Housing Costs Stretch Bay Area’s Geographic Footprint

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Altamont Pass as seen from the San Joaquin Valley.

MORE THAN 600,000 LONG-DISTANCE COMMUTERS POUR INTO THE BAY AREA EACH DAY
The Bay Area’s roaring job market is attracting workers from all over Northern California, but an increasing number of them don’t live within the traditional nine-county region, largely due to housing-affordability issues.

Citing research from the Bay Area Council, The Mercury News reports that, on average, 602,000 vehicles enter and leave the nine-county region each weekday from what is called the “Northern California Megaregion.” Not including the Bay Area, this region includes six counties in the Sacramento area, three in the Northern San Joaquin Valley, and three in Monterey.

A quick look at housing costs and price growth goes a long way to explaining why so many workers endure such brutal daily commutes. The Bay Area’s 2015 median home value of $750,000 is three times more expensive than in San Joaquin, Stanislaus, and Merced counties combined. And while home values in San Francisco Countyhave increased 49.1 percent over the last 10 years, they decreased by 48.4 percent in Merced County over that same time period.

So what can be done to keep more of these workers off the road and ease Northern California’s worsening gridlock? The Bay Area Council recommends investing in public transportation, streamlining the housing-permit process in urban job centers, and growing employment in the Sacramento and San Joaquin Valley regions.

Source: Pacific Union blog

(Photo: Flickr/Michael Patrick)

Bay Area’s Cities – Nation’ Best Prepared for the Future

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Good news for Bay Area residents and homeowners who are in it for the long haul: Our region’s two largest cities have been named the nation’s most prepared to meet the challenges of the future.

That’s according to findings from a recent conference by Harvard University and computer giant Dell, which ranked the top 25 most future-ready cities in America based on three major economic criteria:  the ability to attract innovative citizens, businesses that thrive on collaboration, and infrastructure strength. Based on those factors, San Jose stands as the most future-prepared city in the U.S., ranking high for its job market, worker productivity, and wage growth. San Francisco ranks No. 2 for future-readiness, earning points for human capital, innovation, and investment.

San Jose and San Francisco also had some of the highest percentages of college-educated residents in the country, although the summit found that both trail other top future-ready cities in terms of infrastructure.

 

Source: Pacific Union blog

New Construction in San Francisco- 62,000 Housing Units On The Pipeline

San Francisco’s housing pipeline totals a record of 62,000 units now. This number includes  proposals for over 3,000 units that have been submitted to the City in the forth quarter of last year and 8,700 units which are already under construction and should be ready for occupancy within the next year or two.

In addition, there are another 12,900 net-units for which building permits have either been issued, approved or have been requested, which is double the number from the quarter before. 23,100 units are in projects that have been approved but not yet permitted. These are large, long term projects that may span decades, such as Candelstick, Treasure Island and Parkmerced.

Finally, there are proposals for another 17,900 units of housing being reviewed by the City’s Planning Department.

Out of the 62,000 new construction units, 8,900 will be Bellow the Market Rate ( BMR’s).

At the same time, demand for new construction condos in San Francisco has slowed and sone indexes suggest  year-over-year slight declines in value.

 

Source: SocketSite.com

San Francisco’ s Millennials Are the Nation’s Highest Taxed


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SAN FRANCISCO MILLENNIALS FACE HIGHEST TAX BURDEN IN U.S.
Bay Area millennials are already pessimistic about their housing options over the next few years, so news that they fork over more in taxes than their counterparts in any other area of the country is unlikely to come as any consolation.

In a recent analysis, SmartAsset found that although millennial workers in San Francisco earn the second-highest median annual wages in the country — almost $60,000 — they also have the highest effective tax rate, at 26.84 percent. The average San Francisco millennial pays just over $16,000 in taxes, including federal, state, and local fees. San Jose millennials have an effective tax rate of 22.91 percent, shelling out nearly $12,000 each year, 11thhighest in the U.S.

As SmartAsset points out, one key difference between millennials and previous generations is that the barrier to homeownership is greater than in the past. In 1980, 44 percent of adults under 35 owned a home, compared with 35 percent today.

 

Source: Pacific Union

(Photo: Flickr/Phillip Ingham)

 

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

U.S Home Sales Projected to Reach Decade High in 2016

U.S. home sales should climb in 2016 to levels we haven’t seen since the last housing boom — with millennials leading the charge — as continued economic prosperity appears to be on the horizon.cb

In its 2016 Housing Forecast, Realtor.com projects that new and existing home sales will reach 6 million in 2016, the highest level since 2006. According to the report, home starts will see a 12 percent annual uptick, while sales of new homes will grow by 16 percent year over year. Home price appreciation will moderate to 3 percent next year, which Realtor.com Chief Economist Jonathan Smoke says signifies that the housing market is normalizing.

