Fresh from Pacific Union’s blog, this week is a weekly recap of real estate highlights:
The traditional Spring Selling Season is off to a great start – again – according to Core Logic. The company recently released a report showing a 12.2% year-over-year increase in home prices, representing the 24th straight month (i.e. 2 years) this has happened. California – and the Bay Area in particular – is leading the way. Including distressed sales (e.g. foreclosures, short sales, et al), California prices rose 19.8% year-over-year. In good news for first time and move up buyers, Core Logic’s chief economist (Dr. Mark Fleming) said that the company expects home prices to level out next year as fewer home owners are under water, leading to an increase in the supply of homes and decreasing the continued price surges of the last couple of years.
Across the Richmond-San Rafael bridge, a development firm as purchased 101 acres in southern Marin County and plans to build apartments and a school on the site. Apparently, the new owner is seeking to put about 100 rental units on the site. No time table as to when any plans are expected to come up before the County Planning Commission.
Lastly, the California Association of Realtors released a survey last week showing that there is an increasing number of international homebuyers in our state. According to the survey, 85% of these buyers considered only the US as a potential place to buy a home, with the overwhelming reason being the Sunshine State’s climate (they obviously didn’t visit SF in the summer!) and that they wanted to be closer to family.
For a more complete rundown of last week’s real estate roundup, check out Pacific Union’s blog.
There is a lot going on in the Real Estate world these days. For a more complete look, check out Pacific Union’s blog today:
CAR’s February home sales report shows that pending home sales rose 14.2% over January. This is the second straight increase. Meanwhile, distressed home sales dropped across the state except in Solano County.
Home builders are increasingly looking toward infill projects rather than suburban tract homes. According to the Wall Street Journal, this is driving land prices up and is getting in the way of new-home sales, along with a lack of first-time home buyers and rising prices (although the latter two go hand in hand).
Also, last week Trulia released a report suggesting that Coastal California Markets (i.e. the Bay Area) may be headed for a bubble. The report argues that the Coastal CA market is overvalued: San Jose, San Francisco and the Oakland markets are all between 4-8% over what Trulia deems the current market value.
Quick recap of the Real Estate Market from over the weekend. For a complete recap, go to the Pacific Union blog:
- Citing a recent Zillow report, Pacific Union expects the real estate market to be hot this spring. San Jose and San Francisco should lead the way. Zillow’s report also shows that San Jose and San Francisco also have the highest home values in the country at $748,800 and $648,700 respectively.
- In addition, it looks like the Oakland inventory crunch is starting to ease up. Statistics show that there was a 19% increase in homes for sale in February.
- Although new housing starts are cooling off across the country, there is a new planned development coming along in Walnut Creek near the BART station soon.
Pacific Union continues to be a leader in the real estate industry with its new Digital Listing Presentation (DLP). Yesterday, the 1000 watt blog wrote about our new DLP using it as an example of what brokerages need to be doing: not remaining stagnant. Rather than letting the market “happen,” or rather than waiting for third party sites like Trulia and Zillow to make advancemets, Pacific Union went out and created the DLP. The DLP is a visually stunning, relevant, interactive presentation for the seller. With each investment into technology, I get more and more excited about continuing to work for Pacific Union. Click here for the blog post.
US Real Estate prices have risen year-over-year for the 17th consecutive month. The median price in the US is now approximately $215k, just shy of the high-water mark set in July, ’06.
What does this mean for us? According to Pacific Union’s blog, the median home price in the Bay Area was $720,000 in July or approximately 3.33 times higher than the rest of the country. Tight inventory is helping to drive up the cost, according to NAR’s Chief Economist, Lawrence Yun. For more information on the recently released July housing report, go to Pacific Union’s blog: http://blog.pacunion.com
Pacific Union announced yesterday that it made Inc.com’s top 5000 fastest growing companies in the US based on revenue from 2009-12. PU is the only full service brokerage in the Bay Area to make the list. All of us at Pacific Union are very excited about this accomplishment. For the full release, go to the Pacific Union Blog: http://bit.ly/186rKUw
You read the headline right: home prices around the Bay Area spiked 6.9 percent from May to June, setting a new record for June increase. Overall, prices of skyrocketed by 33.1 percent since the same time last year!
Around the nine counties, the median home price was $555,000 — the highest it’s been since December 2007. That’s up from $519,000 in May and $417,000 in June of 2012.
DataQuick, the firm tasked with researching home sales information, said prices went up because of “disappearing distress sales, an improving economy and mortgage rates that, while up off the bottom, remain very low.”
There’s still a ways to go before prices reach the peak of the housing bubble. The Bay Area’s highest median home price was $665,000 in June and July of 2007. It dropped to as low as $290,000 in March of 2009.
Economists are urging homebuyers who are currently able to buy a home to act while they can. Interest rates continue to rise, and you can save yourself hundreds of dollars by locking in a lower interest rate before it disappears.
Interest rates have already increased by more than 1 percent since May and are expected to continue going up all the way until 2014. According to the Mortgage Bankers Association, interest rates for a 30-year, fixed-rate mortgage with conforming loan balances averaged 3.59 percent during May. Loans that are nonconforming (or jumbo loans) averaged 3.79 percent.
But if you blinked, those rates passed you by. By mid-June, interest rates for similar mortgages were averaging 4.17 percent for conforming loans and 4.23 percent for jumbo loans.
For July, those same rates have again increased to 4.68 and 4.81 percent respectively.
While these rates are still low historically (in the early 2000s, rates reached an average of 6 percent, while in the 90s rates were as high as 7 to 9 percent), the increases are no drop in the bucket. If you’re planning on buying a home and want to lock in a low interest rate, the time to act is now!
In Fannie Mae’s latest housing survey, 57 percent of Americans expect rising interest rates and home prices in the next year. 72 percent believe now is a good time to buy a home. Do those two have any correlation? You bet.
Fannie Mae’s chief economist Doug Duncan believes interest rate hikes “may increase housing activity in the near term by driving urgency to buy.” 30-year mortgage rates are already up 1 percent from the beginning of May to the end of June, and Duncan believes this trend will continue to bolster the housing market.
“Consumers may recognize that today’s still-favorable mortgage rates and homeownership affordability levels will recede over time,” Duncan said. “Given rising home and rental price expectations and improving personal financial attitudes, more prospective homebuyers may be deciding that now is the time to get off the fence.”
The potent local economy and low unemployment rates will likely increase real estate activity locally, according to Pacific Union. That, coupled with the temptation of locking in lower mortgage rates, should convince homebuyers that they have more spending power as property prices start to climb.