This coincides with the uptake in buyers, increased properties in escrow, low mortgage rates, lowered home prices.....all adding up to a turn-around in the market.
Tuesday March 24, 2009, 5:48 pm EDT
The recession will ease by the end of this year and companies will begin adding workers, signaling the end of the worst economic downturn since the Great Depression.
It was the 64th day of the Obama administration and Chicago-based Dow Jones Indexes assembled a group of financial experts to assess the impact of government actions, whether they will work to stem the recession and what opportunities that might present investors.
The recession has affected every region of the country and nearly every sector of the economy, said Gus Faucher, director of macroeconomics at Moody's Economy.com, which conducts independent research and provides economic forecasts.
"It's really unprecedented in the U.S. to have nearly the entire country in a recession simultaneously," he said.
The good news is there's an end in sight.
The economy will pull out of the recession at the end of this year, marking a duration of 24 months, about twice as long as the average post-World War II recession, Faucher said.
The unemployment rate is expected to peak at nearly 10 percent in the first half of 2010. Without the $787 billion government stimulus package, he estimated job losses would have continued into the second half of the year and peaked at about 12 percent.
"That would take what is now a severe recession and actually turn it into a deep depression," he said. "We think the fiscal stimulus package is vital in turning around attitudes toward the economy."
He said we are at or near a stock market bottom and stock prices should soon stabilize.
That certainly wasn't the case so far this week. The Dow Jones industrial average gained 498 points on Monday but dropped 115 points, or 1.5 percent, on Tuesday.
Home sales will turn around by midyear and home prices will begin recovering by the end of this year after bottoming out at 35 percent of their value from peak to trough. Home prices won't return to their values of a few years ago during the boom, but will recover from current lows, he said.
Banks will likely begin seeing improvement in capital as the government program to remove bad assets kicks in and the Federal Reserve provides more economic support. Faucher predicted major bank and financial services company failures will abate in the second half of this year and credit will begin to move again.
Those improvements and additional government spending will provide investors some opportunities in companies that own bridges, toll roads and utilities. It also will drive growth in areas of green energy production.
The stimulus package will spend $50 billion on roads, bridges, utilities and other infrastructure, said Craig Noble, portfolio manager, for Brookfield Redding LLC, a Chicago-based investment manager of global real estate and infrastructure securities.
He sees a potential sweet spot for investors in companies that own the assets that will benefit from the needed spending. He said the stimulus package is only a small portion of government spending on transportation and utilities. Congress must reauthorize this year a multiyear transportation bill that provides hundreds of billions of dollars in spending and sets priorities for the next five years or more.
"The infrastructure class currently offers a unique and compelling investment case with trillions needed to be spend across the globe in coming years," he said.
Stimulus packages rolled out in Canada, Europe, Australia, South America and China show the global nature of the infrastructure asset class, he said.
Obama administration polices that emphasize renewable energy such as wind power will also push billions of dollars into building electricity-carrying power lines and the towers to hold them. That construction is needed to carry wind power from expanding wind turbine farms in the Midwest to population centers in the Eastern United States.
Personal Finance Writer David Pitt reported from Des Moines, Iowa.
Thursday, March 26, 2009
Tuesday, March 24, 2009
Filming for TV pilot in S.F. to cause traffic delays
For those of you planning a trip to or around AT&T Park please note the following media announcement regarding street closures and traffic delays.....
MEDIA ALERT -- I-280 N/B KING STREET EXIT TO BE CLOSED SATURDAY MARCH
> 28 - WEDNESDAY APRIL 1ST (WEEKDAY MORNING COMMUTE HOURS
> EXCEPTED) and I-280 S/B KING STREET ENTRANCE TO BE CLOSED SUNDAY MARCH
> 29 from 1 PM - 4 PM FOR FILMING OF TV PILOT IN SAN FRANCISCO
>
> NORTHBOUND TRAFFIC ON I-280 WILL BE DIVERTED TO 6TH STREET due to the
> closure of the King Street off-ramp at Sixth Street in San Francisco
> on Saturday, March 28 at 5:00 AM through Sunday, March 29 until 10
> p.m. and on Monday, March 30, Tuesday March 31st and Wednesday, April
> 1 from 10 AM - 9 PM each day leaving the exit ramp available after 9
> PM - 10 AM to accommodate the weekday commute hours. Northbound
> traffic will be diverted onto the Sixth Street exit with detours set
> up to Embarcadero.
>
> KING STREET ENTRANCE RAMP FOR SOUTHBOUND I-280 will be closed on
> Sunday March 29th from 1 PM - 4 PM. Southbound traffic will be
> detoured from King Street to MARIPOSA STREET OR SIXTH STREET AT
> BRANNAN.
>
> The closures are to facilitate the filming of action sequences for the
> NBC Universal TV drama pilot "Trauma," which features emergency
> responders working a tanker truck crash.
>
> The simulated freeway crash involving several cars and a tanker truck
> is scheduled for Saturday March 28 and will include aerial helicopter
> activity. The scenes to be filmed on Sunday will include an explosion
> with a fireball and billowing smoke. There will be aerial helicopter
> activity throughout the day.
>
> Throughout filming, there will also be intermittent traffic stoppages
> at the entrance to I-280 S/B at both 6TH Street and KING STREET
> whenever there is a stunt being filmed or a helicopter landing or
> taking off. These brief intermittent stoppages will take place
> randomly during filming on the weekend and on the weekdays between 10
> AM and 3 PM.
>
> The California Highway Patrol, the San Francisco Police and Fire
> Departments and other emergency service departments for the City of
> San Francisco and the State of California have been notified in
> advance of this permitted filming.
