.

Realty Times – Real Estate Outlook: Affordability Remains High.

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