Friday, August 21, 2015

Credit Ratings and Closing Costs

This week we'll take a look at two items that affect every buyer--credit scores and closing costs.  The former is becoming a difficult item for Millenials, while the latter is in the midst of a downward trend.  Well, one out of two is not bad.

Millennials make up the largest percentage of the U.S. population and recently surpassed Generation X as the biggest portion of the labor force, but the younger generation’s credit score could be a factor that’s delaying or preventing more of them from entering the housing market.credit_sign
In fact, Generation Y has the lowest credit score of all generations says a report from credit bureau Experian. The study says that millennials – defined here as 19- to 34-year-olds – have an average credit score of 625, below the national average of 667. The average millennial was $52,120 in debt, and that figure would be cut in half excluding mortgages.
Generation X doesn’t meet the national credit-score standard either, notching a 650. This age group was on average $125,000 in debt, and they too would owe about $26,000 were it not for mortgage payments.
Baby boomers and the greatest generation had the best average credit score, a combined 709. These generations were $87,438 in debt — right in line with the national average — and would be $19,217 in debt excluding mortgages.
When it comes to credit usage and debt, millennials and Generation X have diverged in a few key ways, Experian notes. Today, auto loans make up 14 percent of all new accounts opened by millennials. In 1998, car loans comprised just 1 percent of accounts opened by Gen Xers. Millennials are also slightly more reliant on student loans than the preceding generation, with 24 percent opening such accounts compared with 20 percent of Gen Xers when they were the same age.
Gen Xers, on the other hand, favor bank and credit cards. Nearly half – 46 percent – of new accounts opened by this age bracket were for bank cards compared with 27 percent for millennials. Gen Xers are also far more likely to use these cards frequently, carrying an average balance of $6,752, twice as much as millennials.
Millennials may just actually be taking a little longer to develop credit than previous generations, due in part to the tough economic conditions in which they came of age. Experian Vice President of Analytics and Business Development Michele Raneri said that while the numbers might indicate that millennials are financially irresponsible, they will have ample opportunities to build solid credit.
“The best way to do that is to understand credit before using it,” she said.
FICO offers a number of credit-education resources at its myFICO website, including tips for understanding and improving credit scores.

Closing Costs:
Good news for homebuyers: Closing costs have dropped 7.1 percent over the past year, falling from an average of $1,989 in 2014 to $1,847, according to a nationwide survey by Costs are slightly lower in California, averaging $1,834.cash_blurry requested good-faith estimates from up to 10 lenders in the nation’s largest cities for a hypothetical $200,000 mortgage for a single-family home, assuming a 20 percent down payment. Some highly variable costs were excluded, such as homeowner’s insurance, discount points, title insurance, and taxes, so the final charges on closing day likely would be considerably higher than the averages found in the survey results.
In the survey, average third-party fees rose nearly 22 percent, while origination fees fell by the same percentage. The jump in third-party fees may have been caused by inflation, noted, while origination fees may have followed the decline in mortgage rates.
In California, the average $1,834 in closing costs included origination fees charged by the lender such as document preparation, broker/lender fees, and tax services, together averaging $937. Third-party fees, averaging $896, included an appraisal, attorney fees, a credit report, flood certification, inspections, postage, and surveys.
Nationwide, closing costs ranged from $1,613 in Ohio to $2,163 in Hawaii. The overall decline in costs followed two years of increases.’s survey results included a statement from nonprofit organization NeighborWorks America reminding borrowers that they can shop around for competitive closing costs.
“Compare the service you get, the reputation and the costs, along with the rate,” Marietta Rodriguez, vice president of national homeownership programs at NeighborWorks America said, “and then go with what you think will fit your needs the best after doing just a little bit of research.”
Borrowers will see changes in the mortgage and closing process in the months ahead as lenders adopt new regulations established by the Consumer Financial Protection Bureau (CFPB) under the 2010 Dodd-Frank Act. The regulations are intended to make the process more transparent, and one of the changes will combine four forms that borrowers get during the application and closing processes into two simpler documents.
The new forms had been scheduled to take effect Aug. 1, but the CFPB has delayed them until Oct. 3.

