Todd & Lisa Sheppard
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Lisa
Sheppard
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707-483-9990
Email:
Lisa@TEAMSHEP.com
BRE # 01154225
Todd
Sheppard

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707-235-6870
Email:
Todd@TEAMSHEP.com
BRE # 01314350

Archive for October 2012

Real Estate Week: Big Drop in Q3 Foreclosures and a Big Jump in Bay Area Rental Rates

October 29th, 2012   by lisasheppard

Photo of a forclosure sign

The Bay Area led the nation in the third quarter for falling foreclosure rates, down 36% from a year earlier.

Here’s a look at news this week of interest to homebuyers, home sellers, and the home-curious:

BIG DROP IN BAY AREA FORECLOSURES
Foreclosures in the Bay Area plunged in the third quarter, down 36 percent from a year earlier, signaling that local housing markets are doing a good job of working through the glut of troubled properties.

The San Francisco-Oakland-Fremont metropolitan area led the nation in decreased foreclosure activity, according to a quarterly report from RealtyTrac, an online marketplace of foreclosure properties. Elsewhere, foreclosures fell in nearly two-thirds of the nation’s largest metro areas, for an average decline of 13 percent.

The Bay Area’s foreclosure rate at the end of the third quarter was 1 in every 178 homes, still well above the national average of 1 in every 248 homes.

BAY AREA RENTS KEEP RISING
Apartment rental rates continue to climb higher in San Francisco, Oakland, and San Jose, according to an article in the San Francisco Chronicle.

The average asking rent at buildings in Oakland with at least 50 units jumped 19 percent in the third quarter year over year, to $1,925, for units ranging from studios to three bedrooms. Average rents rose 7.6 percent to $2,768 in San Francisco and 9.6 percent to $1,845 in San Jose.

C.A.R.: PENDING HOME SALES EDGE HIGHER
A tight supply of available properties constrained California pending home sales in September, according to the California Association of Realtors, with sales rising a meager 1 percent from a year earlier.

In a companion report, the National Association of Realtors posted similar results for the Western United States, with pending sales up just 1 percent year over year, and a tight supply of homes to blame. But the news was brighter nationwide, as pending sales increased an average 14.5 percent. Pending home sales are forward-looking indicators of future sales activity and occur when a contract has been signed, but the transaction has not closed.

(Note: We have frequently stated on this blog that Bay Area real estate has little in common with the rest of California. We reported last week that Bay Area home sales in the first three quarters of 2012 are up 15 percent compared with the same period last year.)

U.S. NEW-HOME SALES JUMP 27%
Sales of new single-family homes in September rose 5.7 percent from August and 27.1 percent from a year ago to a seasonally adjusted annual rate of 389,000 — the strongest pace since April 2010, according to a report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

New-home sales were up 75 percent year over year in the Northeast, 62.1 percent in the West, and 24.3 percent in the South, but they fell 31.9 percent in the Midwest.

Low Mortgage Rates Bedeviled by Lending Rules, but Boosting Credit Score Will Help

October 25th, 2012   by lisasheppard

Scrabble letters spelling the word "loan"Mortgage rates today are at their lowest levels in decades, giving homebuyers a chance to save tens of thousands of dollars on mortgage payments.

Unfortunately, it’s difficult to get those low rates. Tight lending standards adopted after the housing collapse have made it tougher to qualify for loans and lengthened the time it takes for loans to close.

Recent statistics from Ellie Mae, a Pleasanton company that makes software for the mortgage industry, tell the story:

  • The average FICO credit score for all mortgages approved in September was up 2 points from a year earlier, to 750. But the change was more pronounced for denied mortgage applications, rising an average 8 points, to 704, in one year.
  • It took an average 50 days to close a home loan last month, up from 41 days a year ago.
  • Refinancing accounted for 65 percent of home loans last month, with purchases accounting for 35 percent. A year ago the split was 60/40.

FICO scores range from 300 to 850, and virtually all lenders use them to gauge credit risk. The score can help determine how much money a lender will offer and at what terms, with higher scores typically resulting in lower mortgage rates.

HABITS OF FICO HIGH ACHIEVERS MyFICO, the consumer division of San Jose-based Fair Isaac Corp., which developed the score, recently revealed some key habits and behaviors of “high achievers” — those with credit scores above 785.

More than 50 million people — a quarter of all those with credit scores — are considered high achievers, and myFICO said they share “strikingly similar credit habits regardless of background and life experience.”

They keep low revolving balances relative to their available credit, don’t max out their credit cards, and consistently make payments on time.

