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

30-Year Mortgage Tops 4%

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious.

30-YEAR MORTGAGE RATES TOP 4 PERCENT
Fixed-rate mortgages last week reached new highs for 2015, with the average 30-year mortgage rising above 4 percent average for the first time in nearly a year, Freddie Mac reported.

Image of arrows pointing upThirty-year fixed-rate mortgages averaged 4.04 percent, up from 3.87 percent last week, and 15-year fixed-rate mortgages averaged 3.25 percent, up from 3.08 percent. One-year adjustable-rate mortgages averaged 2.53 percent, dropping from last week’s 2.59 percent average.

Last year at this time, 30-year rates averaged 4.20 percent, 15-year rates were at 3.31 percent, and one-year ARMs averaged 2.40 percent.

“Markets are responding to strong employment data,” said Freddie Mac economist Len Kiefer, in a statement accompanying the weekly interest rate report. “In May, the U.S. economy added 280,000 jobs. Moreover, job openings surged to 5.4 million in April, up over 20 percent from a year ago.”

2015: BEST YEAR IN REAL ESTATE SINCE 2006
The U.S. real estate market continues to improve and is on track for its best year since the peak of the housing bubble in 2006, according to an analysis by Realtor.com.

“This time, though, it’s no bubble,” said Realtor.com chief economist Jonathan Smoke. “Job growth is powering the surge in demand for homes. More than 3 million jobs have been created in the past 12 months. And more than 1 million jobs have been created for 25- to 34-year-olds, the age range in which most Americans buy their first home.”

Rising rental rates, meanwhile, are outpacing ring home prices. Record numbers of renting households have driven down apartment vacancies and sent rents soaring, Smoke said. It is now cheaper to buy rather than rent in 80 percent of U.S. counties.

NUMBER OF UNDERWATER BORROWERS FALLING
The number of homeowners who owe more than their home is worth continues to fall, with the San Jose and San Francisco metro areas leading the way, according to a new report from Zillow. But there are still plenty of mortgage holders who face a steep climb before their homes are no longer underwater.

The U.S. rate of negative equity among mortgaged homeowners 15.4 percent in the first quarter of 2015, down from 16.9 percent in the fourth quarter on 2014. San Jose, however, reported to lowest negative equity rate, 3.8 percent, followed by San Francisco at 6.1 percent.

The rate of negative equity improved in all of the 35 largest housing markets in the first quarter. But of those homeowners who are still underwater, more than half still owe 20 percent more than the value of their home, making it difficult for them to get out from under their mortgage.

“The depth of negative equity remains incredibly worrisome,” Zillow concluded. “Millions of Americans are so far underwater, it’s likely they may not regain equity for up to a decade or more at this pace.”

 

Source: Pacific Union blog

(Illustration: Flickr/FutUndBeidl)

SF Single Family Homes value up

According to the S&P/Case-Shiller Home Price Index, single-family home values in the San Francisco MSA ticked up 0.5% from December 2013 to January 2014. Up 22.1% on a year-over-year basis, the San Francisco Index remains 16.9% below a May 2006 peak.

For the broader 10-City composite, home values were unchanged from December to January and are up 13.5% year-over-year but remain 20.4% below a June 2006 peak.

The Sun Belt showed the five highest monthly returns. Las Vegas was the leader with an increase of 1.1% followed by Miami at +0.7%. San Diego showed its best January performance of 0.6% since 2004. San Francisco and Tampa trailed closely at +0.5% and +0.4%. Elsewhere, New York and Washington D.C. stood out as they continued to improve and posted their highest year-over-year returns since 2006. Dallas and Denver are the only cities to have reached new record peaks while Detroit remains the only city with home prices below those of 14 years ago.

While home values ticked up for the top and bottom thirds of the San Francisco market, they slipped for the middle tier, the third consecutive decline for the middle of the market which hasn’t happened since the third quarter of 2011.

S&P/Case-Shiller Index San Francisco Price Tiers: January 2014 (www.SocketSite.com)

The bottom third (under $488,183 at the time of acquisition) gained 0.6% from December to January (up 32.8% YOY); the middle third dropped 0.5% from December to January (up 21.9% YOY); and the top third (over $788,312 at the time of acquisition) gained 1.0% from December to January, up 20.0% year-over-year.

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA are back above August 2003 levels (37% below an August 2006 peak); the middle third slipped back to August 2004 levels (18% below a May 2006 peak); and the top third is just below July 2005 levels and within 4% of an August 2007 peak.

Condo values in the San Francisco MSA slipped 0.3% from December to January 2014, the fourth month in a row without any gains. That being said, condo values are up 23.9% year-over-year and within 5.1% of their December 2005 peak.

S&P/Case-Shiller Condo Price Changes: January 2014 (www.SocketSite.com)

Our standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the “San Francisco” index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).

 

Source: SocketSite.com