Archive for March, 2010

March Market Focus Report from San Francisco Association of Realtors

FOR IMMEDIATE RELEASE:

Contact: Jim Fabris

San Francisco Association of

REALTORS®

301 Grove Street

San Francisco, CA 94102

415-431-8500 x132

Market Tightens in San Francisco but Median Home Sale Price Dips

SAN FRANCISCO, CA, March 16, 2010 – A jump in residential real property sales in San Francisco

in February 2010 has led to a significant decline in for-sale inventory levels and a tight real

estate market in the city, according to the latest Market Focus report, issued jointly by the

Rosen Consulting Group of Berkeley and the San Francisco Association of REALTORS®. For the

month of February, the months of supply inventory now stands at the lowest level in more than

a year.

The median home sale price for the month, however, declined 2.5 percent to $695,000 for both

single-family homes and condominiums after increasing 18.4 percent in January. During the

month, 113 sales were closed, nearly matching sale activity in the same month the previous

year. But 217 units went into contract, a 65 percent increase over last year. With only 571

single-family homes on the market at the end of February, the jump in pending sale activity

reduced the months of supply inventory to 2.6 in February, compared to 5.3 months of supply

for the same month last year.

With longer lag times between contract signing and closing in the current environment, the

median sales price figure is more likely to reflect contracts signed in late 2009.

Condominium sales continue at a rapid pace, though much of the sale activity has come at the

cost of reductions in asking price and increasingly attractive concessions. Completed sales

totaled 137 units in February 2010 up from 90 units in February 2009, while pending sales

reached 228 units from 116 units during the same time period last year.

The jump in sales activity for condominiums brought down the for-sale condominium inventory

to 848 units from more than 1,000 the same month last year. The condominium median sales

price was $650,000, an increase from recent months, but 8.9 percent less than the median sale

price in February 2009.

“The problem for buyers right now is that there is an absence of choice in the marketplace. It’s

a shame because the months of March, April and May are traditionally strong months for real

estate sales. If a greater variety of properties were available, the likelihood is that they would

find buyers in less time than any other part of the year,” says John Lee, president of the San

Francisco of REALTORS®.

Going forward, the Rosen Consulting Group believes that, despite anticipated bumps in the

road, the San Francisco housing market has turned a corner and should continue to improve

through 2010. The reasons it cites for its positive outlook are rising household net worth,

improving—though limited—job prospects, and a potential extension of some governmentfacilitated

home-buying programs.

“As companies begin rehiring after severely cutting payrolls through 2009,” the group says, “the

net increase in jobs across the metropolitan area in 2010, and more so into 2011, should

accelerate the housing market’s recovery. While the market will surely face hurdles in the form

of continued job cuts, higher mortgage rates, and distressed property sales during its path to

recovery, 2010 is still expected to be a positive year for the San Francisco housing market.”

###

Real estate data in Market Focus is provided by Terradatum. Market Focus is written by the

Rosen Consulting Group. For additional information on the real estate market or Market Focus,

please contact:

San Francisco Association of REALTORS®

301 Grove Street

San Francisco, CA 94102

415-431-8500 x132

www.sfrealtors.com

Rosen Consulting Group

1995 University Ave., Ste. 550

Berkeley, CA 94707

510-549-4510

www.rosenconsulting.com

Barely beginning to emerge from the most devastating housing downturn since the Great Depression, home builders in the early months of this year have been confronted by a significant run-up in lumber prices.

For the week ending on Feb. 19, the Random Lengths composite index stood at $317 per 1,000 board feet, its highest level since the first half of July 2006. That price was up more than 26% from the start of this year, when framing lumber was averaging $251.
Read more…

Mortgage rates, which many feared would rise sharply when the Federal Reserve stops propping up the market at the end of March, may actually not budge much at all, analysts say.

But the longer-term impact of the Fed’s pullback from the mortage market is less certain, they add.

Jeff Cox
Staff Writer
CNBC.com

Read more…..

Of all U.S. mortgage holders, about one quarter, or 11.3 million households, is underwater, meaning they owe more than their homes are worth. In California, the percentage is even greater—35 percent.

According to First American CoreLogic, the tipping point appears to come when a home owner has a negative equity of 25 percent or more. At that point, many owners choose to cut their losses and voluntarily walk away from their homes. To prevent this result and to avoid a costly and time-consuming foreclosure, banks typically encourage owners to market their property as a short sale.

So, how does San Francisco and the northern peninsula stack up against the rest of the country, and the State as a whole? These areas are doing much better. The percentage of home owners underwater in the San Francisco-San Mateo-Redwood City area is only 10.4 percent. And the percentage of home owners underwater by 25 percent or more is only 2.6 percent.

Real estate sales in San Francisco and the northern peninsula may be lagging previous years but real estate values have remained strong through one of the worst economic downturns since the Great Depression—a fact of which homeowners and prospective buyers should be reminded from time to time.News by the San Francisco Association of Realtors

Wednesday, March 10, 2010

First-time buyers, distressed properties drove California’s housing market in 2009, C.A.R. reports

LOS ANGELES (March 10) – Affordable home prices, tax credits for home buyers, historically low interest rates, and a large number of distressed properties prompted many first-time home buyers to enter the market in 2009, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) 2009-2010 “State of the California Housing Market” report released today.

