Bay Area Home Affordability Improves in the Forth Quarter

Housing affordability improved in the Bay Area and across California in the fourth quarter of 2015 — welcome news for homebuyers.

The California Association of Realtors said its fourth-quarter Housing Affordability Index reached 24 percent in the nine-county Bay Area, up two percentage points from the previous quarter and up three points from a year earlier. Statewide,  housing affordability stood at 30 percent — a gain of one percentage point from the third quarter but down one point from the fourth quarter of 2014.

The Housing Affordability Index tracks the percentage of homebuyers who can afford to purchase a median-priced, single-family home, and CAR credits the improved affordability to lower interest rates and level home prices.

Even with the rising numbers, however, homeownership remains out of reach for many more Californians and Bay Area residents than elsewhere in the United States. Nationwide, 58 percent of homebuyers could afford a median-priced home in their community.

In the Bay Area, housing affordability rose from the third to the fourth quarter in seven of nine counties. It stayed the same in one (Napa) and fell two percentage points in another (Marin).

Solano was the Bay Area’s most affordable county in the fourth quarter, with 45 percent of buyers able to afford a home there. It was followed by Contra Costa (37 percent), Sonoma (26 percent), Alameda (22 percent), and Napa (21 percent). The least affordable counties in the state that CAR tracks were San Francisco (11 percent), San Mateo (14 percent), Marin (17 percent), and Santa Clara (20 percent).

Homebuyers in the Bay Area needed to earn a minimum annual income of $147,080 to qualify for the purchase of a $735,170 median-priced, single-family home in the fourth quarter. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $3,680, assuming a 20 percent down payment and an effective composite interest rate of 4.07 percent.

(Image: Flickr/Pictures of Money)

Source: Pacific Union

California Real Estate Market – Strong Start in 2016

Golden State real estate continued to command high demand in the inaugural month of 2016, with the Bay Area’s largest two cities once again ranked as the nation’s hottest.transamerica_sunset

That’s according to the latest analysis from Realtor.com, which determines the nation’s 20 most in-demand housing markets each month by calculating the number of listing views on its website along with the fewest days on market. As in December, California cities took more than half of those slots, including seven of the top 10.

As it has for most of the past six months, the San Francisco metro area ranked as the nation’s hottest real estate market in January, with a median list price of $716,000 and homes selling in an average of 51 days. San Jose followed in the No. 2 position, where homes listed for $854,000 and left the market in 50 days.

Homes in these two Bay Area cities sold twice as fast as the national average of 100 days and were more than three times more expensive than the U.S. median list price of $227,000. Slower sales are typical in January, though Realtor.com says that it expects activity to pick up heading into the spring season.

“Our traffic, searches and listing views exhibited the January ‘pop’ we saw last year, which made for a strong spring,” Realtor.com Chief Economist Jonathan Smoke said in a statement accompanying the report. “In addition, a large number of prospective buyers have been telling us since the second half of 2015 that they plan to purchase in the spring and summer of 2016.”

Vallejo ranks as the country’s No. 4 hottest housing market, down one spot from December. Other California cities named among the nation’s top 20: San Diego (No. 5), Sacramento (No. 6), Stockton (No. 8), Los Angeles (No. 10), Santa Rosa (No. 11), Oxnard (No. 12), Yuba City (No. 14), Modesto (No. 14), and Santa Cruz (No. 18). Eleven of those 12 cities made the hot list in December, with Santa Cruz returning to the mix in January.

Realtor.com predicts that Florida could challenge California this year as the nation’s top warm-weather housing market, but as of January, just two cities in that state — Palm Bay and Tampa — were named among the nation’s most sought-after.

(Photo: Flickr/Joe Parks)

Source: Pacific Union

Supply-Demand Imbalance and Low Mortgage Rates Drive California Home Price Growth


Image of arrows pointing up

Rising demand for real estate and shrinking supply have caused San Francisco to become one of the most expensive places to live in the U.S. since the beginning of the decade, while falling mortgage rates have boosted purchasing power.

