Deirdre Sauvage
Ca. DRE # 00847381
dsauvage@apr.com
Today’s blog takes a look at Months Supply of Inventory Data based upon Feb 2012 Trendgraphix Data for single family homes. This data indicates that the San Francisco Mid Peninsula real estate market continues to show strong activity with multiple offers becoming the norm for many cities located in Silicon Valley .
Palo Alto: 1.1 months (based upon closed sales for Feb 2012)
.7 months (based upon pended sales for Feb 2012) Read more
San Francisco Peninsula real estate is characterized by numerous “micro-markets” and today we visit North Los Altos. This area is anchored by shopping, schools and restaurants located within close proximity to San Antonio Road. Main Street is a local hub for shopping and restaurants. Lots tend to be larger than average (see below) and homes range from ranch style homes to newer construction.
The SF Peninsula real estate market is characterized by limited space for new development and growth; therefore, older homes are often purchased and then replaced with new construction. Larger lots can command a premium for new development.
Currently our Multiple Listing Service indicates 19 active class one (single family homes) listings with an average list price of $2,439,158 on an (average) 11,089 sq foot lot. The MLS indicates 16 pending sales as of todays date with an average list price of $1,544,938 on a 12,446(average) sq foot lot. (Information provided by MLS deemed accurate but not guaranteed)
Tomorrow we visit Woodside Glens located close to 280 and downtown Woodside.
Spring has definitely arrived and my email inbox continues to receive numerous weekly market updates. Today’s blog looks at the entry level real estate market:
“Stress Test Reveals More Work to Be Done By Banks- While Entry Level Local Real Estate Market Heats Up!
This week the results of the long-awaited Stress Test on US banks were released. What the government hoped to accomplish through this Stress Test was to determine how much capital the banking sector currently has, and what level they deem appropriate to withstand the recession. The result was that 10 of the nation’s 19 largest banks will need to raise a total of $74.6 billion in capital. The Stress Test revealed that banks like Goldman Sachs and J.P. Morgan seemed to be better positioned than Citigroup and Bank of America.
At this point, according to Kiplinger, “The stronger banks will actively do what they can to return any money borrowed from the government to get out from under restrictions on dividends and executive compensation. Their ability to sell common stock to the public is far better than their weaker counterparts, who may have to privately sell stock to investors or raise capital with so-called mandatory convertible preferred shares.”
According to industry analysts, it seems that until the banks get back on their feet, credit will continue to be tight. That leaves the Federal Reserve responsible for filling in the gaps with its own programs aimed at jump-starting lending.
On a brighter note, however, the real estate sector of our economy continues to show some positive signs. USA Today reported earlier this week that “More homes for sale are attracting multiple offers as buyers pursue lower-price homes and banks low-ball asking prices to attract competing bids on foreclosures.” It’s exactly what we’ve seen locally, the entry level home buyer market is fueling this recovery. We forecasted this, and now that multiple offers are the norm in the majority of our entry level markets, some frustrated buyers are scratching their heads and wondering what happened to the buyer’s market. We warned that things could turn on a dime, and it seems in many starter home markets, prices are already on the rise.
Here are some links to some interesting news stories from the week:
• USA Today: More homes get multiple offers; downturn may be nearing end (http://www.usatoday.com/money/economy/housing/2009-05-05-foreclosure-home-sales_N.htm?loc=interstitialskip)
• Business Week: Want to Sell Your Home? Lower Your Price (http://www.businessweek.com/lifestyle/content/may2009/bw2009055_075566.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis)
• RISMedia: Relocation.com Survey Shows Consumers Moving Further Due to Economy (http://rismedia.com/2009-05-05/relocationcom-survey-shows-consumers-moving-further-due-to-economy/) – This is a good reminder to consumers on why they should choose an Agent who is affiliated with a large, global real estate company that has the breadth and influence to reach the largest pool of buyers.