Surprisingly, these high achievers aren’t debt-free. They have an average of seven credit cards, including open and closed accounts, and typically carry balances on four credit cards or loans. One-third have have balances of more than $8,500 on non-mortgage accounts.

Fully 96 percent of high achievers have no missed payments on their credit reports, but of those who do, it happened four years ago, on average.

PAY ATTENTION TO PAYMENT HISTORY Because payment history makes up the biggest chunk of how a person’s FICO score is calculated — 35 percent — managing credit responsibly over time plays a large part in improving a credit score, myFICO said. This includes paying at least the minimum amount on all credit cards every month.

“Missing payments will lower a person’s FICO score, but if that happens, establishing or re-establishing a good track record of making payments on time will generally improve a person’s score,” according to Anthony Sprauve, credit score adviser for myFICO.

“While people with a high FICO score are not perfect, their consistently responsible financial behavior usually pays off over time,” Sprauve said in a statement. “In a challenging economic period, the fact that we all have a chance to be high achievers is very good news. The lesson from these high achievers is that it’s never too late to rebuild and score high.”

Pacific Union Quarterly Report: Q3 2012

October 24th, 2012   by lisasheppard

By now you’ve heard the optimistic news emanating from the media and real estate experts across the country: Housing markets are back on their way up.

Home values are rising, foreclosures are dropping, and housing starts are increasing. In addition, the Federal Reserve’s plan to purchase mortgage-backed securities to the tune of $40 billion a month should contribute to the climb by pushing down mortgage rates and boosting home prices.

Sounds like great news, and it is. But to those of us in the Bay Area, it’s a bit of old news. In January, we predicted we’d see the best year in housing since 2006. So far we have – and there are strong indicators that’ll continue, thanks to sustained job growth, low interest rates, and aggressive buyer demand.

If there’s a downside to all this, it’s that buyers who have been waiting on the sidelines hoping to pounce on a foreclosure or distressed property have likely missed their opportunity. The records being set for number of homes sold in the Bay Area are being accomplished with limited inventory, and this will contribute to price appreciation.

The combination of buyer demand and a continuing constrained supply of available homes is leading to a return of one of the hallmarks of the heyday of Bay Area real estate: the bidding war.

Multiple offers on well-priced properties are becoming the norm in many areas, and for every one buyer who lands the home, there are several frustrated suitors even more determined to find a new abode … thus fueling more multiple offers. We predict housing will be 3 to 6 percent more expensive by this time next year.

Our third-quarter report is packed with regional summaries and data that confirms our optimism. It also includes an exclusive feature story on bidding wars that was posted separately on this site last week.

Another feature of the Q3 report is a massive chart that tracks 10 years of home sales throughout the Bay Area and in Tahoe/Truckee — 66 cities, towns and neighborhoods in eight regions. A smaller chart showing regional totals appears below; click on it to see the full data set, which includes selected cities within each region.

Chart showing 10 years of Q3 home sales in Bay Area cities.

Below are some specifics on what’s happening in our regional real estate markets. For full details, please take a look at our complete third-quarter report.


CONTRA COSTA COUNTY

Contra Costa County sceneLike other Bay Area real estate markets, buyers in Contra Costa County vastly outnumbered sellers in the third quarter, resulting in multiple bids for fairly priced properties – often just days after homes are first shown to prospective buyers. However, homes priced significantly beyond their appraised value sat on the market longer.

Home sales have been rising all year, and the third quarter was no different. And sales would have been even higher if not for the limited inventory of homes on the market.

Home prices showed an increase in Lamorinda – Lafayette, Moraga, and Orinda – and a small gain in the Alamo, Danville, and Blackhawk communities, where the supply of distressed properties offset the price appreciation on other properties in the area.

Looking Forward: The end of the third quarter saw a small spike in the number of new properties coming onto the market, which may continue into the fourth quarter, but activity will slow down as the year draws to a close – sellers don’t want the distractions of prospective buyers when they’re putting up holiday decorations and spending time with their families. Business is expected to pick up again in January and February and on into the spring.


EAST BAY

East Bay sceneBuyers continued to outnumber sellers in the East Bay during the third quarter, and bidding wars among buyers continued apace. Almost 70 percent of all home sales in our East Bay offices involved multiple offers.

Buyers had to move quickly, as many homes in the region sold just a few weeks after coming on the market. The supply of available homes has dropped off significantly during the past year, yet home sales continued to climb higher, particularly in the sub-$1 million market.