Friday, July 17, 2015

The Drought vs. Your Lawn

Fretting more and more about what the drought is doing to your precious manicured lawn, not to mention how it now looks? Well, pay attention! There may be a solution to our agony that doesn't gain the scorn of the neighbors who hate those watering their lawn.

Homeowners in drought-stricken California are nearly three times as likely to remove their lawn during an outdoor home-improvement job, say results from a survey that examines landscaping and gardening trends.patio
In its 2015 Landscaping & Garden Trends Study, home design and renovation content provider Houzz found that 46 percent of Golden State homeowners who are making or plan to make outdoor upgrades will remove the lawn entirely, compared with 16 percent of all poll respondents. Of those who plan to keep their lawn, 39 percent of Californians said they are reducing its size, compared with 36 percent nationwide.
An overwhelming majority of California homeowners – 77 percent – said they were removing or scaling back their lawns to help the environment during the state’s prolonged drought. Another 58 percent seek to reduce yard work, while 56 percent are after a new design motif. Forty-eight percent of Californians said they hope to save money on their water bills, double the U.S. rate.
Hardscape was the most popular natural-grass replacement, with 71 percent of the state’s homeowners opting for this material. Mulch was the next favorite option, planned by 55 percent of owners, followed by ground cover (52 percent), flowerbeds (46 percent), and outdoor structures (35 percent). A synthetic lawn was the least-popular reported replacement for natural grass, at 19 percent, although Golden State homeowners are more than twice as likely to take this approach than those in other parts of the country.
Other environmentally conscious consumers are taking additional home-improvement steps to help ease water usage. Surprisingly, Houzz says, nearly 1 in 5 U.S. homeowners – 17 percent – is installing a rainwater-harvesting system. The study says that nearly all respondents are making some sort of update to their greenery during outdoor renovation projects, and 42 percent are planning to buy drought-resistant plants, shrubs, and trees.
Californians have good reason for concern about the lengthy precipitation shortage; Houzz estimates that 70 percent of the state’s residents are affected by the drought. Their counterparts in Texas have the opposite problem, with 47 percent of homeowners making improvements to impede flooding.

So, there you have it--a lawn and water conservation all together! Need any other helpful info on your home and the current market? Give us a call! We'd be pleased to help: Peter: (415) 279-6466;Jane: (415) 531-4091.

Tuesday, July 14, 2015

Location, Location, Location!!

Well, no doubt at some point in time, you've heard the old expression "Location, location, location" as it relates to the relative value of real estate.  The following information, just out, appears to further validate this old canard at least as it relates to Bay Area locales.
Bay Area buyers aren’t shy about paying extra for homes located in top school districts and close to desirable urban amenities, says a new study of data from the Journal of Urban Economics.13855784355_447b9c3280_n
CityLab reports that behind residents of the Hawaii community of East Oahu, homebuyers in the Bay Area are more likely than those in nearly any other part of the country to pay extra money to purchase a property in a top-rated neighborhood. Although the article doesn’t provide exact numbers, it says that homebuyers in San Francisco, Marin, and San Mateo counties are willing to pay nearly 25 percent more than the average American to live in the best neighborhoods. The article notes that buyers in San Jose, Oakland, and Santa Cruz are also willing to spend significant premiums to purchase a property in a top community.
CityLab includes a map of the Bay Area that shows that, unlike in New York, homebuyers in virtually all parts of San Francisco will spend more money for a great neighborhood.
“People are very willing to pay for most neighborhoods in the city itself, as well as the surrounding suburbs,” wrote Richard Florida. “Only a few sections of Oakland and Richmond, to the north of Berkeley, rank lower on the quality of life index, but these still do well relative to the rest of the country.”

Friday, May 15, 2015

Bay Area Prices Still Climbing!