The percent of first-time buyers increased dramatically in 2009, from 35.9 percent in 2008 to 47 percent in 2009, according to the report. The share of first-time buyers exceeded the long-run average of 38.6 percent and was the highest since 1995, when more than half of all buyers were first timers.

“It is clear that the federal tax credit for home buyers worked well in 2009 and is continuing to drive home sales,” said C.A.R. President Steve Goddard. “The home buyers’ tax credit is arguably the most successful strategy employed by the government’s efforts to stimulate the economy.”

According to a survey conducted by C.A.R. on the effectiveness of the federal tax credit for home buyers, nearly 40 percent said they would not have purchased a home if the federal tax credit was not offered. On the same note, nearly 70 percent of these buyers said the tax credit was either “very important” or “most important” in their decision to buy a home. The large number of distressed properties led to more than half of all first-time buyers purchasing an REO/foreclosure or short sale property.

Statewide, REO/foreclosures and short sales accounted for almost half of all annual sales in 2009, an increase from 35.6 percent in 2008. The median price of distressed properties declined nearly one quarter to $250,000 in 2009 compared with $330,000 in 2008. Meanwhile, the median price of non-distressed properties decreased only 10.4 percent to $485,000 compared with $541,000 in 2008.

Many sellers sold their homes with a loss in 2009, and those who experienced a net cash loss increased for the fifth consecutive year. With one-third of sellers experiencing a net cash loss in 2009, it was the highest level on record since C.A.R. started tracking net cash losses in 1989, and was more than triple the long-run average of 9.3 percent. Following two consecutive years of significant declines in prices, the median net cash from home sales declined 50 percent last year to $50,000 from $100,000 in 2008.

Although sellers experienced a steeper net cash loss, lower home prices across the state sent affordability for first-time buyers to record-high levels in 2009. C.A.R.’s First-Time Buyer Housing Affordability Index (FTB-HAI) rose to 64 percent in the third quarter of 2009. The FTB-HAI measures the percentage of households that can afford to purchase an entry-level home in California and also reports first-time buyer indexes for regions and select counties within the state.

Affordable home prices also enabled first-time buyers to purchase larger homes. The average size of a first-time buyer’s house increased to 1,560 square feet in 2009 compared with 1,300 square feet in 2005. Nearly 80 percent of first-time buyers purchased a single-family home, a slight increase from 78.5 in 2008, but a significant increase from 2005 when only 61 percent of first-time buyers purchased single-family homes.

Lower home prices not only encouraged first-time buyers to purchase entry-level homes, but also lured investors. More than 70 percent of properties purchased by investors were either short sales or REO/foreclosures. The typical investment property was 1,367 square feet and had a median price of $232,750.

California’s median home price hit bottom in February 2009 at $245,170. Since then, the median home price has increased steadily in month-to-month comparisons, but remained below 2008 levels throughout 2009. The annual median price is projected to increase to $280,000 in 2010 from $271,000 in 2009.

Homes priced $500,000 or less dominated the sales mix throughout 2008 and early 2009, but peaked at 85 percent in January 2009. Meanwhile, the market share of homes sold for more than $500,000 increased from 15 percent in January 2009 to 25 percent in July 2009, holding steady around that figure for the remainder of last year.

Sales of high-end homes started picking up in late 2009, with the number of closings for homes priced $500,000 or higher rising 3 percent, and sales of homes priced $1 million or more experiencing their first year-to-year increase since July 2007. Statewide, annual sales of existing homes are projected to reach 527,500 units in 2010, a 2.7 percent decline compared with 2009’s annual rate of 540,000 units.

As conventional loans became more difficult to obtain, the percentage of FHA-insured loans as a first mortgage increased significantly in 2009. The percentage of home buyers utilizing an FHA-insured loan increased to 32 percent in 2009, compared with 18.9 percent in 2008, partially a result of the agency increasing its loan limit from $362,790 to $729,750. FHA loans typically require lower down payments and have less rigid credit-qualifying guidelines than conventional loans. The median down payment for FHA-insured loans was $9,888 compared with $92,000 for conventional purchase loans.

“Although the huge increase in the use of FHA-insured loans is of concern, the housing market will continue to stabilize as home prices slowly recover and discretionary sellers return to the market in 2010,” said C.A.R. Chief Economist Leslie Appleton-Young.

From SFAR: Set forth below are Unit Sales/DOM/Monthly Supply charts for the month of February for single-family homes, condominiums and 2-4 units, as well as Supply/Demand, Sales Rate and Median Price charts for the same month.

U.S. mortgage applications nudged higher last week, reflecting increased demand for home purchase loans even as interest rates trekked higher, data from an industry group showed on Wednesday.

Read more..

Inman News March 8, 2010

Zillow’s “Zestimates” of home market value are often exaggerated and therefore may be no more accurate than homeowners’ own overblown estimates of value, charges a study in The Appraisal Journal’s Winter 2010 issue.

Zillow countered that the study used data that is “out of date and limited in scope.”
The Appraisal Institute, a global association for real estate appraisers that publishes the quarterly journal, says any opinions and views in its articles are those of the authors and not necessarily those of the institute.

Read more….

If the pictures are not hiding major flaws in the floor plan this is a good price.

Visit the property website (you might want to mute the sound on your laptop first…..

View the photos that were taken Monday of our condos on Corbett.  The website will be ready on Thursday and they go on the market Friday with the first open house Saturday.

View the photo album….