>
> NBC is currently shooting "Trauma" (working title) in San Francisco
> with the cooperation of the San Francisco Film Commission, the
> California State Film Commission, CALTRANS, the CHP and the SFPD.
> Dario Scardapane is writer and executive producer of the project,
> which will be directed by executive producer Jeffrey Reiner (NBC's
> "Friday Night Lights"). Peter Berg ("Hancock", "Friday Night
> Lights") and Sarah Aubrey ("Friday Night Lights")are also executive
> producers of the pilot from Universal Media Studios in association
> with Film 44. The stars include Derek Luke ("Notorious"), Cliff
> Curtis ("10,000 B.C"), Anastasia Griffith ("Damages"), Aimee Garcia
> ("George Lopez"), Kevin Rankin ("Friday Night Lights") with Jamey
> Sheridan ("Law & Order: Criminal Intent).
>
>
> MEDIA CONTACTS:
> Jessica Nevarez, Universal Media Studios, 818-777-0543 Melissa
> Armstrong, NBC Entertainment, 818-777-2846 Joe Arellano, Deputy
> Director, Mayor's Communications Office,
> 415-554-6163
> Stefanie Coyote, Executive Director, San Francisco Film Commission,
> 415-554-6241
MEDIA ALERT -- I-280 N/B KING STREET EXIT TO BE CLOSED SATURDAY MARCH
> 28 - WEDNESDAY APRIL 1ST (WEEKDAY MORNING COMMUTE HOURS
> EXCEPTED) and I-280 S/B KING STREET ENTRANCE TO BE CLOSED SUNDAY MARCH
> 29 from 1 PM - 4 PM FOR FILMING OF TV PILOT IN SAN FRANCISCO
>
> NORTHBOUND TRAFFIC ON I-280 WILL BE DIVERTED TO 6TH STREET due to the
> closure of the King Street off-ramp at Sixth Street in San Francisco
> on Saturday, March 28 at 5:00 AM through Sunday, March 29 until 10
> p.m. and on Monday, March 30, Tuesday March 31st and Wednesday, April
> 1 from 10 AM - 9 PM each day leaving the exit ramp available after 9
> PM - 10 AM to accommodate the weekday commute hours. Northbound
> traffic will be diverted onto the Sixth Street exit with detours set
> up to Embarcadero.
>
> KING STREET ENTRANCE RAMP FOR SOUTHBOUND I-280 will be closed on
> Sunday March 29th from 1 PM - 4 PM. Southbound traffic will be
> detoured from King Street to MARIPOSA STREET OR SIXTH STREET AT
> BRANNAN.
>
> The closures are to facilitate the filming of action sequences for the
> NBC Universal TV drama pilot "Trauma," which features emergency
> responders working a tanker truck crash.
>
> The simulated freeway crash involving several cars and a tanker truck
> is scheduled for Saturday March 28 and will include aerial helicopter
> activity. The scenes to be filmed on Sunday will include an explosion
> with a fireball and billowing smoke. There will be aerial helicopter
> activity throughout the day.
>
> Throughout filming, there will also be intermittent traffic stoppages
> at the entrance to I-280 S/B at both 6TH Street and KING STREET
> whenever there is a stunt being filmed or a helicopter landing or
> taking off. These brief intermittent stoppages will take place
> randomly during filming on the weekend and on the weekdays between 10
> AM and 3 PM.
>
> The California Highway Patrol, the San Francisco Police and Fire
> Departments and other emergency service departments for the City of
> San Francisco and the State of California have been notified in
> advance of this permitted filming.
>
> NBC is currently shooting "Trauma" (working title) in San Francisco
> with the cooperation of the San Francisco Film Commission, the
> California State Film Commission, CALTRANS, the CHP and the SFPD.
> Dario Scardapane is writer and executive producer of the project,
> which will be directed by executive producer Jeffrey Reiner (NBC's
> "Friday Night Lights"). Peter Berg ("Hancock", "Friday Night
> Lights") and Sarah Aubrey ("Friday Night Lights")are also executive
> producers of the pilot from Universal Media Studios in association
> with Film 44. The stars include Derek Luke ("Notorious"), Cliff
> Curtis ("10,000 B.C"), Anastasia Griffith ("Damages"), Aimee Garcia
> ("George Lopez"), Kevin Rankin ("Friday Night Lights") with Jamey
> Sheridan ("Law & Order: Criminal Intent).
>
>
> MEDIA CONTACTS:
> Jessica Nevarez, Universal Media Studios, 818-777-0543 Melissa
> Armstrong, NBC Entertainment, 818-777-2846 Joe Arellano, Deputy
> Director, Mayor's Communications Office,
> 415-554-6163
> Stefanie Coyote, Executive Director, San Francisco Film Commission,
> 415-554-6241
Tuesday, March 17, 2009
Federal and California Tax Credits
I know I have posted blogs about these tax credits already however I found the following to be very straight forward and may be helpful to you if you are confused about what tax credits are available.
The good news is that there are both Federal and California Tax Credits available for certain qualifying buyers of homes that meet the requirements. Note that the Federal and California tax credits are very different from each other, and the methods for claiming the credit are likewise very different.
This summary is provided for general information only and does not apply to any individual situation. Remember to consult with your own tax advisors for how this applies to your personal situation.
1. FEDERAL TAX CREDIT (FIRST-TIME BUYERS ONLY)
Amount: $8,000 if home purchased in 2009, but no more than 10% of the purchase price of the home (half that amount if married filing separately). $7,500 if purchased before 2009.
