Friday, November 20, 2015

Price Peaks and Energy Savers

Well, today we get, or YOU get, a doubleheader! Following below are the latest price stats with new area highs around the Bay Area; and some insulation info going into the winter to keep you safe and warm without breaking the bank!

First, value highs:

Pacific Union’s October 2015 Real Estate Update

The number of homes on the market remained in short supply across Northern California as the fourth quarter kicked off, with the months’ supply of inventory (MSI) dropping from September in each of Pacific Union’s Bay Area regions except for Napa and Contra Costa counties. Meanwhile, the median sales price hit a one-year high in Marin and Napa counties.


Marin County‘s median sales price has been above $1 million since March and hit a yearly peak in October at $1,222,500. The average home sold for 98.3 percent of asking price, nearly identical to numbers recorded one year ago.PowerPoint Presentation
After seeing a solid increase in September, the MSI fell to 1.6, while the pace of sales picked up, with the average home selling in 48 days.
Defining Marin County: Our real estate markets in Marin County include the cities of Belvedere, Corte Madera, Fairfax, Greenbrae, Kentfield, Larkspur, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito, and Tiburon. Sales data in the adjoining chart includes single-family homes in these communities.

Second, Winter Warmth:

Is Your Home Properly Insulated? Are You Sure?

InsulationTrade organizations are notorious for sending out press releases claiming their products and services are critical to the survival of mankind. No doubt the cellulose-sponge industry ranks itself right up there with cancer researchers and firefighters in terms of lives saved.
So you can understand our skepticism when we received word from the North American Insulation Manufacturers Association alerting us that 90 percent of American homes don’t have enough insulation. Right. And the solution is to rush out and buy gobs more insulation.
This time, though, the press release had solid facts to back up its claims, and it opened the door to some fascinating research on home energy use and conservation. For instance:
  • Homes built in 2000 and later are, on average, 30 percent larger than those built before 2000, yet they consume only 2 percent more energy. That’s because of more-efficient heating equipment and better-insulated building shells. Homes today use 21 percent less energy for space heating than older homes.
  • In 1993, heating and air conditioning accounted for 57.7 percent of home energy consumption, but by 2009 that figure had dropped to 47.7 percent. Energy use for appliances, home electronics and lighting, meanwhile, jumped from 24 percent to 34.6 percent.
  • California households use 31 percent less energy than the U.S. average. Increased conservation efforts may play a part, but the main reason is the Golden State’s mild climate. More than 40 percent of our homes do not use air conditioning, and 14 percent are not heated.
Much of the data on home-energy consumption was developed with the help of researchers from the nearby Lawrence Berkeley National Laboratory. In fact, the insulation manufacturers group mentioned above used Lawrence Berkeley’s methodology to determine the energy savings possible with increased home insulation levels.
The trade group found that home electricity use nationwide would drop by 5 percent — and natural-gas use by more than 10 percent — if all U.S. homes were fitted with insulation based on the 2012 International Energy Conservation Code, developed in part by the U.S. Department of Energy.
Increased home insulation reportedly would also reduce levels of carbon dioxide and other pollutants.
“The fall is when many homeowners around the country begin thinking about home improvements to increase comfort and reduce their energy bills as temperatures drop come winter,” Curt Rich, the trade group’s president and CEO, said in a statement. “Research like this should reinforce our message to homeowners, and to policymakers, that added insulation has real and significant benefits.”
For help determining proper home-insulation levels and information on insulation products, visit the trade group’s website, which includes content on installing insulation yourself.

Beyond this, if you need assistance in getting to a good insulation contractor--or any other assistance--give us a call! The numbers are easy: Peter: (415) 279-6466; Jane: (415) 531-4091.  And have a Happy Thanksgiving!

Friday, November 13, 2015

Looking Forward

For those of you interested in looking into the future here in the Bay Area, the following will alert you to a detailed incisive forecast of the coming few years.