According to an analysis by John Burns Real Estate Consulting, home price growth has outpaced income growth by 70 percent in the San Francisco metro area since 2001, the second highest rate in the country, behind Los Angeles. That figure includes the 44 percent benefit homebuyers have obtained from low mortgage rates, which have dropped from 7.2 percent in June 2001 to 3.97 percent for the week ended Dec. 17.

The analysis points out that California homeowners have benefited the most from the imbalance between supply and demand. Six of the nine U.S. housing markets where JBREC says that “home prices have risen faster than can be explained” are located in the Golden State, including San Jose, where they have outpaced incomes by 53 percent over the past 14 years.

Source: Pacific Union blog

(Image: Flickr/FutUndBeidl)

A Silicon Valley ZIP Code Remains America’s Most Expensive

 

ATHERTON NAMED NATION’S WEALTHIEST TOWN FOR THIRD STRAIGHT YEARatherton_mansion_sm
The prosperous Silicon Valley economy and a slim supply of homes for sale have once again vaulted a Bay Area community to the top of 2015’s list of America’s priciest ZIP codes.

That would be the San Mateo County town of Atherton and its 94027 ZIP code, which Forbes recently named as the nation’s most expensive for the third consecutive year. With a median home price of $10,564,038, homes in Atherton sell in an average of 106 days – fairly quickly given that eight-digit price tags are out of reach for most homebuyers. Forbes notes that Atherton is home to high-rolling, high-tech bigwigs including Facebook COO Sheryl Sandberg and HP CEO Meg Whitman.

Two other San Mateo County ZIP codes landed in the top 10: No 7. Woodside‘s 94062, with a median sales price of $5,533,534, and No. 10 Hillsborough’s 94010, where homes go for $4,951,458. ZIP codes in Santa Clara County’s Los Altos Hills (No. 11) and the Marin County communities of Belvedere (No. 13) and Ross (No. 20) also ranked near the top of the list.

 

Source: pacificunion.com

(Photo: Flickr/Ed Bierman)

California Unemployment Rate Falls to Half of Recession Peak

The Golden State’s unemployment rate dropped in August, reaching half of the level recorded during the depths of the recession five years ago. Bay Area jobless claims followed suit, falling from the previous month in all nine counties.goldenbearflag

According to the latest numbers from the California Employment Development Department, the state’s unemployment rate declined to 6.1 percent in August on a seasonally adjusted basis, down from a high of 12.2 percent in 2010. California added more than 36,000 jobs in August, 470,000 over the past year, and 2.06 million since the beginning of the economic recovery in February 2010.

Commenting on the data, Palo Alto-based Center for Continuing Study of the California Economy says that those jobs represent 14.3 percent growth over the past five-and-a-half years compared with the nationwide rate of 9.7 percent. The organization notes that most of August’s job growth was due to gains in the government sector, while the professional- and business-services sectors saw losses. Both trends may be seasonal, due to an earlier beginning to the school year and companies transitioning from contract to permanent employees.

Jobless claims fell in each of the Bay Area’s nine counties from July to August, bucking the previous month’s pattern of across-the-board increases. San Mateo County continues to have the state’s most robust job market, with an unemployment rate of 3.3 percent on a nonseasonally adjusted basis, followed by Marin (3.5 percent), San Francisco (3.6 percent), Santa Clara (4.0 percent), Napa (4.2 percent), and Sonoma (4.3 percent) counties.

The Bay Area has demonstrated remarkable improvement in job growth since unemployment levels peaked, which according to EDD historical data was generally in 2010. Santa Clara, Napa, and Sonoma counties offer excellent examples of this trend, as all three saw unemployment rates peak at more than 11 percent during the recession’s darkest days.

In fact, CCSCE says that Bay Area job levels are now 10.6 percent higher than their prerecession peaks, by far the most in the state and up from 10.2 percent in July.

