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.
I will be holding open 3848 Happy Valley Road in Lafayette from 1 – 4pm. The home is exclusively listed by Nancy Rothman and offered @ $2,595,000. Historic Happy Valley farmhouse artistically restored with designer finishes & custom quality by McNamara Development and Construction. The original home was built in 1903 for Herbert & Estella Brown Mullikan. Estella’s father was Henry Toler Brown and her grandfather was Elam Brown, the founder of Lafayette. While maintaining the original farmhouse charm, the home was remodeled and expanded to embrace today’s modern lifestyle. Reclaimed wood and brick from the original home can be found throughout. A rare opportunity to own a part of Lafayette’s history.
Just under 4,000sf, the ideal single story floorplan offers formal living and dining rooms, spectacular kitchen/family combo leading out to the patio and yard, 4 bedrooms, plus an office, and a guest suite with separate entrance. The expansive yard and serene setting create an easy indoor/outdoor entertaining lifestyle. Conveniently located in the heart of Happy Valley with easy access to top schools, BART, Freeways, and downtown Lafayette. I hope to see all of you there!
Last week, Pacific Union CEO, Mark McLaughlin wrote this insightful piece about the future of Bay Area home prices.
We are frequently asked how long the current real estate market or housing cycle will run. Our industry is not short on opinions, predictions, and speculations. This past month, I reviewed the most comprehensive housing report I have read since 2007: the John Burns Real Estate Consulting Home Value Index.
The report defines housing-cycle risk as a function of demand, supply, and affordability. This is a fairly simple perspective that comes as no surprise. The forecast or outlook is dependent on job growth for demand and excess supply in the form of new construction or foreclosures. On a relative scale compared with the housing market in the U.S., our local markets have limited excess supply at this time.
The Burns report goes on to note that the markets with the most upside are clearly those that experienced the most significant downs. Again, this concept is not overly complex, and the variables are relatively easy to comprehend.
The most stimulating aspect of the report is in the Burns Home Value Index Forecast for December 2017. We have often struggled with the S&P/Case-Shiller and similar indexes, which generally offer perspectives based on 90 to 120 days trailing market performance and do not look forward.
The Burns report cites summary research from nearly 100 economists’ responses to questions about housing appreciation in the U.S. from Q4 2012 through December 2017. The Burns report estimates 35.9 percent appreciation through December 2017, with more than 9 percent already realized through September 2013. The 100 economists’ consensus for that same time frame was 22.9 percent appreciation, with 6 percent already realized.
The Burns report provides regional outlooks on nearly 100 markets. The Bay Area findings are illustrated in the table below:
With the caveat that real estate is local and each neighborhood and home is unique, these forecasts are very reassuring. In particular, the outlook for 2017 is exceptionally encouraging. However, the report illustrates that the majority of the lift in the market will occur in 2014 and 2015, with modest to flat growth in 2016 and 2017.
The opportunity to realize value in real estate and historically low mortgage rates is now. Mortgages will likely exceed 6 percent by 2016, a 30 percent increase from today’s rates.
Your local Pacific Union real estate professional is uniquely positioned to review macro trends and neighborhood specifics to assist you in your residential real estate investments. Please remember that your most significant real estate investment is in your home — which is a place to live and create memories — rather than just your house.
– Mark A. McLaughlin, CEO, Pacific Union
Take a virtual tour of 94 Purdue Ave in the Kensington Hills. New construction. Sophisticated modern craftsman with stunning finishes. Fabulous great room with gourmet kitchen & level out yard. Luxurious master suite plus 1 bedroom & 1.5 baths on the main floor; family room, bed & bath on lower level. Separate guest unit below.