• NYTimes: Where Home Prices Crashed Early, Signs of a Recovery (http://www.nytimes.com/2009/05/05/business/economy/05turnaround.html?_r=2&hp)
• Realty Times: Real Estate Outlook: Sales Rising in Some Areas (http://realtytimes.com/rtpages/20090505_realestateoutlook.htm) “
(Source: Rick Turley, President, Coldwell Banker Residential Brokerage San Francisco Bay Area)
These articles cited present an interesting look at our current market. San Francisco Mid Peninsula Open Houses continue to be heavily attended with multiple offers becoming more and more likely in the entry level market.
The Sunday (April 26, 2009) issue of The San Jose Mercury News ran a cover page article reporting "Prices More Steady in Communities Less Affected By Mortgage Crisis". The article went on to state that "a Mercury News analysis shows, home prices in some Santa Clara County neighborhoods least affected by the foreclosure crisis have fallen less than 20 percent."
This article underscores the importance of comparable sales data that is current and appropriate for each unique neighborhood .
Market conditions can vary widely by neighborhood and it is important for both buyers and sellers to understand current market conditions in the San Francisco Peninsula/Silicon Valley housing market.
Today's blog looks at market activity in Menlo Park as reported by Multiple Listing Service data. As of today there are 123 active class one (single family) listings in Menlo Park. Currently there are 45 pending sales in the class one category ranging in list price from $4,495,000 to $229,000. This data seems to indicate an active market with attractive choices for buyers. The San Francisco Mid Peninsula remains a beautiful place to live and our spring market is offering many buyers attractive lifestyle options.
Today’s blog takes a look at recent market activity updates emailed to me over the past week concerning mortgage activity in the San Francisco Mid Peninsula real estate market:
“With about $100,000,000 in loans that we’re actively working on, combined with the fact that we have six, local purchase transactions scheduled to close tomorrow, I think that it’s safe to say that there’s a frenzy of mortgage activity happening with zero signs of slowing down anytime soon. Combine this with the fact that the Mortgage Bankers Association’s index for purchase transactions was up a whopping 11%, marking the fifth week in a row of consistent gains. Refinances, as you might imagine, were also up another 3.2%.
So what happens when so much demand for mortgages begins to outstrip the supply of money for mortgages? Rates rise. So, if purchase activity continues to climb as the spring and summer markets are upon us, and you add the refinance activity as well, it’s a tough goal keeping rates low. As such, if you or anyone you know is looking to refinance or purchase a home, doing so sooner than later is recommended…
Logically, the two big reasons that purchase activity has picked up has been due to both great prices and great rates. When one analyzes the difference of buying a home last year versus this year, they see that doing so now is cheaper by about 22%, when combining both a 15% reduction to values and an 18% reduction in rate (5.6% to 4.6% on rate)! Buying a historically lucrative investment at a 22% discount is pretty strong motivation. What’s more is that the purchasing power of last year’s buyer has also increased 22%, presuming that their income has remained stable. Begs the questions of whether it’s really going to get any better than this for would-be homebuyers.
Oh, and just a reminder to all you homeowners out there, property taxes are delinquent if payment is not postmarked by April 10, 2009.
Kindest regards,
Eric
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Eric T. Trailer, Principal
Absolute Mortgage Banking
2nd Floor
Palo Alto, CA 94306”
My thanks to Eric for continuing to provide insightful commentary on our local San Francisco Mid Peninsula real estate market.
Today's blog takes a look at listing activity in San Carlos. Currently our Multiple Listing Service shows 66 active class one listings(single family homes). As of today's date there are 30 pending sales(class one). Our San Francisco Mid Peninsula Spring real estate market continues to be very active. Want to find out more about the San Carlos market? Contact me today!