Expires: December 1, 2009
Only First-Time Homebuyers Can Claim the Credit: In general, buyers can claim the credit if they are a first-time homebuyer. Buyers are considered a first-time homebuyer if: They purchased their main home after April 8, 2008, and before December 1, 2009. The buyer (and spouse, if married) did not own any other main home during the 3-year period ending on the date of purchase.
Main home. A main home is the one the buyer lives in most of the time. Not limited to new construction. It can be a house, houseboat, house-trailer, cooperative apartment, condominium, or other type of residence.
The Credit Cannot Be Claimed If: The buyer’s modified adjusted gross income is $95,000 or more ($170,000 or more if married filing jointly). The buyer is a nonresident alien. The home is located outside the United States. The buyer acquired their home by gift or inheritance. The buyer acquired their home from a related person.
No Repayment of Credit: There is no repayment of this credit if the home is purchased in 2009. However, the buyer must repay the credit if the home ceases to be their main home within the 36-month period beginning on the purchase date. (Note: For homes purchased before 2009, the tax credit is subject to repayment rules.)
2. CALIFORNIA TAX CREDIT (NEW CONSTRUCTION PURCHASES ONLY)
Amount: Up to $10,000. California allows qualified new home buyers a total tax credit amount equal to either five percent of the purchase price or $10,000, whichever is less.
Note: Taxpayers must apply the total tax credit in equal amounts over three successive taxable years (maximum of $3,333 per year) beginning with the taxable year (2009 or 2010) in which the new home is purchased. Special rules apply to married/RDP (Registered Domestic Partners) taxpayers filing separately.
Expires: March 1, 2010.
All Qualified Buyers Can Claim This Credit, Not Just First-Time Home Buyers: This tax credit is available for qualified buyers who on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence. The buyer must reside in the new home for a minimum of two years immediately following the purchase date.
Qualified Buyer: A taxpayer who purchases a Qualified Principal Residence that is purchased to be the principal residence of the taxpayer for a minimum of two years, and that is eligible for the homeowner’s exemption (under California Revenue and Taxation Code Section 218).
Qualified Principal Residence – New Construction: Any of the following can qualify if it is new construction (that is, it has never been occupied), is the buyer’s principal residence, and is subject to property tax, whether real or personal property: a single family residence, a condominium, a unit in a cooperative project, a houseboat, a manufactured home, or a mobile home.
First-Come, First-Served (or You Snooze, You Lose): California has allocated $100,000,000 for this tax credit. Buyers must apply for credit allocation from the Franchise Tax Board (“FTB”). Applications will be reviewed and credit allocations will be made on a first-come, first-served basis. Once $100,000,000 has been allocated, the tax credit will no longer be available.
How to apply: Within one week (seven calendar days) after the close of escrow:
· The seller must complete Part I of Form 3528-A, Application for New Home Credit, certifying that the home has never been occupied, and provide a copy to the buyer or escrow person.
· The buyer will complete Parts II & III of Form 3528-A.
· The escrow person on behalf of the seller and buyer will fax the completed Form 3528-A to FTB at 916.845.9754, and provide a copy to the buyer.
Fax is the only delivery method that will be accepted by, and considered for credit allocation by, FTB, as the date and time stamp on the fax will determine the order in which credits are allocated.
TIME IS OF THE ESSENCE!
1. Remember, when the allocated amount of funds ($100,000,000) has been approved for credit by the FTB, there are no more tax credits available.
2. Also, Buyers only have one week after close of escrow to apply for the credit.
For more information on the California tax credit (and a running total of the amount of credit left to be allocated) go to: New Home Credit
or call the Franchise Tax Board at: 888.792.4900 (press 5)
The good news is that there are both Federal and California Tax Credits available for certain qualifying buyers of homes that meet the requirements. Note that the Federal and California tax credits are very different from each other, and the methods for claiming the credit are likewise very different.
This summary is provided for general information only and does not apply to any individual situation. Remember to consult with your own tax advisors for how this applies to your personal situation.
1. FEDERAL TAX CREDIT (FIRST-TIME BUYERS ONLY)
Amount: $8,000 if home purchased in 2009, but no more than 10% of the purchase price of the home (half that amount if married filing separately). $7,500 if purchased before 2009.
Expires: December 1, 2009
Only First-Time Homebuyers Can Claim the Credit: In general, buyers can claim the credit if they are a first-time homebuyer. Buyers are considered a first-time homebuyer if: They purchased their main home after April 8, 2008, and before December 1, 2009. The buyer (and spouse, if married) did not own any other main home during the 3-year period ending on the date of purchase.
Main home. A main home is the one the buyer lives in most of the time. Not limited to new construction. It can be a house, houseboat, house-trailer, cooperative apartment, condominium, or other type of residence.
The Credit Cannot Be Claimed If: The buyer’s modified adjusted gross income is $95,000 or more ($170,000 or more if married filing jointly). The buyer is a nonresident alien. The home is located outside the United States. The buyer acquired their home by gift or inheritance. The buyer acquired their home from a related person.
No Repayment of Credit: There is no repayment of this credit if the home is purchased in 2009. However, the buyer must repay the credit if the home ceases to be their main home within the 36-month period beginning on the purchase date. (Note: For homes purchased before 2009, the tax credit is subject to repayment rules.)
2. CALIFORNIA TAX CREDIT (NEW CONSTRUCTION PURCHASES ONLY)
Amount: Up to $10,000. California allows qualified new home buyers a total tax credit amount equal to either five percent of the purchase price or $10,000, whichever is less.
Note: Taxpayers must apply the total tax credit in equal amounts over three successive taxable years (maximum of $3,333 per year) beginning with the taxable year (2009 or 2010) in which the new home is purchased. Special rules apply to married/RDP (Registered Domestic Partners) taxpayers filing separately.