Pacific Union, John Burns Real Estate Consulting Offer Bay Area 2018 Outlook

Pacific Union is excited to share the news that, for the second straight year, we will join forces with Irvine, Calif.-based John Burns Real Estate Consulting to forecast real estate activity and economic conditions across the Bay Area and the Lake Tahoe/Truckee region over the next three years.jbrec2018_blog
On Wednesday, Nov. 18, at 5 p.m. PST, we will present our exclusive, live, one-hour outlook — followed by a cocktail reception — at the SFJAZZ Center in San Francisco, the site of the 2014 event. This year, we’re proud to have The Wall Street Journal co-sponsor the presentation.
Pacific Union CEO Mark A. McLaughlin will lead the presentation, with esteemed economists JBREC CEO John Burns and Senior Vice President Dean Wehrli offering their expertise on our local markets. The panel will delve into factors that will shape the Bay Area’s economy and individual real estate markets through 2018, as well as take a look back at how last year’s projections played out.
As we did for last November’s event, we will simulcast the presentation in real time in both English and Mandarin; you can check out a video of last year’s presentation here. To register for this year’s webcast, click here. To learn more about attending the event in person, please contact your Pacific Union real estate professional.
If you need assistance on your particular real estate needs, by all means, call us! Peter: (415) 279-6466; Jane: (415) 531-4091. We'd be happy to help!

Friday, November 06, 2015

Most Cash Buyers 'Putting Down Roots'

When someone buys a house 'all cash' there are any number of reasons why no loan is involved.  One of these may be that the buyer has no intent of remaining very long for any number of reasons. Previously, it was rarely a case of the buyer planning to stay for some extended period of time--'putting down roots' as it were.
Well, that appears to be changing here in the Bay Area.
Two-thirds of Pacific Union’s all-cash buyers are purchasing homes as primary residences, while a smaller than expected percentage is employed by a tech company.
Those are among the key findings from an internal analysis of Pacific Union all-cash sales from Feb. 1 to June 30 of this year. We looked at 323 all-cash deals in eight of nine Bay Area counties (excluding Solano County) in an effort to learn more about this crucial segment of the market, which makes up about 30 percent of our firm’s business.
Primary Homebuyers
Sixty-six percent of our firm’s all-cash buyers purchased a home in the Bay Area as a primary residence. The overwhelming majority of these buyers are domestic, with foreign citizens accounting for just 6 percent of all-cash sales. Eighty percent of buyers in the tech industry purchased a home for a primary residence, a testament to the region’s economic bread and butter. The majority of these tech buyers purchased homes in San Francisco and Silicon Valley.
However, of those 323 all-cash transactions, only 40 – 12 percent – were made by tech workers. Two-dozen of those sales occurred in the ultracompetitive San Francisco market, where all-cash buyers have a distinct edge over those who require financing.
The other 82 percent of all-cash buyers were basically split in half between domestic white-collar professionals and those categorized as “other.”
Long- and Short-Term Investors
Investors were responsible for 34 percent of all-cash deals. These buyers purchased property with three strategies in mind: a long-term hold plan, a source of rental income, and flipping.
Twenty-four percent of all-cash investors purchased a property as a secondary home. Domestic investors accounted for 20 percent of these sales, while international and tech buyers represented the other 4 percent.
Seven percent of investors plan to take advantage of the high-dollar world of Bay Area rents by buying income-generating properties. These buyers are all wealthy Americans, and not a single one hailed from overseas. Flippers accounted for the final 3 percent of cash investors, an unsurprisingly small number given that the Bay Area’s hefty home prices can make for relatively slim profit margins.
Tech and International Buyers Paying More
As a final note of interest, our analysis shows that although international and tech-industry buyers accounted for just 18 percent of Pacific Union’s all-cash sales, these buyer groups tend to spend substantially more on homes.
Domestic other and professional buyers paid average sales prices of $1.32 million and $1.68 million, respectively. For all international buyers, the average sales price was $2.26 million, with Chinese buyers spending $2.66 million. Techies had the highest average sales price of any of the buyer groups, at $2.78 million.
Editor’s Note: Pacific Union has an approximate market share of 10 percent in the Bay Area, with much larger market share in certain areas (like San Francisco’s Marina neighborhood) and lower market share in other areas (such as the Mission District), so the results of this analysis might differ if a 100 percent sample size were taken.
This doesn't mean you have to do the same if you're buying. A mortgage is still a fine way to go fore any number of reasons--personal financial reasons, tax deduction and so on.  A suggestion, whether you're a Buyer or Seller: CALL US!  You know the numbers: Peter: (415) 279-6466; Jane: (415) 531-4091. We'd be pleased to help in any way possible.

Friday, October 30, 2015

Prepare for El Nino: Avoid Floods!