Monday morning always brings interesting information and the following email shed some interesting perspective on first time home buyers credits and pending sales:
"As I was reading through the headlines and news updates over this past week, I was amazed that it wasn’t properly pointed out that when the existing home sales were released on March 23 (up another 5.1%), that right there in black and white, the median and average price of existing homes in the US was UP in February. That’s right, February’s median price was $165,400 versus $164,800 for January AND the average US price for February was $269,900 versus $256,200 in January. Ladies and gentlemen, that’s technically means that we bottomed out in February. “But we need two months for a trend…” some (okay, many) may say, and that is a reasonable response. But when one takes a look at February’s Pending Home Sales Index for February, one sees that buying activity continues to be very strong, up 2.1% nationwide, with the West continuing to lead the way at 89.6. Combine the above with the fact that we are pre-approving or actively working on more purchase transactions for more people in the last thirty days than we have in the last seven months, and it appears very likely that March will follow February to officially set the upward housing price trend to mark the proverbial “bottom”.
Has anyone recently asked you, “If three friends and I want to buy a house together, and we’re all first time home buyers, can we each take advantage of the $8,000 Federal tax credit?” If you have.. and you weren’t sure how to answer, you may want to point them to IRS Form 5405 which seems to allow for the four referenced above to EACH take advantage of the $8,000 credit. “And if my three friends and I want to buy a NEW home to take advantage of the $10,000 CA state tax credit.., can we get that too?” Well, CA seems to be more specific on their Form 3528-A that the max credit per purchase is $10,000… Still, any amount of additional tax credit from the state is obviously better than nothing. Please, please contact a professional tax advisor to guide you properly on anything tax related, as I’m just a mortgage guy.
Regarding mortgages, we had a very big day yesterday with the Financial Accounting Standards Board easing up and clarifying the rules associated with mark-to-market accounting. This has been a necessary first step in helping to stabilize the banks and further free up lending. And we’re not just talking about conforming lending (up to $729,750 in loan amount), we’re talking about NON-conforming lending, which is so critical for our housing market locally. Bloomberg’s article yesterday covered it best, and what really opened my eyes was a question that came to mind as I read the article, “What if suddenly we had $5 trillion dollars to lend and investors began lining up to buy reliable, non-conforming mortgage-backed securities?”
Kindest regards,
Eric
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Eric T. Trailer, Principal
Absolute Mortgage Banking
2nd Floor
Palo Alto, CA 94306"
My thanks to Eric for providing this interesting insight. Please remember to consult with a tax professional regarding first time buyers home credits as this post is not meant as a substitute for professional tax advice. Spring has definitely arrived and for many buyers this is an outstanding opportunity to enter the San Francisco Mid Penisula Real Estate market.
Spring has arrived and our local open houses continue to be busy. Today’s blog takes a look at some recent market observations:
“From A Slow Crawl…To a Brisk Walk
I heard someone earlier this week say that the housing market has gone from a slow crawl to a brisk walk. I think that is the perfect metaphor to explain the recent changes in the real estate market. The market is coming back. It’s not roaring, but it’s coming back.
This week, according to Reuters.com, mortgage applications jumped as record low interest rates spurred a surge in demand for home refinancing loans. The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 32.2 percent to 1,159.4 for the week ended March 20. Refinancing accounted for 78.5 percent of all applications.
Furthermore, interest rates on mortgages fell after the Federal Reserve last week said it would buy Treasury securities for the first time in more than four decades as well as more than double its planned purchases of mortgage-related securities. Reuters.com reported that “Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.63 percent, down 0.26 percentage point from the previous week, reaching a record low….Interest rates were well below year-ago levels of 5.74 percent.”
Meanwhile, according to Realty Times, housing starts took a surprise jump of 22 percent in February over January's depressed levels. Most of the increase was attributable to apartments and condominiums, but single family starts were up by one percentage point, and new home permits were up by 11 percent, after months of sharp declines.
Existing home sales are also seeing some good trends. NAR reported this week that sales activity for single family, town homes, condominiums and co-ops rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February from a pace of 4.49 million units in January.
The West is leading much of the nation’s recovery, with California leading the charge. Our median listing price is beginning to rise for the first time in three years. Existing home sales in the West increased 2.6 percent to an annual rate of 1.2 million in February and remain 30.4 percent higher than a year ago.” (Source: Rick Turley, President, San Francisco/Peninsula/North Bay Coldwell Banker Residential Brokerage)
For those buyers who are actively engaged in the San Francisco Mid Peninsula market, there are definitely many opportunities and choices.
