Thursday, August 28, 2014

Investor Competition Eases

There have been many different factors in the strong run up in housing prices in the Bay Area (and Marin County) over the past few years. These include a shortage of inventory at all price levels, strengthening economy and a new surge in tech industry companies and development. Another is the interest in buying by investors. Frequently, this last one has been the cause of some people either failing to realize their purchase goals of a home to live in or having to pay a great deal more for the purchase than they had originally planned.

Well, that has apparently begun to change.

Good news for Bay Area buyers: A recent survey found that investors today are far less active in the region’s real estate markets than in years past, helping to ease some of the fierce competition for homes.
Toy housesThe news is especially welcome for first-time buyers, who have struggled to compete against well-heeled investors paying all cash for starter homes and then turning them into rental properties or waiting a few months and flipping them at even higher price points.
The California Association of Realtors’ 2014 Investor Survey, conducted in May and released to the public on Wednesday, found that  investors are changing their strategies and moving away from buying homes in more popular, urban areas in favor of rural locations of the state where better deals can be found.
In 2014, nearly half (45 percent) of California investors said they purchased properties in rural counties such as Kern, Fresno, Merced, San Joaquin, and Tulare, up from 27 percent in 2013, according to the survey.
Meanwhile, 15 percent of investors purchased properties in Northern California in 2014, down significantly from 27 percent in 2013.
The organization gave an early look at some of the survey data two weeks ago, and Pacific Union reported at the time that rising home prices have curtailed investment activity in high-dollar Bay Area markets like Silicon Valley.
The survey also found that 67 percent of investors paid cash, and one-third were residents of foreign countries, with China, Mexico, Taiwan, and India being the top countries of origin. Investors owned an average of 8.3 properties in 2014, up from 6.5 properties last year.
Reflecting the recovering housing market, the majority of investment properties purchased in the last year (70 percent) were equity sales, while 18 percent were short sales and 12 percent were foreclosures.
Most investors said they made minor or no repairs to the properties, and 55 percent said they intend to sell them within six years.
So, if you're actively seeking that 'dream' home, or have thought about taking some time out from your search, now may be the perfect time to ratchet up the pace of your search. Questions on the market? Call us! Peter: (415) 279-6466; Jane: (415) 531-4091.
Separately, if you are thinking of selling, but not sure of your home's value, we can also help in that regard. So, either way--buy or sell, let us help you make the best decision.

Saturday, August 23, 2014

Credit Standards Easing--Loans Easier to Qualify

Well, after some very intense analysis and review by various lenders and credit scoring agencies, things have gotten a bit easier for buyers. The basic parameters in credit scoring, a major portion of credit analysis on potential borrowers has been loosened a bit.
More people will qualify for home loans, and at lower interest rates, thanks to recent policy changes by several U.S. credit agencies.Yellow road sign bearing the word "credit"
Fair Isaac Co.’s FICO credit-scoring system garnered top headlines last week with the news that medical bills and paid-off debts would no longer be counted against consumers in computing their FICO scores. But other credit agencies have also eased their reporting rules in recent months.
The net result will be higher credit scores — perhaps an additional 25 points, Fair Isaac said — enabling some homebuyers to qualify for a loan that otherwise would have been out of reach or at a higher interest rate.
“This move will ultimately make a real difference in the lives of millions of Americans, who have been shut out of the housing market or forced to pay higher mortgage interest rates because of flawed credit scores,” Steve Brown, president of the National Association of Realtors, said in a statement. “Since the housing crash, overly restrictive lending has been the greatest obstacle to home ownership.”
The change follows a recent study by the federal Consumer Financial Protection Bureau that showed that both paid and unpaid medical debts were unfairly penalizing consumers’ credit ratings. An estimated 64 million Americans have a medical-collection item on their credit reports, according to Nick Clements of MagnifyMoney, a personal-finance website.
Two of the nation’s biggest credit bureaus also recently changed their credit-reporting policies.
Both Experian and TransUnion have added verified rental-payment data into credit files, to be used to compute a consumer’s credit score when applying for a mortgage and other type of loan. Experian said the change especially favors consumers with little or no credit history, and a TransUnion study showed that including rental data raised credit scores by 10 points or more for 20 percent of renters.
Together, the changes at Fair Isaac, Experian, and TransUnion could make a noticeable difference in Northern California real estate markets.
Bay Area residents have some of the highest credit scores in the nation, but buyers face added loan pressures here because home prices are far above national averages.
TransUnion recently revealed that the San Jose-Sunnyvale-Santa Clara metro area is tied with the Minneapolis-St. Paul area for the highest percentage of “A” credit scores in the United States, with 23.5 percent of its residents scoring between 900 and 990 on the VantageScore rating system.
The San Francisco-Oakland-Fremont metro area had the second-highest percentage of “A” scores — 22.9 percent.
But looking at the VantageScore numbers by another metric shows the challenges still facing homebuyers here: Residents of the San Jose metro area collectively have an average score of 700 on the 501-to-990 scale — a low “C” grade in terms of credit worthiness. San Francisco metro area residents have an average score of 696 — a high “D.”
Those numbers show how even in a high-scoring region like the Bay Area, plenty of consumers — and potential homebuyers — will benefit from increased credit scores.
What does this mean for you? Well, if you're a potential seller, it means that a larger pool of potential buyers just arrived, as easier approval standards means more people qualifying for loans, and thus able to purchase your home.
If you're a buyer, it just made things easier for you to qualify for a loan to buy that dream home.
Questions about the process or the market, or the value of your home? We can handle them all. Give us a call! Peter: (415) 279-6466; Jane: (415) 531-4091. We'd be happy to help you out!