Expires: March 1, 2010.
All Qualified Buyers Can Claim This Credit, Not Just First-Time Home Buyers: This tax credit is available for qualified buyers who on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence. The buyer must reside in the new home for a minimum of two years immediately following the purchase date.
Qualified Buyer: A taxpayer who purchases a Qualified Principal Residence that is purchased to be the principal residence of the taxpayer for a minimum of two years, and that is eligible for the homeowner’s exemption (under California Revenue and Taxation Code Section 218).
Qualified Principal Residence – New Construction: Any of the following can qualify if it is new construction (that is, it has never been occupied), is the buyer’s principal residence, and is subject to property tax, whether real or personal property: a single family residence, a condominium, a unit in a cooperative project, a houseboat, a manufactured home, or a mobile home.
First-Come, First-Served (or You Snooze, You Lose): California has allocated $100,000,000 for this tax credit. Buyers must apply for credit allocation from the Franchise Tax Board (“FTB”). Applications will be reviewed and credit allocations will be made on a first-come, first-served basis. Once $100,000,000 has been allocated, the tax credit will no longer be available.
How to apply: Within one week (seven calendar days) after the close of escrow:
· The seller must complete Part I of Form 3528-A, Application for New Home Credit, certifying that the home has never been occupied, and provide a copy to the buyer or escrow person.
· The buyer will complete Parts II & III of Form 3528-A.
· The escrow person on behalf of the seller and buyer will fax the completed Form 3528-A to FTB at 916.845.9754, and provide a copy to the buyer.
Fax is the only delivery method that will be accepted by, and considered for credit allocation by, FTB, as the date and time stamp on the fax will determine the order in which credits are allocated.
TIME IS OF THE ESSENCE!
1. Remember, when the allocated amount of funds ($100,000,000) has been approved for credit by the FTB, there are no more tax credits available.
2. Also, Buyers only have one week after close of escrow to apply for the credit.
For more information on the California tax credit (and a running total of the amount of credit left to be allocated) go to: New Home Credit
or call the Franchise Tax Board at: 888.792.4900 (press 5)
Thursday, March 12, 2009
Real Estate Rebound.....has the bottom passed us by?
I have definitely noticed an upsurge of buyers at my listing at 1708 Fell St. unit 2 in S.F. I recently posted an entry in my Blog about a home in S.F. that received 41 offers, 20 of them over asking. When I was out on tour last Sunday looking at open homes in Pacifica I found the homes filled with eager buyers looking for deals. I believe the combination of lower pricing, available low interest rates and the stimulus package has unleashed buyers that have sitting back watching the market over the last year.
If this is a sign of the market rebounding then the bottom has already passed us by. As you know the news media is always reporting on doom and gloom however last night Channel 5 CBS news did a report on the signs of a rebound in S.F. If you missed it go to: Real Estate Rebound Video from CBS5.com
With the pick up in buyer activity there is also a pick up in lending activity. The good news is that if you have good credit and work history there are great loans to be had. The challenge is going to be getting a pre-approval in a timely matter. If you have already been recently pre-approved for a mortgage then you are in good shape to make offers. If you are not yet pre-approved and thinking of buying in the next two months then you must get pre-approved before offers can be made. I warn you, the paperwork and documentation needed is extensive; which is one of the reasons why it is taking longer to get pre-approvals now.
Please let me know if you have any questions or need recommendations for a good mortgage broker. Let’s go house hunting!
If this is a sign of the market rebounding then the bottom has already passed us by. As you know the news media is always reporting on doom and gloom however last night Channel 5 CBS news did a report on the signs of a rebound in S.F. If you missed it go to: Real Estate Rebound Video from CBS5.com
With the pick up in buyer activity there is also a pick up in lending activity. The good news is that if you have good credit and work history there are great loans to be had. The challenge is going to be getting a pre-approval in a timely matter. If you have already been recently pre-approved for a mortgage then you are in good shape to make offers. If you are not yet pre-approved and thinking of buying in the next two months then you must get pre-approved before offers can be made. I warn you, the paperwork and documentation needed is extensive; which is one of the reasons why it is taking longer to get pre-approvals now.
Please let me know if you have any questions or need recommendations for a good mortgage broker. Let’s go house hunting!
Wednesday, March 11, 2009
Here are some useful, interesting and/or fun websites for San Francisco and the Bay Area. Hope you enjoy them.
Everything within walking distance to your home
Chronicle list of top 100 Bay Area Restaurants
Chronicle MAP of top 100 Bay Area Restaurants
Chronicle Top 20 Wines under $40.00
San Francisco Biking Resources
Bay Area Hiking Trails
S.F. Neighborhood news and information
Bay Area Public Transportation
Bay Area Trip Planner and Traffic Conditions
S.F. neighborhood crime maps
San Mateo Crime Maps
Disaster Prepardness,Information and Resources
San Mateo County Recycling Resources
S.F. Recycling Resources
Chronicle list of top 100 Bay Area Restaurants
Chronicle MAP of top 100 Bay Area Restaurants
Chronicle Top 20 Wines under $40.00
San Francisco Biking Resources
Bay Area Hiking Trails
S.F. Neighborhood news and information
Bay Area Public Transportation
Bay Area Trip Planner and Traffic Conditions
S.F. neighborhood crime maps
San Mateo Crime Maps
Disaster Prepardness,Information and Resources
San Mateo County Recycling Resources
S.F. Recycling Resources
Tuesday, March 10, 2009
Are you on the fence about home ownership?