In the latest Case-Shiller report, Bay Area prices jumped by the largest margin from January to February, 2015 of any of the 20 regions covered in the report nationally. This bodes well for sellers, and also sends a message to buyers--the time is NOW!
Home prices in the San Francisco metro area recently jumped month over month, according to the latest numbers from a prominent real estate index. And on an annual basis, the region saw the second-largest price gains in the country.perk_up
According to the most recent S&P Case-Shiller Home Price Indices, single-family home prices in the San Francisco metro area grew by 2.0 percent on a nonseasonally adjusted basis from January to February, the largest monthly increase of the 20 U.S. regions included in the report. Month-over-month price growth was four times higher than the index’s 20-city composite of 0.5 percent and 20 times the national average of 0.1 percent.
On an annual basis, San Francisco home prices were up by 9.8 percent in February, second only to Denver. San Francisco topped the S&P Case-Shiller index for annual home price appreciation in November and December before dropping to No. 4 in January. Across the 20-city-composte, home prices grew by 5.0 percent year over year while increasing 4.2 percent nationwide.
U.S. home prices have grown on an annual basis for 34 consecutive months, and all 20 cities have seen year-over-year gains since the end of 2012. In a statement accompanying the report, David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, said that home prices are outstripping both inflation and wage growth and that construction of single-family homes remains slow.
Despite the price gains, only two U.S. metro areas – Dallas and Denver – have eclipsed their housing boom price peaks as measured by the index. “If a complete recovery means new highs all around,” Blitzer said “we’re not there yet.
“A better sense of where home prices are can be seen by starting in January 2000, before the housing boom accelerated, and looking at real or inflation-adjusted numbers. Based on the S&P/Case Shiller National Home Price Index, prices rose 66.8% before adjusting for inflation from January 2000 to February 2015; adjusted for inflation, this is 27.9 percent or a 1.7 percent annual rate.”
So, if you've been debating whether or not to sell, as the report indicates, this may be the perfect time! Similarly, while prices continue on their upward path, buyers may want to get in on the market to buy before prices get much higher.
Whatever the question, give us a call and you'll get the answers! Peter: (415) 279-6466; Jane: (415) 531-4091.

Friday, May 08, 2015

Fake Grass Keeps Curb Appeal, Saves Water

So you've finally got a lawn to envy, but you feel guilty about the water necessary to maintain it.  Well, read on because there's a way that more and more homeowners are 'having their cake and eating it' too--artificial turf.
As Californians come to grips with the severity of the current drought, it may be time to explore options that even a year ago would have been unthinkable. Maybe even … artificial grass?
Artificial grassWith Gov. Jerry Brown’s call for mandatory water restrictions, utilities across the state are imposing limits on the amount of water available for nonessential purposes such as lawn care, which accounts for more than one-third of urban water use.
Southern California communities face the most rigorous restrictions, but several in the Bay Area could be forced to cut water consumption by 28 to 36 percent, including Sonoma, Benicia, Antioch, and Hillsborough, to name just a few.
With the possibility of even more heavy-handed measures in the future, artificial grass has already started to appear outside homes across the Bay Area, and The New York Times reported last week that business is booming for synthetic turf suppliers and installers.
The Times quoted a Folsom resident, Michelle Kwek, whose family spent $4,000 to lay down 600 square feet of artificial grass in their backyard. “I’m not embarrassed to say I have a fake lawn, although a few years ago I might not have wanted to say it,” Kwek told the publication. “Everyone wants to do their part and be more water conscious.”
Artificial grass doesn’t come cheap; it can cost $8 to $15 per square foot. But subtract the cost of water and maintenance and the price becomes more competitive. And industry representatives say artificial grass has made huge advances from the prickly AstroTurf of previous generations.
Homeowners should check with local authorities and homeowner associations, however, before replacing their natural lawn. Some communities may prohibit artificial grass for aesthetic reasons or because it can be harmful to the environment — the material is not easily recycled, may not absorb rainwater, and does nothing to improve the soil underneath.
Still, artificial grass, even in limited uses, can offer new landscaping options to homeowners trying to conserve water. A number of companies are active in the Bay Area; an Internet search for “artificial grass Bay Area” will reveal more than a dozen such firms.

Interested in more helpful hints at making your home create a better first impression? Give us a call: Peter: (415) 279-6466; Jane: (415) 531-4091. We'd be happy to help--on this or any other question you may have!