Friday, August 08, 2014

Continued Population Growth Fuels Market

One thing that's as true as death and taxes is that for someone to want to buy your home, there has to be someone in the market. That someone must have a good job and prospects for continuation of that job. If there are enough positions of that nature in an area, the market grows. So it is with the Bay Area.
The Bay Area’s tech-industry-driven economy continues to add extremely desirable and high-paying jobs, attracting talented workers from around the nation and globe. But even though our region’s phenomenal economic growth likely will begin to slow over the next couple of years, intense demand for housing is almost certainly here to stay thanks to a pronounced lack of available homes.
“We’re getting closer to full employment,” says Stephen Levy, director and senior economist of Palo Alto-based Center for Continuing Study of the California Economy. “And what that means is that as we near full employment, that’s going to bring in people, which will add to the housing demand.”
May statistics from the California Employment Development Department show that each one of our Bay Area counties boasts an unemployment rate lower than the statewide average of 7.6 percent. Job growth remains particularly strong in Marin, Napa, San Francisco, and San Mateo counties, all of which have unemployment rates of less than 5 percent.
Levy believes that the Bay Area’s unemployment rate will never return to dot-com-era lows, when it hovered in the 2 to 3 percent range in San Francisco and Silicon Valley. However, he forecasts that even though job growth will level off over the next two years, the Bay Area will continue to outperform the rest of the country.
Population Growth Outpacing New Housing in Key Markets
Since the U.S. began to emerge from the Great Recession in 2010, the Bay Area’s population rate has jumped sizably, according to California Department of Finance data. Over the past four years, the number of residents in San Francisco and San Mateo counties has grown by nearly 4 percent while increasing by almost 5 percent in Santa Clara County.
But those counties have failed to build enough new housing units to keep up with the expanding populace. Since 2010, new housing has grown by just 2 percent in Santa Clara County, 1.3 percent in San Francisco, and 0.9 percent in San Mateo County.
“Peninsula prices and rents will continue to outpace the state and national average unless we see a dramatic increase in supply, and even then it would be snapped up pretty quickly,” Levy says.
Economic Climate Much More Stable Than in Dot-Com Days
As was the case in the dot-com boom and subsequent bust, the tech industry remains the primary driver of Bay Area employment growth. However, Levy believes that our current economy is far less frenetic than it was 15 years ago.
“I think it’s quite different,” he says. “These are real companies, and they have customers, profits, and burgeoning sales. The dot-com era was more about business plans.”
Still, technology companies aren’t the only businesses fueling Bay Area job growth. Other industries, including hospitality, health care, and construction, are seeing employment upticks, Levy says. However, he cautions that tremendous growth in the Internet sector could eventually slow expansion in other industries, including brick-and-mortar retail and financial services.
While the Bay Area’s economic outlook appears solid for the foreseeable future, the housing shortage may eventually impede growth, as workers could become wary of relocating to an area where finding a home is so difficult. Therefore, new construction remains a crucial factor in keeping our region’s economy moving upward and onward.
“I think [our economy] will always grow, but absolutely, housing poses a constraint to our growth over the long term,” Levy says. “The lack of housing could take some of the bloom off of the rose and limit some of the growth that might otherwise be there.”
Similar situations are becoming the rule here in Marin County.  This is because much of the spill-over from the growth of tech industry jobs in San Francisco is oriented to Marin with its easy commute and top quality schools.
Thinking of selling? Curious what your home is worth? Call us! We'll provide you with the information and assistance that you need to make an intelligent and successful decision. Peter: (415) 279-6466; Jane: (415) 531-4091.