With all the doom and gloom in the media many renters are in a quandry about whether now is the time to take advantage of the buyers market. If you are tired of paying your landlords mortgage yet not sure if you should enter the world of homeownership here are some things to consider.....
Do you need tax write offs?
Mortgage Interest is one of the biggest tax incentives to owning a home. The interest you pay on your mortgage is tax-deductible up to $1 million.
You can also deduct the local property taxes that you pay each year which applies to your principle home and any others you may own.
You may also be able to deduct the points that were paid to the lender to secure your mortgage.
First-time home buyer tax credit of $8,000 that will not have to be repaid if you keep your home for at least three years.
Mortgage Insurance (PMI or MI) can be deducted in most cases for mortgages issued after 2006 and up to 2010 (may be extended by congress). There are income limits so talk to your tax professional.
When you are ready to sell you will make up to $250,000 in tax-free profit if single and up to $500,00 if married.
Home pricing is dropping and mortgage rates are low and you can't ask for a better combination if you are looking to buy. However none of this matters if you can't qualify for financing. With today's tougher economy lenders have tightened their standards for all types of mortgage financing. There are many factors involved in determining what interest rate you qualify for or the type of loan you can get. Talking with a good mortgage consultant will help you determine if there is a loan that is right for you and your financial situation. If you need a recommendation for a good mortgage broker, give me a call.
Do you need tax write offs?
Mortgage Interest is one of the biggest tax incentives to owning a home. The interest you pay on your mortgage is tax-deductible up to $1 million.
You can also deduct the local property taxes that you pay each year which applies to your principle home and any others you may own.
You may also be able to deduct the points that were paid to the lender to secure your mortgage.
First-time home buyer tax credit of $8,000 that will not have to be repaid if you keep your home for at least three years.
Mortgage Insurance (PMI or MI) can be deducted in most cases for mortgages issued after 2006 and up to 2010 (may be extended by congress). There are income limits so talk to your tax professional.
When you are ready to sell you will make up to $250,000 in tax-free profit if single and up to $500,00 if married.
Home pricing is dropping and mortgage rates are low and you can't ask for a better combination if you are looking to buy. However none of this matters if you can't qualify for financing. With today's tougher economy lenders have tightened their standards for all types of mortgage financing. There are many factors involved in determining what interest rate you qualify for or the type of loan you can get. Talking with a good mortgage consultant will help you determine if there is a loan that is right for you and your financial situation. If you need a recommendation for a good mortgage broker, give me a call.
Friday, March 6, 2009
Multiple offers on homes? Buyers are finding great "deals" too good to pass up.
I know it's hard to imagine in this market however a property that shows real value will not only sell, it may also get multiple offers. There are many "deals" to be had for serious buyers.
Many homes that are bank owned are getting multiple offers including over asking due to the very attractive asking prices. A fixer home in the Excelsior district in S.F. recently received 42 offers with half over asking.
A property in Pacifica in a very desirable neighborhood sold in 21 days $50,000 below asking.
Even with all the doom and gloom of the media and the message that houses are not selling......when consumers qualify for conventional or FHA loans and they recognize good value, the offers do come.
Many homes that are bank owned are getting multiple offers including over asking due to the very attractive asking prices. A fixer home in the Excelsior district in S.F. recently received 42 offers with half over asking.
A property in Pacifica in a very desirable neighborhood sold in 21 days $50,000 below asking.
Even with all the doom and gloom of the media and the message that houses are not selling......when consumers qualify for conventional or FHA loans and they recognize good value, the offers do come.
Tuesday, March 3, 2009
March 2009 Market Update
Foreclosure Sales in San Francisco
San Francisco has the lowest foreclosure rate of any county in the Bay Area, but that rate is accelerating. Of the 4600+ SF home sales reported in MLS in the last 12 months, sales of REO (bank-owned) properties equaled only 3%, but by last November that had increased to 10%, and as of 2/17/09, they constituted over 15% of all houses and condos currently pending sale. 69% of city REO activity is in houses; 22% in condos; 8% in 2-4 unit buildings; and 1% in TICs. Median sales prices for REO homes—at $450k to $500k—are about 60% of the median sales price for the entire city, and though scattered throughout SF, REOs are predominately found in the South/SE neighborhoods stretching from Oceanview to Bayview, and to a lesser degree in SOMA and Bernal Heights.
So far, there has been very little REO activity in areas such as St. Francis Wood, Noe Valley, the Richmond, Pacific Heights and Russian/Nob Hills—though one REO condo sold for over $2m in the Marina, and an REO house is now listed for over $13m in Pacific Heights.
Over 50% of REO listings accept offers within 21 days of going on market, and those sell, on average, at 4% to 5% over list price—buyers snapping up perceived bargains.
These foreclosure stats do not include homes sold at auction.
Upper-End Home Market Wilts
Sales of San Francisco homes under $1,000,000 continue at similar rates as last year, however home sales between $1m and $2m have fallen by over 50% and in the ultra high-end over $2m, sales have declined by almost 70%. Thus days-on-market (the time it takes for the average listing to sell) and months-supply-of-inventory (the time it would take for all existing listings to sell at current rates of activity) for the more expensive homes have soared as well. This huge change in buying trends in San Francisco—a complete flip from a year earlier—began in mid-September with the global market meltdown and all it entailed—including a significant deterioration in high-end home financing conditions. Buyers who can pay all or mostly cash are now kings.
New Condo Developments Reduce Prices
Many of the larger new condo developments in the city—generally located in South Beach, SOMA & Mission Bay—have recently announced across-the-board price reductions of 15% to 25%. This is a classic example of supply and demand dynamics—inventory increasing as demand declines—exacerbated by the increased difficulty buyers are facing in securing financing. Some of these new projects are facing deadlines with their lenders pertaining to achievement of a contractually specified minimum percentage of total units sold by a certain date—providing significant motivation to offer aggressive pricing and terms.