Today’s blog takes a look at recent market developments as recapped by Rick Turley, President, San Francisco/Peninsula/North Bay Coldwell Banker Residential Brokerage:
“It Was a Week of Surprises…And Best of All, Spring Has Sprung!
First, CNNMoney.com reported a sudden, unexpected surge in U.S.housing starts. According to the Commerce Department, housing starts rose to a seasonally adjusted annual rate of 583,000 last month, up 22% from a revised 477,000 in January. The big surprise: Economists were expecting starts to decline to 450,000, according to consensus estimates by Briefing.com.
Furthermore, applications for building permits, considered a reliable sign of future construction activity, rose 3% to a seasonally adjusted annual rate of 547,000 last month. The other big surprise: Economists were expecting permits to fall to 500,000.
Also interesting this week, retail sales figures fell much less than expected in February, and surprisingly strong January sales were revised even higher. According to CNNMoney.com, “
store sales showed a smaller-than-expected decline in February after an unexpected surge in January that was bigger than originally reported…The Commerce Department said total retail sales fell 0.1% last month, compared with January’s revised increase of 1.8%. Economists surveyed by Briefing.com had been expecting a decrease of 0.5% for February.”
So, is it safe to call this a trend? Are we out of the woods yet? It’s tough to say. In all honesty, you don’t know whether or not you’ve hit bottom until you’re on your way back up but it seems some of the critical signs are starting to show signs of life which is welcome relief for our wounded economy.
Also in the news this week, the Federal Reserve announced plans to purchase up to $750 billion in mortgage-backed securities and up to $300 billion in longer term Treasury securities. Our representatives at the National Association of Realtors applauded the plans noting “This is great news for American home buyers and homeowners because mortgage interest rates will continue at historic lows.”
What this means for Americans is that a greater number of home buyers will be able to purchase a home and some homeowners facing challenges will be able to refinance into better terms. As NAR noted, “We already are experiencing a great improvement in housing affordability due to historically low interest rates and the Fed’s move will push affordability conditions to the best levels in 40 years. In addition, continued low rates will lessen foreclosure pressure and help stabilize home prices sooner, as more Americans buy homes and draw down inventory.”
Along the lines of mortgage relief, the Treasury Department this week launched a new website for consumers seeking information about the Obama Administration’s Making Home Affordable loan modification and refinancing program. The site, www.MakingHomeAffordable.gov, offers features including interactive self-assessment tools that will empower borrowers to determine if they are eligible to participate and calculate the monthly mortgage payment reductions they could stand to realize under the Making Home Affordable program. This is a helpful site that we should all be sharing with our friends, families and clients alike.
Finally, on Friday, Jim Gillespie, president and CEO of Coldwell Banker Real Estate LLC, participated in a discussion about the state of the housing market, live from the New York Stock Exchange on CNBC, on the “Roadmap to Rebound” segment hosted by Maria Bartiromo. Yale economist Dr. Robert Schiller and Sanjiy Das, CEO of CitiMortgage, also participated. I am proud of Coldwell Banker and really pleased with Jim’s part of the discussion –sticking to the facts of what is still needed to make a significant difference for the housing recovery. Jim calls upon government leaders to enact a $15,000 non-refundable tax credit to ALL buyers and also a mortgage buy down that would bring rates to the 4-4.5% range. This, NAR reports, could generate an additional 840,000 home sales over 12 months. This home buying activity would have major implications in stimulating the overall US
economy since NAR also reports that each home sold generates more than $60,000 in economic activity. The proposal would also have a greater impact on foreclosures than the current stimulus package. Take a look: http://www.cnbc.com/id/15840232?play=1&video=1067527935”
For San Francisco Mid Peninsula buyers and sellers, the Spring Market usually brings with it higher levels of inventory and increased attendance at open houses. Spring has definitely arrived!