Millennials — defined here as those ages 25-34 — are expected to make up the largest percentage of homebuyers in 2016, spurred on in part by growing incomes. Generation Y buyers are most concerned with neighborhood safety and home-construction quality, and they also want a reasonable commute.

Having rebounded from the recession, Gen Xers on the younger side of the spectrum (ages 35-44) will account for the second-largest pool of buyers. Two-thirds of this demographic are move-up buyers and will be trading up for a larger property or a nicer neighborhood.

Older Americans ages 65-74, the third-largest projected buyer demographic, will look to do the exact opposite, selling their spacious homes for smaller, newly constructed ones. These homeowners are expected to put their properties on the market in March or April and will place an emphasis on customization when searching for their next home.

Realtor.com predicts the U.S. economy’s health to hold in 2016, with the GDP increasing by 2.5 percent, up from 2.1 percent growth in 2015. Unemployment will decline from 5 percent at the end of 2015 to 4.8 percent by the end of 2016, while the number of jobs created — 2.5 million — will remain roughly unchanged. The forecast warns that tougher access to credit and rising home prices could ultimately stifle demand for housing and temper the benefits of the thriving economy.

(Photo: Flickr/Sean Creamer)

Source: Pacific Union

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


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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)

San Francisco Bay Area Companies on 2016 Best Places to Work Lists

 

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Airbnb’s San Francisco headquarters.

 

Nearly one-third of America’s 50 best companies to work for are located right here in the Bay Area, and their happy, highly paid employees will likely continue to drive housing demand for the foreseeable future.

In its annual Employee Choice Awards, Glassdoor ranks the 50 best large U.S. companies based on workers’ reviews of their employers. Employees rate their companies on criteria such as compensation and benefits, the CEO, career opportunities, and workplace culture.

Bay Area-based tech companies have a heavy presence at the top of the list, taking five of the top 10 spots for employee satisfaction. This year, San Francisco-based vacation-rental website Airbnb ranks No. 1 in the U.S. for employee happiness, with workers awarding the company an overall score of 4.6 on a five-star scale. Glassdoor puts the average annual salary for Airbnb software developers at about $132,000.

Foster City-based insurance software maker Guidewire Software, which didn’t rank in the top 50 on last year’s list, made great strides on the worker-satisfaction front, zipping into the No. 3 spot with an overall score of 4.5. The company’s software engineers earn an average of $117,000 per year, with senior positions pulling down an additional $26,000.

Three of Silicon Valley’s best-known tech giants also landed in the top 10: Facebook (No. 5), LinkedIn (No. 6), and Google (No 8). LinkedIn and Facebook moved up the list from last year, while Google fell from the top spot. Software developers earn an average annual salary of $125,000 at Facebook, $132,000 at LinkedIn, and $127,000 at Google.

Ten other Bay Area-based companies were rated among the top 50 for best employee morale, six of them from the tech world. San Jose’s Adobe Systems ranked No. 19, followed by Protiviti (No. 23), Apple (No. 25), Twitter (No. 26), Salesforce.com (No. 32), and Workday (No. 35).

But Bay Area techies aren’t the only ones satisfied with their employment situation. Biotech company Genentech was No. 34, followed by architecture and design firm Gensler at No. 38. Two companies from the energy sector also cracked the top 50: San Ramon‘s Chevron (No. 39) and San Mateo-based SolarCity (No.50).

If current job-growth patterns persist, there will be no shortage of workers moving to the Bay Area in search of both a higher salary and greater career satisfaction. In a recent report, the Center For Continuing Study of the California Economy said that Bay Area companies were responsible for nearly half of the state’s job growth in October.

(Photo: Flickr/Sharon Hahn Darlin)

San Francisco Real Estate Update- October 2015

SAN FRANCISCO – SINGLE-FAMILY HOMESPowerPoint Presentation

The pace of single-family home sales in San Francisco has been remarkably consistent since the early summer, and in October, properties sold in an average of 28 days, one day faster than in September. The median sales price was up on both an annual and monthly basis, finishing the month at $1,295,000.

Competition for homes in the city remains intense, with the average single-family home selling for 110.4 percent of original price and the MSI falling to 1.5.


SAN FRANCISCO – CONDOMINIUMSPowerPoint Presentation

It has taken more than $1 million to buy a San Francisco condominium for most of this year, and that pattern held fast in October, with the median sales price at $1,111,500. Sellers took home an average of 108.4 percent of asking price, a bit less than in September.

As with single-family homes, the MSI for San Francisco condominiums dropped from the previous month to end October at 1.9. Properties sold in an average of 27 days, in line with what we observed earlier in the summer.