Regarding Statistics
“There are three kinds of lies: lies, damned lies and statistics”
Attributed to Mark Twain
One hears California home prices have dropped 40% or reads SF Metro Area prices have declined 30%. One recent article insisted some SF districts had experienced double-digit appreciation in 2008. (Sorry, no.) And so on. The media loves dramatic—i.e. usually bad—news; some agents deliver only the rosiest view. These analyses might quote median prices, average prices, dollar per square foot, or values based upon secret algorithms—each of which may generate different conclusions. They can encompass sales of houses, condos, TICs, multi-unit buildings, resale homes, new construction, or any mixture thereof—which can be dissimilar markets. If the calculation is based on too short a time period, the number of sales is too small to be statistically reliable; if the period is too long, it may mix data from both before and after major market shifts, muddying the current reality.
With statistics, the devil’s always in the details.
Averages are easily skewed by one or two sales higher or lower than usual. The median price, most often quoted, is that price at which half the homes sell for more and half sell for less, and can be dramatically affected by changes in buying trends as well as changes in values. If the market makes a shift to lower-end homes, such as has happened recently because of financing difficulties for more expensive homes and increasing foreclosure sales in less affluent areas, the drop in median price is larger than the decline in values. The median sales price for houses in SF has been hammered by the numerous foreclosure sales in Bayview-Excelsior—that doesn’t mean that Noe Valley or Presidio Heights values have fallen 30% to 40% in the past year.
Location, location: the Bay Area is full of financial microclimates—for example, depending on location, foreclosure sales range from less than 1% to more than 60% of total sales. The statistics for California don’t apply to the Bay Area; Bay Area stats don’t apply to SF; city stats don’t apply to specific SF neighborhoods. There are city neighborhoods—generally in the SE quadrant—where values have dropped 20% to 30% from their peak. Most have probably seen declines in the 10% to 15% range. In some neighborhoods, there have been too few sales since September 15th to make a meaningful calculation.
Statistics are generalities and the market is changing rapidly. Of course, ultimately, market value is defined as that price a qualified buyer is willing to pay when the property has been well exposed. Our goal at Paragon is to provide the most straightforward, reliable and meaningful statistics available. Here are our latest analyses of the SF real estate market:
Average Dollar per Square Foot in Selected Bay Area Zip Codes
Antioch $127
Vallejo $144
Hayward $253
SF Bayview $342
Danville $375
Pleasanton $386
Daly City $397
HMB $402
Pacifica $464
San Mateo $478
The Sunset $564
Burlingame $602
Belmont $631
Potrero Hill $658
Mt. View $670
Los Altos $779
Haight Area $874
Palo Alto $976
Noe Valley $922
SF Marina $1127
Atherton $1179
Per DataQuick for 2008 home sales: approximations for the purposes of comparison only. Cities may have multiple zip codes with differing values and zip codes may overlap dissimilar neighborhoods. Values have generally declined since 9/15/08.
Sales Price to List Price
In a seller’s market, the percentage of Sales Price to original List Price (SP/LP) is typically and unsurprisingly high. In a buyer’s market it naturally declines. Thus, in May 2007, probably the peak of the market in SF, the average SP/LP for SF houses was an incredible 104%—4% over asking price (think multiple offers)—but by early 2009, the average SP/LP had fallen to 93% (7% below asking). The parameters of negotiation have changed.
According to Broker Metrics, for YTD sales of houses and condos, Paragon is now the #1 SF brokerage for negotiating their buyers the largest discount off original list price. YTD 2009, our average Sales Price to original List Price ratio when representing buyers is 6.5% below the average for city brokerages as a whole. We’re 5% below the #2 brokerage. That adds up to a lot of money. Whether representing buyers or sellers, I work aggressively to negotiate the best possible price and terms—because that is one of the most important things clients pay us to do.
San Francisco has the lowest foreclosure rate of any county in the Bay Area, but that rate is accelerating. Of the 4600+ SF home sales reported in MLS in the last 12 months, sales of REO (bank-owned) properties equaled only 3%, but by last November that had increased to 10%, and as of 2/17/09, they constituted over 15% of all houses and condos currently pending sale. 69% of city REO activity is in houses; 22% in condos; 8% in 2-4 unit buildings; and 1% in TICs. Median sales prices for REO homes—at $450k to $500k—are about 60% of the median sales price for the entire city, and though scattered throughout SF, REOs are predominately found in the South/SE neighborhoods stretching from Oceanview to Bayview, and to a lesser degree in SOMA and Bernal Heights.
So far, there has been very little REO activity in areas such as St. Francis Wood, Noe Valley, the Richmond, Pacific Heights and Russian/Nob Hills—though one REO condo sold for over $2m in the Marina, and an REO house is now listed for over $13m in Pacific Heights.
Over 50% of REO listings accept offers within 21 days of going on market, and those sell, on average, at 4% to 5% over list price—buyers snapping up perceived bargains.
These foreclosure stats do not include homes sold at auction.
Upper-End Home Market Wilts
Sales of San Francisco homes under $1,000,000 continue at similar rates as last year, however home sales between $1m and $2m have fallen by over 50% and in the ultra high-end over $2m, sales have declined by almost 70%. Thus days-on-market (the time it takes for the average listing to sell) and months-supply-of-inventory (the time it would take for all existing listings to sell at current rates of activity) for the more expensive homes have soared as well. This huge change in buying trends in San Francisco—a complete flip from a year earlier—began in mid-September with the global market meltdown and all it entailed—including a significant deterioration in high-end home financing conditions. Buyers who can pay all or mostly cash are now kings.