Well, it's been five years that this drought has gone on. Now, as you may have heard, it appears some relief is in sight.  An El Nino event, and a major one at that, is predicted for this winter.  It very well could end the drought, but at the same time, cause serious flooding.  The best advice for such a possibility is preparation.  Read on because I can tell you from bitter experience, flooding is no fun!!
After years of drought, Bay Area residents now face the threat of torrential rain this winter with the approach of El Niño storms for the first time in nearly 20 years. State agencies are already taking steps to deal with the expected flooding and declared this past week (Oct. 19-24) California Flood Preparedness Week.
Don’t wait until it’s pouring rain to make sure your home is safeguarded against flooding and your loved ones know what to do in the event of high water. Below, we list several websites that offer excellent advice in the event of flood conditions. But first, take a look at some practical guidelines:
  • Most home-insurance policies don’t cover damage caused by a flood, and the government offers disaster assistance only when the President declares a major disaster. Ask your insurance agent whether flood insurance is available in your area.
  • Consider installing backflow valves or standpipes to prevent sewer lines from clogging.
  • If you live near a flood plain, a creek, or a river, elevate your washer, dryer, water heater, oil tank, furnace, and wiring on concrete blocks. Install a sump-pump system if you have below-grade floors. And get a flood-detection device that sounds an alarm or alerts your phone if it senses water.
  • Store family items and important documents on the highest level of your home. If you live in a single-floor home, put items on shelves, tables, or countertops.
  • Turn off utilities at the main power switch.
  • Sanitize your bathtubs and sinks and fill them with fresh, clean water in case the water supply becomes contaminated.
  • If you feel threatened by rising water, leave your home or move to upper floors.
  • Never try to drive through a flood. It takes just 12 inches of flowing water to carry off a small car, and 18 to 24 inches for larger vehicles.
  • If you are in your car when the water begins to rise quickly, abandon it and move to higher ground.
  • Do not walk through flood areas; just six inches of water can sweep you away. Make sure your children know to always turn away from floodwaters.
  • Avoid downed power lines.
  • Check for structural damage before going inside.
  • If it’s dark, use a flashlight — not matches, a candle, or a lighter.
  • Use your cell phone or other camera to photograph damage, which can help get an insurance claim started sooner. Take stock of damaged or destroyed items.
  • Begin your initial cleanup as soon as waters recede. Separate damaged items from undamaged possesions and clean and disinfect everything that got wet. When cleaning, wear a mask, gloves, and coveralls to minimize exposure to possible hazardous materials.
  • Mold can be a hazardous result from a flood. Consider a professional service that specializes in post-flood cleanup.
For more specific information, check out these websites:
The California Department of Water Resources is responsible for flood safety preparations in the state and has an excellent website that explains the dangers we face and the resources to help us recover. Make it your first stop online.
Next, My Hazards, maintained by the Governor’s Office of Emergency Services, lets you easily determine if your home is near a flood plain. (It also identifies earthquake, fire, and tsunami zone hot spots.)
Official flood-zone maps are available online from the Federal Emergency Management Agency. Additionally, the Insurance Institute for Business and Home Safety identifies weather and natural disaster risks by ZIP code.
When inclement weather approaches, check out the National Weather Service’s Bay Area forecast website for a summary of current conditions and forecasts, detailed maps, preparedness information, and useful links. And for an explanation of what El Niño is all about, visit the NOAA El Niño Portal page.
FEMA’s FloodSmart website is the official site of the National Flood Insurance Program and an excellent resource for information on flood dangers and recovery. One of the interactive tools on the page shows the cost of a flood to your home, inch by inch. Flooding of just 6 inches in a 2,000-square-foot home, for example, can cost nearly $40,000 — including more than $15,000 for damaged flooring and carpeting alone.
Another FEMA website has a roundup of federal flood-insurance information for property owners, including an online claims handbook, how to find an agent, how to file a claim, and disaster-support resources.