Wednesday, July 23, 2014

PacUnion Cutting Edge Technology Scores Again!

Like any business looking to provide its clientele the best service, coupled with the most advanced technology, Pacific Union has always been at the forefront of real estate technology and service.  The latest example is the newly announced Coming Soon feature provided in conjunction with Zillow.

Zillow recently unveiled its Coming Soon feature, a forward-thinking initiative that lets real estate professionals advertise exclusive property listings up to 30 days before they are loaded into the MLS. While other companies in our industry may react to this disruptive move with fear and resistance, Pacific Union is choosing to test Zillow’s program and determine whether we can leverage it to our clients’ advantage.MarkMcLaughlin_small
According to Zillow’s own data, its website has 81 million monthly unique users, and traffic has grown by 50 percent since January. This is a huge community of consumers viewing homes for sale and an amazing opportunity for Pacific Union to test the quality of Zillow’s traffic. We do not yet know if Zillow’s user base consists of qualified buyers or simply consumers looking for remodeling ideas or viewing dream homes they likely cannot afford.
Subverting the MLS
With the Coming Soon program, Zillow has stepped in front of the MLS to fill a void in the industry and give consumers, as well as some real estate professionals and brokers, what they have been wanting. While some MLS operators share premarket listings privately with paid subscribers, none of them publicly display such listings.
If Zillow’s unique users are indeed qualified homebuyers, this move could be a wake-up call to MLS operators that to stay relevant, they must deliver what consumers and their members want rather than making decisions based on preserving their perceived control in the industry. This includes embracing technology that homebuyers and sellers describe a need for – like the Coming Soon listings.
Coming Soon listings may prove to have a particularly large impact in highly competitive real estate markets like the Bay Area. If Zillow’s traffic consists of serious homebuyers, real estate professionals will gain the ability to actively market their properties before uploading them to the MLS, which have many “rules” in place designed to maintain industry control instead of meeting market demand.
Qualified buyers, meanwhile, will have advanced time to research a home and prepare an offer, crucial ingredients to success, since many Bay Area homes go under contract as soon as they hit the market.
How We’re Approaching Zillow’s Coming Soon
Pacific Union believes that if Zillow’s traffic indeed comes from qualified buyers, giving our real estate professionals and their clients the ability to market homes before they are listed on the MLS is tremendously beneficial and represents yet another tool to help them succeed. To that end we’re implementing a technology interface in early August that will allow our professionals to seamlessly upload pre-MLS listings to Zillow’s Coming Soon offering at no cost.
Pacific Union primarily will be testing the quality of Zillow’s unique users. If the Coming Soon feature generates qualified buyers and closed escrows, we will value the service.
While technology will doubtlessly play a key role in our industry moving forward, we do not believe it can replace or remove the trust, knowledge, and advice that a Pacific Union real estate professional offers clients.
For example, Zillow’s Zestimates for eight of the nine Bay Area counties receive just two-star accuracy ratings and only come within 10 percent of the sales price about half of the time. And in San Francisco County Zillow’s margin for error comes in as high as 12 percent. Therefore, it remains clear to Pacific Union and our clients that the Zestimate is not currently a credible industry tool.
By contrast, seasoned real estate professionals can predict a home’s value with a much higher degree of certainty, as they provide a level of trusted local knowledge and expert neighborhood advice that a website simply cannot replicate.
Zillow’s Coming Soon feature is just the latest in a line of technology innovations designed to propel our industry forward. As technology continues to alter the way real estate professionals and brokerages do business, Pacific Union will evaluate each new innovation carefully and adopt the ones that we feel deliver the largest benefits to our clients.
We will know shortly if Coming Soon is a valuable industry innovation and whether Zillow’s huge user base really contains serious homebuyers.
Best of all, you, the client, will get the benefit without having to worry if your Realtor is keeping pace with the market!
Questions on the market? Want a no obligation valuation of your home? Call us! We'd be happy to assist. Peter: (415) 279-6466; Jane: (415) 531-4091.

Friday, July 11, 2014

Happy Workers = Increasing Home Values

One factor always helping home values to improve is the underlying employment base. One thing that helps that item stay strong is happy workers and an accompanying desire on the part of workers to locate in such an area.