New Condo Developments Reduce Prices
Many of the larger new condo developments in the city—generally located in South Beach, SOMA & Mission Bay—have recently announced across-the-board price reductions of 15% to 25%. This is a classic example of supply and demand dynamics—inventory increasing as demand declines—exacerbated by the increased difficulty buyers are facing in securing financing. Some of these new projects are facing deadlines with their lenders pertaining to achievement of a contractually specified minimum percentage of total units sold by a certain date—providing significant motivation to offer aggressive pricing and terms.
Regarding Statistics
“There are three kinds of lies: lies, damned lies and statistics”
Attributed to Mark Twain
One hears California home prices have dropped 40% or reads SF Metro Area prices have declined 30%. One recent article insisted some SF districts had experienced double-digit appreciation in 2008. (Sorry, no.) And so on. The media loves dramatic—i.e. usually bad—news; some agents deliver only the rosiest view. These analyses might quote median prices, average prices, dollar per square foot, or values based upon secret algorithms—each of which may generate different conclusions. They can encompass sales of houses, condos, TICs, multi-unit buildings, resale homes, new construction, or any mixture thereof—which can be dissimilar markets. If the calculation is based on too short a time period, the number of sales is too small to be statistically reliable; if the period is too long, it may mix data from both before and after major market shifts, muddying the current reality.
With statistics, the devil’s always in the details.
Averages are easily skewed by one or two sales higher or lower than usual. The median price, most often quoted, is that price at which half the homes sell for more and half sell for less, and can be dramatically affected by changes in buying trends as well as changes in values. If the market makes a shift to lower-end homes, such as has happened recently because of financing difficulties for more expensive homes and increasing foreclosure sales in less affluent areas, the drop in median price is larger than the decline in values. The median sales price for houses in SF has been hammered by the numerous foreclosure sales in Bayview-Excelsior—that doesn’t mean that Noe Valley or Presidio Heights values have fallen 30% to 40% in the past year.
Location, location: the Bay Area is full of financial microclimates—for example, depending on location, foreclosure sales range from less than 1% to more than 60% of total sales. The statistics for California don’t apply to the Bay Area; Bay Area stats don’t apply to SF; city stats don’t apply to specific SF neighborhoods. There are city neighborhoods—generally in the SE quadrant—where values have dropped 20% to 30% from their peak. Most have probably seen declines in the 10% to 15% range. In some neighborhoods, there have been too few sales since September 15th to make a meaningful calculation.
Statistics are generalities and the market is changing rapidly. Of course, ultimately, market value is defined as that price a qualified buyer is willing to pay when the property has been well exposed. Our goal at Paragon is to provide the most straightforward, reliable and meaningful statistics available. Here are our latest analyses of the SF real estate market:
Average Dollar per Square Foot in Selected Bay Area Zip Codes
Antioch $127
Vallejo $144
Hayward $253
SF Bayview $342
Danville $375
Pleasanton $386
Daly City $397
HMB $402
Pacifica $464
San Mateo $478
The Sunset $564
Burlingame $602
Belmont $631
Potrero Hill $658
Mt. View $670
Los Altos $779
Haight Area $874
Palo Alto $976
Noe Valley $922
SF Marina $1127
Atherton $1179
Per DataQuick for 2008 home sales: approximations for the purposes of comparison only. Cities may have multiple zip codes with differing values and zip codes may overlap dissimilar neighborhoods. Values have generally declined since 9/15/08.
Sales Price to List Price
In a seller’s market, the percentage of Sales Price to original List Price (SP/LP) is typically and unsurprisingly high. In a buyer’s market it naturally declines. Thus, in May 2007, probably the peak of the market in SF, the average SP/LP for SF houses was an incredible 104%—4% over asking price (think multiple offers)—but by early 2009, the average SP/LP had fallen to 93% (7% below asking). The parameters of negotiation have changed.
According to Broker Metrics, for YTD sales of houses and condos, Paragon is now the #1 SF brokerage for negotiating their buyers the largest discount off original list price. YTD 2009, our average Sales Price to original List Price ratio when representing buyers is 6.5% below the average for city brokerages as a whole. We’re 5% below the #2 brokerage. That adds up to a lot of money. Whether representing buyers or sellers, I work aggressively to negotiate the best possible price and terms—because that is one of the most important things clients pay us to do.
Sunday, March 1, 2009
Are you on the roller coaster? I'd like to hear your comments...
I get asked many times...."Do you think prices will drop further?", "What do you think are going to happen to rates?" If I (or anyone else) could definitively answer those questions, then I would be rich and sitting on my own private Island.
The real estate market has ALWAYS had ups and downs. The last time we had a significant drop in housing prices was in 1990-1991. Prices fell until 1994 and then the market began to rebound and prices continued to increase for the next 13 years.
Currently 30 yr mortgage rates are averaging 5%. For those of us that have either been in real estate or bought/sold over the last 20 years a single digit rate is phenominal. When I bought my first home in S.F. in 1986 the interest rate was 12.5% and that was a great "deal" since rates in the early 1980's were at 18%.
Timing is everything! Whether you are an investor or individual buyer, this is a fabulous time to purchase a property if you plan on holding on to the property and riding out the market. Property values will rise again and when they do, so will your equity.