Friday, May 01, 2015

PacUnion Grows; Economic Facts Show Improvement

Pacific Union is continuing to show off its explosive growth of recent months, this time opening its new headquarters location at 199 Van Ness Avenue. 
Pacific Union is pleased to announce that we’ve officially opened our new headquarters in San Francisco. The move consolidates our firm’s three offices in the city under one roof and allows our real estate professionals to better collaborate so that we can continue to offer our clients an extraordinary level of service.1699vanness
Located at 1699 Van Ness Ave. at the corner of Sacramento Street, Pacific Union’s highly visible new headquarters is housed in a historic building that was the original home of the Studebaker automobile showroom. The former Auto Row space has been extensively renovated by local architectural firm Studio TMT, which chose a ultramodern design motif for the interior office space.
“This move underscores Pacific Union’s leadership position in the San Francisco Bay Area and the city,” Pacific Union President Patrick Barber says. “We’ll be able to deliver an even more extraordinary level of client service, and our team will have more opportunities to support each other and collaborate.”
The 40,000-square-foot space has more than 100 private and open offices, a large living room with a two-story atrium, multiple conference rooms, two kitchens, and four copy centers. Our headquarters offers visiting clients complimentary valet parking and employs a full-time concierge.
Pacific Union formerly operated San Francisco offices in the Presidio, Opera Plaza, and South Beach. Our company currently operates 28 offices across nine Bay Area regions and the Lake Tahoe/Truckee area. So, no matter where your real property interests may lie, geographically, we're poised to help you realize your goals and live your dreams.  Give us a call--we'll give you a hand! Peter: (415) 279-6466; Jane: (415) 531-4091.
Separately, one indicator of property values is the employment market and the local industrial growth in a particular geographical area.  In the case of wages ad jobs, not to mention Initial Public Offerings, the local Bay Area economy shows continued overall growth.
The Bay Area’s high-flying economy showed little sign of cooling as the first quarter of 2015 wound down, with both jobs and wages projected to grow across the region. Local initial public offering (IPO) activity, on the other hand, has gotten off to a relatively slow start after a busy 2014.ticker_symbol
According to data from John Burns Real Estate Consulting (JBREC), there were 35 Bay Area-based IPOs in 2014, which generated about $5 billion in raised proceeds. Last year’s notable offerings included San Francisco-based Lending Club, which as of February had raised $870 million since its December debut on the New York Stock Exchange. San Mateo’s GoPro, makers of the mountable video camera, also had a healthy IPO: $427 million in proceeds.
In the first quarter of 2015, there were five Bay Area-based IPOs, with Los Altos-based file-sharing service provider Box, the tech sector’s sole representative, raising $175 million. The other companies that went public last quarter are biotech or medical firms: San Francisco’s INVITAE ($102 million raised), Redwood City’s Avinger ($65 million raised), Fremont’s Zosana Pharma Corporation ($50 million raised), and San Ramon’s SteadyMed Therapeutics ($40 million raised).
Brenon Daly, 451 Research‘s research director based in San Francisco, finds the somewhat sluggish pace – at least in the tech sector– a bit of a surprise given last year’s activity. “I would characterize it as unexpectedly and disappointingly slow,” he says.
Funding Availability Increases Incentive to Stay Private
So what’s behind the drop-off in activity at a time when many well-known local tech companies — including Uber Technologies, Airbnb, Dropbox, and Pinterest – appear to be likely IPO candidates? Daly cites two likely culprits.
As in real estate, IPO activity follows seasonal patterns, with the early months of the year typically a quiet period. A business not only wants a solid year of earnings behind it before going public but also an exceptional first quarter.
More importantly, perhaps, is the large amounts of money venture capital firms are currently willing to funnel into local companies. According to JBREC, Bay Area-based companies took in a total of $23.4 billion in funding last year – the most since 2000. Investor interest in tech darlings does not appear to be waning; in February, San Francisco-based Uber raised an addition $1 billion in funding, bringing the company’s total to about $5 billion since its foundation in 2009, according to The New York Times.
Given that an IPO can be a long, complicated affair due to laws such as the Sarbanes-Oxley Act, Daly thinks that many companies are staying private for as long as possible since late-stage, private capital is readily available.
“There’s no real reason to go through the hassles of an IPO when there is someone ready and willing to cut you a huge check that day,” he says.
Bay Area Jobs, Incomes Poised for Growth in 2015
Even if 2015 doesn’t turn out to be a banner year for Bay Area IPOs, steady wage and job growth should keep demand for real estate running strong. According to JBREC, about two-thirds of the 127 public companies based in the Bay Area were up on a year-over-year basis in March, a sign that local companies should continue to hire.
“Job growth is the No. 1 driver of home demand,” says Pete Reeb, one of JBREC’s principals.
JBREC projects that the Wine Country will lead local job growth in 2015, with employment growing by 4.4 percent in Napa County and 3.2 percent in Sonoma County. Employment is projected rise by 2.5 percent in Santa Clara County; 2.4 percent in Alameda and Contra Costa counties combined; and 2.3 percent in Marin, San Francisco, and San Mateo counties combined.
Employment levels are either at or above peak levels across most of the Bay Area, JBREC says, most notably in Napa County, where both payroll and labor force totals were 104 percent of their 2008 highs. Bucking this trend was Santa Clara County, where the employment rate was 96 to 97 percent of its dot-com era peak.
Bay Area wages should see even bigger spikes in 2015, which will help local homebuyers unlock more purchasing power. JBREC projects that median incomes will grow from 3.8 to 4.5 percent across the region in 2015 – compared with 0.3 to 1.9 percent last year.
So, everyone, Buyer or Seller, has encouraging news as the year continues to move into Spring and from there onto Summer.  Remember--increased salaries and job growth bode well for sellers in that there will be more potential buyers with good incomes able to buy property as the year rolls on.  It also means that buyers will be better positioned to jump into the Bay Area real estate market and buy due to their increased incomes.
In either case, as noted above, give us a call to help you in your purchase or sale.  If you're still undecided and want to chat about details, we'd be pleased to provide you with the latest information or leads so that you can make the best informed decision as to buying or selling that wonderful home you are looking for or preparing to put on the market as your needs change.