A few months back we noted that San Jose and San Francisco ranked as the top two U.S. regions where residents were happiest with their lives. So it comes as little surprise that Bay Area employees are also the most satisfied in the country, an intangible that will surely help our region continue to attract highly skilled workers and drive fierce demand for housing.thumbs_up
Glassdoor’s annual Employment Satisfaction Report Card ranked San Jose as No. 1 in the U.S. for worker happiness, followed by San Francisco at No. 2. Both regions also topped 2013′s report in the same order.
The study, which measures employee contentedness on a scale from zero to five, gave San Jose an overall satisfaction rating of 3.5, up slightly from last year’s study. San Francisco received a rating of 3.4, unchanged from 2013.
San Jose also finished first in the compensation and benefits category and was the only U.S. region to notch a 3.5 in that department.
San Francisco employees were among the country’s most optimistic about the economy. Forty-eight percent of the city’s workforce believes that the economy will improve in the next six months, the third highest rate in the nation.
The number of companies hiring in both San Jose and San Francisco grew by 19 percent on an annual basis, when compared with figures from last year’s report. Software engineers are currently the most in-demand employees in both regions, underscoring the Bay Area economy’s reliance on the tech sector.
Indeed, Bay Area high-tech heavyweights fill five of the top 10 slots in Glassdoor’s Employees’ Choice Awards 2014, which rank companies based on employee-satisfaction rates. San Francisco-based Twitter came in at No. 2, while Mountain View’s LinkedIn placed third. Silicon Valley-based companies Facebook, Google, and Guidewire also cracked the top 10.
And while hefty salaries certainly don’t guarantee employee happiness, it’s difficult to dismiss the impact wages have on worker satisfaction, particularly in high-cost regions of the U.S. like the Bay Area.
California Employment Development Department data shows that the mean wages in our local regions are the highest of any metropolitan statistical area in the state. In the first quarter of 2013, San Jose area residents earned an annual mean wage of $70,502, the most in California. The San Francisco area had California’s second highest median wage — $66,858 – followed by Oakland at $59,886.
But salaries aren’t the only factor likely influencing job satisfaction here in the Bay Area. A March SFGate article details the kinds of perks some local tech startups offer employees, including unlimited vacation time, free house cleanings, and subsidized meals.
What doles this mean for you? If you're a homeowner, it bodes well for continued value increases. When you decide to sell, you should receive the benefit of this.
If you're a buyer, this still will benefit you as it gives you some assurance that your investment is in an area that should produce valuable returns for you with the passage of time.
Interested in the value of your home? Thinking of buying or selling? Give us a call--we'd be happy to assist you whatever your needs. Peter: (415) 279-6466; Jane; (415) 531-4091.

Thursday, July 03, 2014

Marin Unemployment Drops Again--Leasing Solar Panels?

Hello again. Today we have two subjects to inform about. One is great news for homeowners, and the other is a cautionary note should you be considering leasing solar panels for your home.
In the fist situation, unemployment rates dropped again in all but one Bay Area county, with Marin having the lowest rate in the state of any county.
In news that is sure to inspire continued confidence in our region’s thriving real estate markets, unemployment claims dropped in eight of nine Bay Area counties in May, and all counties are back to their lowest levels since 2008.yellow_blue_up
According to the California Economic Development Department’s May unemployment report, jobless claims across the state were down month over month, falling to 7.6 percent on a seasonally adjusted basis. The U.S. registered an unemployment rate of 6.3 percent in May, unchanged from the previous month.
The California economy added 18,300 nonfarm positions in May, a big slowdown from April, which saw the creation of more than three times as many jobs. The construction sector continues to lead the state in annual job growth, which could provide some welcome relief to our local inventory-starved housing markets.
From April to May, unemployment claims dropped in every Bay Area county except San Francisco, where they held steady at 4.4 percent. Marin (3.8 percent) and San Mateo (4.1 percent) were the only two other California counties with better jobless rates.
Unemployment rates in all nine counties have now returned to levels recorded before the nation’s economic crisis, according to historical data from the EDD. Napa (4.5 percent), Sonoma (5.0 percent), Alameda (5.6 percent), Contra Costa (5.8 percent), and Solano (6.6 percent) counties saw jobless numbers dip to their lowest points since May 2008. Sounds pretty good, huh?