I bought my current home in 1996. I watched the value rise over $600,000 during the peak in 2007. Since I had no intention of selling my home that equity was only "pie in the sky". As of today the value of my home has dropped by half since the peak. Am I freaked out that my homes value has dropped? No. I bought during a buyers market therefore I still have equity left in my home. I did not loose $300,000 because I never had $600,000 in my pocket. The only time the value of your home matters is the day you sell and the day you buy. If I was upside down in my home and am not planning to sell, then all I can do is continue to ride out the market and hope that when I do plan to sell the market is a sellers market.
In the meantime I am enjoying home ownership, getting the needed tax write-offs, and not giving my hard earned money away to a landlord so that they can get the benefits of home ownership.
What we can be sure of is that the market will ALWAYS flucuate and we can be sure that home prices and mortgage rates will continue to go up and down. Only you can decide if this is the time for you to take advantage of a buyers market. My recommendation is that you make the decision based on your personal situation and not based on the emotional roller coaster that surrounds you. How do you decide if the time is right for you to take advantage of this buyers market? Ask yourself the following:
Do I want to own a home?
Can I get approved for a loan?
Do I have money for a down payment?
Can I afford the monthly payments?
Do I have a back-up plan if I were to loose my job? (I know, a touchy subject for some people)
Is now the right time to sell? Only if you have to based on your personal situation.
Here is an excerpt from an article by Dean Rizzi at Guarrantee Mortgage. Is your choice to ride the roller coaster or to step off and make decisions based on your own personal situation? I would LOVE to hear what you think?
"We're all familiar with the bromide “talk is cheap.” Maybe it's not so cheap, if we are talking ourselves into a state of despair. People everywhere are likening the current economic environment to the Great Depression, which followed the October 1929 stock market crash and lasted until the United States entered World War II.
Revisiting the Great Depression might seem a logical consequence of our economic situation, but the constant comparison is contributing to current pessimism because too many of us are latching onto the Great Depression as a model of expectations. This latching on, in turn, is reducing consumers’ willingness to spend and businesses’ willingness to expand.
There's no reason to go down that road. Yes, unemployment is approaching 8%. Yes, housing prices have fallen off a cliff in some parts of the country (but in fewer parts then most would expect). Yes, the economy has contracted (operative term being “has contracted”). But there are many bright spots as well: We have little inflation, a very resilient economy, rising wage rates (it's true), 30-year fixed-rate mortgages at 5%, and unbelievable values in the housing market.
Yes, we can talk ourselves miserable, but why should we do that? This country offers too many positives and too much potential. Besides, isn't life just a little too short to be unnecessarily miserable?"
The real estate market has ALWAYS had ups and downs. The last time we had a significant drop in housing prices was in 1990-1991. Prices fell until 1994 and then the market began to rebound and prices continued to increase for the next 13 years.
Currently 30 yr mortgage rates are averaging 5%. For those of us that have either been in real estate or bought/sold over the last 20 years a single digit rate is phenominal. When I bought my first home in S.F. in 1986 the interest rate was 12.5% and that was a great "deal" since rates in the early 1980's were at 18%.
Timing is everything! Whether you are an investor or individual buyer, this is a fabulous time to purchase a property if you plan on holding on to the property and riding out the market. Property values will rise again and when they do, so will your equity.
I bought my current home in 1996. I watched the value rise over $600,000 during the peak in 2007. Since I had no intention of selling my home that equity was only "pie in the sky". As of today the value of my home has dropped by half since the peak. Am I freaked out that my homes value has dropped? No. I bought during a buyers market therefore I still have equity left in my home. I did not loose $300,000 because I never had $600,000 in my pocket. The only time the value of your home matters is the day you sell and the day you buy. If I was upside down in my home and am not planning to sell, then all I can do is continue to ride out the market and hope that when I do plan to sell the market is a sellers market.
In the meantime I am enjoying home ownership, getting the needed tax write-offs, and not giving my hard earned money away to a landlord so that they can get the benefits of home ownership.
What we can be sure of is that the market will ALWAYS flucuate and we can be sure that home prices and mortgage rates will continue to go up and down. Only you can decide if this is the time for you to take advantage of a buyers market. My recommendation is that you make the decision based on your personal situation and not based on the emotional roller coaster that surrounds you. How do you decide if the time is right for you to take advantage of this buyers market? Ask yourself the following:
Do I want to own a home?
Can I get approved for a loan?
Do I have money for a down payment?
Can I afford the monthly payments?
Do I have a back-up plan if I were to loose my job? (I know, a touchy subject for some people)
Is now the right time to sell? Only if you have to based on your personal situation.
Here is an excerpt from an article by Dean Rizzi at Guarrantee Mortgage. Is your choice to ride the roller coaster or to step off and make decisions based on your own personal situation? I would LOVE to hear what you think?
"We're all familiar with the bromide “talk is cheap.” Maybe it's not so cheap, if we are talking ourselves into a state of despair. People everywhere are likening the current economic environment to the Great Depression, which followed the October 1929 stock market crash and lasted until the United States entered World War II.
Revisiting the Great Depression might seem a logical consequence of our economic situation, but the constant comparison is contributing to current pessimism because too many of us are latching onto the Great Depression as a model of expectations. This latching on, in turn, is reducing consumers’ willingness to spend and businesses’ willingness to expand.
There's no reason to go down that road. Yes, unemployment is approaching 8%. Yes, housing prices have fallen off a cliff in some parts of the country (but in fewer parts then most would expect). Yes, the economy has contracted (operative term being “has contracted”). But there are many bright spots as well: We have little inflation, a very resilient economy, rising wage rates (it's true), 30-year fixed-rate mortgages at 5%, and unbelievable values in the housing market.
Yes, we can talk ourselves miserable, but why should we do that? This country offers too many positives and too much potential. Besides, isn't life just a little too short to be unnecessarily miserable?"
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