Multiple offers on homes helped drive prices higher, and final sale prices in the region averaged 105 percent of the list prices – a healthy bonus for sellers.

Looking Forward: The East Bay remains a popular choice for buyers unable to get a home in San Francisco. Prices are moving higher, which should coax more sellers to put their properties on the market. Home sales are expected to remain strong through the fall, followed by a typical slowdown during the holidays and then picking back up again after the first of the year. If the economy continues to rebound and interest rates remain low, all signs point to a busy spring.


MARIN COUNTY

Marin County sceneHomes sold briskly across all price points in the third quarter in Marin County, despite the constrained inventory levels that currently bedevil all real estate markets in the Bay Area.

Open houses were well-attended throughout the quarter, attesting to the pent-up demand among buyers, and Mill Valley remains especially popular. Most sales in the county involved multiple offers.

Home prices are creeping higher but still nowhere near where they were in 2006 and 2007, and it may take several years before those who bought homes at the peak of the market will see significant price appreciation. A big part of the local real estate market typically involves trade-up buyers, but that’s been difficult lately for homeowners unable to sell at the prices they expected.

Looking Forward: Home stagers tell us that they’re busier than they’ve ever been. That’s a welcome sign that the severe shortage of housing inventory may lessen in the very near future, but other indicators suggest that sellers might be waiting until the spring to gauge the increase in home values before they join the market in substantial numbers. Recent action by the Federal Reserve to push down long-term interest rates should further encourage buyers through the next year.


NAPA COUNTY

Napa County sceneOur real estate professionals in Napa County had a busy summer, with increasing numbers of interested homebuyers at all price points – especially at the higher end of the market, which remained red-hot throughout the third quarter. In Napa, anything priced under $700,000, if priced well, sold immediately. In St. Helena, anything under $1 million sold equally fast.

The supply of homes on the market remained tight, with some buyers forced into bidding wars for well-priced properties. Investors remained active, presenting an extra challenge for first-time buyers because investors are often able to submit attractive, all-cash bids. All this activity helped push home prices moderately higher, although they remain below the highs reached in 2006 and 2007.

Wine Country properties remained popular, and a recent trend of Asian investment in the area resulted in at least one winery sold to an Asian buyer.

Looking Forward: October is shaping up to be another busy month, with year-over-year sales growth expected to continue unabated. After the typical slowdown during the holidays, we look for another busy year ahead, helped along by a rebounding economy and historically low interest rates.


SAN FRANCISCO

San Francisco sceneThe summer months typically see a slowdown in home sales, but this summer was anything but slow in San Francisco. An exceptionally tight supply of homes on the market resulted in frenzied activity among buyers looking to get into contracts at all price points in the third quarter, and multiple bids were the norm for all fairly priced properties – both single-family homes and condominiums.

Sellers found themselves choosing among multiple offers – in some cases 20 or more – which helped push single-family home prices higher across the city. Prices are now very close to the highs reached at the peak of the market in 2005-2006.

The limited homes-for-sale availability, coupled with strong buyer demand, should contribute to an increase in the median price for single-family homes. We expect this will encourage more sellers to come off the sidelines, which will help inventory levels rise.

Noe Valley, with its family-friendly ambience and the easy commute to the South Bay, was one of the hottest real estate markets in the third quarter. Overall sales volume in the neighborhood was sharply up compared with Q3 in 2011 – a trend that was also seen in the rest of the city’s District 5, which includes Cole Valley, Duboce Triangle, Haight-Ashbury, Mission Valley, and Twin Peaks.

In the condominium market, limited inventory woes continued through Q3, with the months’ supply of inventory tightening up. Even though inventory was down 40 percent, sales were up 38 percent, year over year – a tremendous increase.

As young professionals move into the city with cash in hand from recent tech IPOs and expansions, South Beach will certainly solidify its status as one of the most desirable neighborhoods for condos, especially along the waterfront.

Looking Forward: The constrained inventory that has played havoc with buyers over the past year is finally showing signs of loosening. Our real estate professionals are hearing of a sharp increase in business for stagers, who typically prepare properties for sale, and for professionals who do pre-sale inspections, so expect to see a wider selection of homes for sale over the next six months.


SONOMA COUNTY

Sonoma County sceneThe housing recovery in Sonoma County continued at a steady pace in the third quarter, with a marked increase in sales and steady increase in median home prices. Demand was particularly high at the start of the quarter for homes priced below $500,000, with most receiving multiple offers, and we saw increasing levels of demand for virtually all homes priced below $800,000. We saw significant activity among homes priced above $1 million, as well.