Friday, April 24, 2015

Drought Tolerant Landscaping Important

Well, here we are in the 4th consecutive year of an increasingly severe drought. Of course, this brings up the question of how does one responsibly conserve water and still maintain attractive landscaping. The answer is drought tolerant landscaping.
In real estate, properties featuring drought-tolerant landscaping will likely fetch a premium from homebuyers, particularly in the environmentally conscious Bay Area. Sellers, if they haven’t done so already, may want to take steps now to incorporate water-saving features in their landscaping.
Several weeks ago, Pacific Union discussed indoor improvements to conserve water, such as low-flow toilets, water-efficient appliances, and dripless faucets. Today’s discussion moves outdoors. Whether you are a homebuyer, a seller, or simply a Bay Area resident trying to cut back on water usage, check out the links below for smart ideas that can save you money and help the environment.
The California Institute for Water Resources has more than a dozen web pages offering advice on many aspects of landscaping and gardening. A few of the topics include “Keeping Landscape Plantings Alive under Drought or Water Restrictions,” “Growing food with less water,” and “Water-wise gardening tips for Marin County.”
The California Landscape Contractors Association offers smart, practical tips to help you survive this year’s drought and help you prepare for water shortages.
Sunset magazine, famous for its rich, color layouts of manicured lawns, does an equally fine job presenting “24 inspiring lawn-free yards.” One look at these outdoor scenes, and you may be tempted to tear out every blade of grass in your yard. Also check out the magazine’s Water-Wise Garden Design Guide and list of 12 great drought-tolerant plants.
Better Homes and Gardens, not to be outdone, offers detailed steps to create 11 lush outdoor environments with minimal water needs.
Southern California’s Las Virgenes Municipal Water District has posted a 60-page “California-Friendly Guide to Native and Drought-Tolerant Gardens” that’s every bit as useful in Northern California.
Digital First Media, which operates a half-dozen news websites in the Bay Area, including those of The San Jose Mercury News and the Marin Independent Journal, offers plenty of local advice for tending lawns and gardens without much moisture.
So, you can have a beautifully landscaped yard and still conserve on the use of water.

For this and other helpful hints, give us a call: Peter: (415) 279-6366; Jane: (415) 531-4091.