Now, on to solar panels. Solar is a great way to save on energy and help solve the growing global warming issue.  However, whether you buy or lease the panels can be quite a different thing.  Read on. Sure, solar panels are expensive to install, but a host of federal and state taxes helps lower costs considerably, even as increased production drives down the overall price of the equipment. (Last year, we reported on this blog that prices for solar systems dropped more than 25 percent in two years’ time.)
But a recent Bloomberg report adds a note of caution: Homeowners who choose to lease their solar systems, thereby avoiding thousands of dollars in upfront costs, might have trouble selling their houses years down the road.
That’s because the fine print in many such leasing contracts requires new homebuyers to assume the previous owner’s contract. It’s an added complexity that might scare off prospective buyers.
“Homeowners don’t understand what they’re signing when they get into this,” Sandy Adomatis, a home appraiser in Florida, told Bloomberg. “You’ve got another layer to add on top of finding a buyer for the house. It’s not a plus.”
An Arizona man said that the leased solar panels on his roof took 10 percent off the value of his home when he sold it in March. His solar contract had nearly 19 years remaining on it.
On the flip side, solar systems have been found to add value to a home — about $25,000 for California owners, according to a study by the Lawrence Berkeley National Laboratory.
Leased systems, however, are considered personal property and not part of the house. As such, a solar lease could be considered a liability rather than an asset.
The solar industry counters that rooftop panels, whether owned or leased, make a home more attractive to buyers.
“They’re essentially moving into a home with a lower cost of ownership, a lower cost of energy,” Jonathan Bass, a spokesman for San Mateo-based SolarCity, told Bloomberg. “It becomes a selling point instead of a point of misunderstanding.”  

Friday, June 27, 2014

Ways to Maintain Landscaping During the Drought

One constant issue in owning a home during a drought is how to maintain the quality of your landscaping and still conserve water.  California’s lengthening drought is focusing new attention on sustainable landscaping, as homeowners try to balance maintaining an attractive yard with the critical need to conserve water.
Landscaped yardSustainable landscaping is much more than simply choosing a desert motif and packing your yard with cacti and succulents. It includes lawn-care practices that are sensitive to the environment while delivering surprising health benefits.
Environmentally friendly landscapes can cool the area around homes and office buildings, reduce air pollution and dust, build healthy soil, reduce runoff and erosion, attract wildlife, and produce oxygen.
The University of California’s Division of Agriculture and Natural Resources website offers urban-landscaping advice, including  gardening and irrigation tips, water-wise plants, and a lawn-care guide. Scroll down the Drought Information page and check out the links under its Landscape and Urban section.
Good advice also comes from Planet, a landscaper trade association, which offers the following tips to help homeowners build an outdoor space that can provide both beauty and peace of mind during the drought:
Test your soil: Check the pH level of the soil to ensure that you have a healthy yard. Either have a professional do it or get a test kit from your local agricultural extension office. Plants won’t grow well if the pH balance is off.
Put the right plants in the right places: Place shade plants in shady areas and those that need sun in bright locations. Doing so will create less stress on the plants and help to keep them disease-free.
Use less water: Look for plants and grasses that require less water. Also, water your lawn and garden either early in the morning or late in the day, and water less often but for a longer time.
Build healthy soil: Healthy soil is necessary to grow healthy plants, but it also supports microorganisms and results in plants that are less susceptible to disease and pests. Healthy soil also produces more oxygen, sequesters more carbon, and supports local  animals and insects that help keep the ecosystem healthy.
Protect wildlife: By offering animals and birds food, shelter, and water, homeowners can have a large impact in the survival and health of urban wildlife, which studies have shown is adversely affected by development.
Caution with pesticides: Misusing pesticides can harm both people and animals and can taint water supplies. Apply pesticides only as a last result and by follow the directions exactly.
Mow and prune the right way: Correct mowing and pruning can help minimize pesticide, water, and fertilizer use which in turn lessens the chance of polluting the water.
Cut down on stormwater runoff: By preventing stormwater from running off onto neighboring yards, homeowners can help stop flooding, erosion, and water pollution; restock groundwater supplies; and benefit wildlife habitats.

Marin County Is Safest in Country

Well, one thing everyone wants to have when they move to a new home and community is personal safety for them and their children. In a new survey, Marin tops the list nationally!
An April survey found Bay Area residents were among the nation’s happiest. Now, a new study by U.S. News & World Report shows that our local counties also rank as among the healthiest for children.
The publication awarded Marin County a perfect score of 100 and a No.1 ranking, based on a combination of factors including low birth weight and poverty levels. San Francisco also cracked the top 10, coming in with a score of 91.5 to place sixth.
Eight of nine Bay Area counties ranked on the 50-county list, including San Mateo (No. 11), Santa Clara (No. 16), Sonoma (No. 36), Napa (No. 42), Alameda (No. 45), and Contra Costa (No. 47).
Not only is such a rank important for your own peace of mind, but it also is one of those "intangibles" that helps your home maintain its value.