Bay Area Values Outpace California

Well, you already knew how valuable Bay Area, and by extrapolation, Marin, real estate was. The following will perfectly illustrate how valuable it really is!  This is in spite of a drop in Marin values from a year ago.
Although home prices eased a touch across the Bay Area from August to September, they still grew at more than twice the statewide rate on a year-over-year basis.Money_Suburb
In its September home sales and price report, the California Association of Realtors says that the median sales price for a single-family home across the nine-county Bay Area was $796,470 last month, a decline of 1.0 percent from August. Across the Golden State, single-family home prices fell by 2.3 percent from the preceding month to $482,150.
On an annual basis, Bay Area home prices were up 10.7 percent, more than double the 4.3 percent price growth recorded in California. Eight of nine counties saw year-over-year price gains, ranging from 13.3 percent in Alameda to 4.0 percent in Napa. In Marin County, home prices fell by 9.4 percent from September 2014.
In a statement accompanying the report, CAR Vice President and Chief Economist Leslie Appleton-Young said that home prices across the state are moderating due to more buyers seeking out lower-priced areas. She noted that home sales in the Central Valley represented 26.4 percent of California transactions in September, up from 25.5 percent one year ago. During that same time period, the share of Bay Area homes sold declined from 18.8 percent in 2014 to 17.2 percent this year.
An uptick in sales in California’s Central Valley could likely be due to the rise of so-called “mega-commuters,” San Francisco and Silicon Valley workers who are willing to travel hundreds of miles from far-flung places where homes are much more affordable. The San Jose Mercury News recently reported on this trend, documenting back-breaking commutes such as the trek between the San Joaquin County city of Manteca and downtown San Francisco — a 150-mile round trip that can take up to three hours each way.
Bay Area workers hoping to buy a home closer to the office had a bit more properties to choose from as fall officially began, with the months’ supply of inventory (MSI) across the nine-county region rising from 2.3 in August to 2.5 in September. Napa and Solano were the only local counties where inventory dropped on a month-over-month basis.
Bay Area homes continued to sell at a quick clip in December, with the properties finding a buyer in an average of 22.3 days, unchanged from the previous month. Alameda County had California’s fastest past of sales, at 18.0 days, followed by San Mateo (18.7 days), Santa Clara (19.1 days), Contra Costa (20.3 days), and San Francisco (21.5 days) counties.

Friday, October 23, 2015

Sales, Prices to Grow in 2016

According to the California of Realtors, both home prices and number of homes sold should increase moderately in 2016.
In its 2016 Housing Market Forecast, the California Association of Realtors projects that single-family home sales will total 433,000 next year, a gain of 6.3 percent from the 407,500 transactions expected this year. Home sales dropped on a year-over-year basis in both 2013 and 2014.
CAR also forecasts prices to rise in 2016, with the median sales price reaching $491,300, up a modest 3.2 percent from this year’s projection. That’s the slowest rate of annual appreciation in five years and a far cry from the 27.5 percent gains recorded in 2013.
“The foundation for California’s housing market remains strong, with moderating home prices, signs of credit easing, and the state continuing to lead the nation in economic and job growth,” CAR Vice President and Chief Economist Leslie Appleton-Young said in a statement. The report estimates that California’s unemployment rate will drop to 5.5 percent in 2016, down from 6.3 percent this year.
CAR President Chris Kutzkey pointed to low interest rates as another driver of 2016 home sales. CAR projects that interest rates will finish 2015 at 3.90 percent and will climb to 4.5 percent by the end of next year. Recently, pundits have predicted that the Federal Reserve may delay raising interest rates until March 2016. For the week ended Oct. 8, Freddie Mac said that 30-year, fixed-rate mortgages averaged 3.76 percent.
Kutzkey said that in places like the Bay Area, with its insufficient supply of homes on the market, diminishing affordability could stymie sales growth in 2016. Affordability dropped in all nine local counties in the second quarter, with only one in five Bay Area residents able to meet the minimum-income requirement to purchase a home.
CAR projects that number of Californians who can afford a home will drop to 27 percent in 2016, down from 31 percent this year. In 2011, when the median sales price was less than $300,000, more than half of Golden State residents could afford to purchase a home.
So, what do you do?  How do you check out your options? Speaking of which, what are your options? Give us a call for advice and assistance. If you're a regular reader, you already know the numbers. Here they are again: Peter: (415) 279-6466; Jane: (415) 531-4091.  We'd be happy to put our combined half century plus of experience to work for you!

Monday, October 19, 2015

Low Interest Continues; All Cash Chinese Buyers

Well, a number of interesting items have popped up this past week.  The most interesting from this point of view are projections for the continuation of low interest rates, likely through the rest of 2015, and possibly into next year, as well as an influx of all cash buyers from China.  For more info, read on below.