(Photo: Flickr/eyeliam)

California is Home to Most of the Nation’s Priciest Zip Codes

402283_be5f150a9e188d1bf78a87f764741686 Seventy percent of the most expensive U.S. communities in which to purchase a home are located in the Golden State, with Silicon Valley of course well represented.

Using data from real estate listings portal Property Shark, Business Insider ranked the 20 priciest ZIP codes in America based on the median home sales price between January 2014 and June 2015. Fourteen of those ZIP codes are in California, although the country’s highest-dollar real estate market is actually on Long Island.

Business Insider ranks Sagaponack, New York — in tony The Hamptons – as the most expensive place in America to buy a home, with a median sales price of $5.13 million. Four other New York ZIP codes made the top 20, including another in The Hamptons and three in Manhattan.

Besides Miami’s 33109 ZIP code, the rest of the country’s most expensive neighborhoods are situated along the California coast. Five of Silicon Valley’s most exclusive communities landed on the list, with residents earning some of the highest salaries in the U.S.

Atherton‘s 94027 ranks as the country’s second-most expensive ZIP code, with a median sales price of $5.05 million. Residents of the San Mateo County town pull in a median household income of $220,583, the third highest of any community included on the list.

Palo Alto‘s 94301 ZIP code captured the No. 5 spot, with a median sales price of $2.83 million. Los Altos Hills‘ 94022 ranked No. 10 ($2.6 million), followed by Portola Valley’s 94028 (No. 11, $2.45 million) and Los Altos’ 94024 (No. 17, $2.3 million).

Home shoppers who are lucky enough to afford a property in one of those prestigious Silicon Valley communities will call the country’s most elite and affluent tech executives neighbors. Atherton is home to Google Chairman Eric Schmidt and Hewlett-Packard CEO Meg Whitman, while Google co-founder Sergey Brin lives in nearby Los Altos Hills. In Palo Alto, where Business Insider says that home prices have doubled over the past 10 years, Facebook’s Mark Zuckerberg owns five homes and even purchased four neighboring properties in order to protect his privacy.

The other Golden State communities ranked among the nation’s priciest are all in Southern California: four in Los Angeles County, three in Orange County, and one each in Santa Barbara and San Diego counties.

 

Source: Pacific Union

Photo: Compassionate California

Home Sellers Are Ready to Buy Again in 2014

The year 2013 was the year of the homebuyer, marked by multiple offers for virtually every desirable property on the market in Northern California. Bidding wars frequently pushed sales prices 10 to 15 percent above list.

Illustration of a person in front of a for-sale sign

But 2014 is shaping up to be the year of the seller.

After regaining equity in their homes last year, sellers are eager to get back into the market again, according to a recent survey by the California Association of Realtors (CAR).

More than two-thirds (69 percent) of home sellers purchased another home rather than renting after selling their previous residence in 2013, up from 47 percent in 2012 and only 12 percent in 2011.

“Much-improved housing market conditions in the last year have given sellers more confidence to own a home rather than to rent one,” CAR President Kevin Brown said in a statement accompanying the survey results. “With sellers being more positive about the future of home prices, the vast majority of sellers who are currently renting plan to buy again in the future.

“In fact, 70 percent of sellers who are currently renting said they would purchase another home, up from 22 percent in 2012.”

Sellers are more optimistic about repurchasing a home thanks to strong growth in home prices, record-low interest rates, and better financial situations at home, according to the CAR survey.

The reasons for selling changed significantly in just one year. In 2012, the majority of sellers sold primarily because of financial difficulties, but as home prices surged, a desire to trade up became the top reason for selling in 2013.

Others wanted to take advantage of low interest rates to finance their next home, while some sellers believed the price of their home had peaked and wanted to cash out.

Those survey results bode well for 2014, as more homeowners put their properties on the market and help to meet the demand of homebuyers — both first-time and move-up buyers.

 

Source: Pacific Union blog

(Image: Flickr/Scott Maxwell)