A message to homebuyers anxious about rising interest rates on home loans: relax. You’re not going to miss out on today’s super low mortgage rates if you’re just now starting to search for your dream home in the Bay Area. (Or that getaway ski home in the Lake Tahoe/Truckee region.)
Fed Chairwoman Janet Yellen
Fed Chairwoman Janet Yellen
Recent analysis and crystal-ball gazing by economists has generally put off a rate increase until mid-December at the earliest, and quite possibly not until March 2016. The next meeting of the Federal Reserve’s Federal Open Markets Committee is scheduled for Dec. 15-16, and Fed Chairwoman Janet Yellen has made it clear she will give the markets plenty of time to adjust to the change. If the global economy doesn’t improve markedly by December, March is a more likely date for a rate hike.
And even when rates do increase, they will crawl higher, not jump.
The Bay Area’s Yellen — remember, she was head of the San Francisco Federal Reserve Bank before taking the top job — has said that future interest-rate increases will be gradual, no more than 1 percentage point a year. And perhaps much less: Jonathan Smoke, chief economist for, told The New York Times that he expects to see a gradual increase in interest rates totaling no more than half a percentage point over a 12-month period.
That means that today’s interest rates will still be a bargain by historical standards. And that will help make homes in the Bay Area and across Northern California much more affordable over the life of a mortgage than their price tags suggest.
Interest rates on a 30-year, fixed-rate mortgage averaged 3.85 percent last week and have been largely unchanged for more than a month, according to Freddie Mac’s weekly rate survey. Fifteen-year mortgages were at 3.07 percent last week, with five-year adjustable-rate mortgages at 2.91 percent and one-year ARMs at 2.53 percent.
It’s worth noting that mortgage rates in Western states lately have been lower than the national average. Freddie Mac said the average 30-year FRM in the West was 3.80 percent, compared with 3.82 percent in the North-Central U.S., 3.87 percent in the Northeast, 3.89 percent in the Southeast, and 3.90 percent in the Southwest.
The bottom line: Talk to your real estate professional, start scoping out desirable neighborhoods, and get started on a preapproved home loan. But don’t forget to stop and smell the roses in your new backyard.

Now, regarding those all cash buyers from China, the following is the latest from the horse's mouth.

Almost half of Chinese homebuyers across the country are paying for their purchase entirely in cash, a substantial increase over the past decade.benjamins
A RealtyTrac blog post says that for the 17 months ended May 2015, 46 percent of transactions by Mandarin-speaking buyers were all-cash deals, up from 14 percent in May 2005. Nationwide, all-cash transactions rose from 20 percent in 2005 to 33 percent in 2015.
“Cash buyers across the board are playing a much bigger role in the housing market now than they were 10 years ago, and that is particularly true for Chinese Mandarin-speaking cash buyers, who are more likely to be foreign nationals,” RealtyTrac Vice President Daren Blomquist said in a statement accompanying the report. “Foreign cash buyers have helped to accelerate U.S. home price appreciation over the past few years given that these buyers are often not as constrained by income as local, traditionally financed buyers.”
Over the past decade, Mandarin-speaking homebuyers have increased by 9 percent, more than any other foreign-language group. Earlier in the summer, a survey by the National Association of Realtors found that buyers from China were responsible for 16 percent of U.S. international property sales, also the most of any nationality. For the 12 months ended March 2015, China invested almost $29 billion in the U.S. housing market.
The Bay Area is a top destination for Chinese homebuyers, who are attracted to the region for its relative value compared with property costs in other international cities, high-caliber educational opportunities, and healthy lifestyle. In an April interview, Pacific Union CEO Mark. A McLaughlin told SFGate that 25 percent of homebuyers in Palo Alto had a connection to China.
McLaughlin, who developed and implemented Pacific Union’s unique China Concierge program in 2013, will travel to Beijing in November to present at Hurun Report’s 2015 Top Entrepreneurs Forum.

Need any further info on the current market or what your home may be worth, give us a call! You know the numbers: Peter: (415) 279-6466; Jane: (415) 531-4091. We'd be pleased to update you or assist in any other way you may require.

Friday, October 09, 2015

Boomers Driving Market

As with so many other things, it seems that the Baby Boomers are the driving force behind the housing market.
For all the talk of millennials’ importance to the future health of the U.S. housing market, the baby boomers appear poised to have the biggest impact on demand for housing.
Citing figures from the U.S. Census Bureau, the National Association of Realtors says that the 65-74 age group added 860,000 new households in the first half of 2015 when compared with the first half of 2014. The 55-64 bracket had the second-largest gains, with 391,000 additional households, followed by those age 75-plus at 264,000.
Millennial household formation was more of a mixed bag. While the 25-34 age group gained 159,000 new households, 20-24-year-olds lost 85,000. NAR’s post notes that between 1980 and 2013, the share of 25-29-year-olds living with their parents increased from 10 percent to 25 percent.

If you want to be in the Driver's Seat, call us! We'd be happy to help. Peter: (415) 279-6466; Jane: (415) 531-4091.