The supply of homes remained exceptionally tight. Foreclosures, short sales, and other distressed properties helped keep the housing inventory high in recent years, but there were fewer bank-owned properties coming to market in the third quarter. Meanwhile, some potential sellers were reluctant to put their homes on the market – some because the drop in home values in recent years left them owing more on their mortgage than their home is worth, and others because they don’t have enough equity yet to move up to a higher-priced home.

Looking Forward: With demand pushing prices higher, we expect to see more sellers motivated to put for-sale signs in their front yards in the coming months. Low interest rates, an improving economy, and pent-up demand are expected to keep the housing market busy well into 2013.


SONOMA VALLEY

Sonoma Valley sceneLike other regions across the Bay Area, the Sonoma Valley communities of Sonoma, Glen Ellen, and Kenwood continued to face a limited supply of properties for sale in the third quarter. As expected, virtually all homes that were priced “right” in the eyes of the buyers, reflecting a true value in terms of location and condition, generated multiple offers. Anecdotally, a vacant land parcel that had been on the market for over a year received multiple offers on the same day and sold for over the asking price. In another situation, a charming “under $500,000 country home” came on the market and after having little or no activity for three weeks, ultimately received four offers in the same three-day period.

Buyers looking for second homes accounted for an increasing share of the market in the third quarter. First-time buyers faced extra challenges in the region because they often were in competition with investors, who are able to pay more and submit attractive all-cash bids.

Investors have found that they are able to rent their properties in the area at rates that cover their mortgages for the first time in a long time. Here, as in other Bay Area cities, rents appear to be rising at a faster percentage rate than sales prices.

Home prices did rise in the quarter, albeit moderately, although they remain below levels reached in 2006 and 2007. On a positive note, 50 percent more properties with sales prices over $1.5 million sold in the third quarter as compared with the second quarter of this year.

Looking Forward: There is a concern that limited housing inventory for sale will continue throughout the fourth quarter and into the new year, which will promote the occurrence of multiple offers. First-time buyers may still face competition from investors, particularly in the under-$500,000 market, and may find themselves on the losing side of bidding wars more than once.


TAHOE/TRUCKEE

Tahoe/Truckee sceneLike the Bay Area, third-quarter real estate activity in the Tahoe/Truckee region was dominated by a limited supply of inventory and resulting bidding wars among buyers. All single-family homes and condominiums that were priced in line with their appraised values got multiple offers, with homes priced from $300,000 to $600,000 especially popular.

Many properties in the region are second homes for Bay Area residents, and activity typically spikes whenever prospective buyers are able to spend a few extra days in the area. Accordingly, the week before and after the Fourth of July were extremely busy, followed by a brief slowdown.

September was busy after students returned to school and Bay Area buyers sought to close deals so that they can spend the upcoming holidays skiing in the area. Sales were strong in Tahoe Donner and the Truckee area, with significant lakefront sales as well.

Looking Forward: Unlike traditional residential markets, winter in the mountains can be an active sales time. If skiing conditions are good the winter months have historically seen strong activity and sales, particularly in larger homes suited for skiing families or groups.

Real Estate Week: A Busy Year Ahead for Homebuilders, and S.F. is No. 1 in Real Estate

October 19th, 2012   by lisasheppard

Photo of a home under construction

Homebuilders are bullish on the prospects of a busy year ahead, according to a new report.

Here’s a look at news this week of interest to homebuyers, home sellers, and the home-curious:

NEW-HOME CONSTRUCTION REBOUNDING

U.S. builders started construction of new homes and apartment units at a blistering pace in September – up 15 percent from the month before and 35 percent from a year earlier, for the highest level of housing starts in more than four years, according to numbers the Census Bureau and U.S. Department of Housing and Urban Development released Wednesday.

In a separate report showing renewed vigor in home construction, the National Association of Home Builders said Tuesday that builder confidence in the market for single-family homes rose for a sixth consecutive month in October to its strongest level in more than six years.

SAN FRANCISCO IS NO. 1 IN 2013 FORECAST

A highly respected economic forecast puts San Francisco first in the nation for real estate investment, development, and housing in the coming year.

The Emerging Trends in Real Estate 2013 report from the Urban Land Institute and PricewaterhouseCoopers deals mostly with commercial real estate and investment but also includes data on the housing industry. An executive summary of the report, released Wednesday, had this to say about San Francisco:

“The market is driven by growth and a strong jobs outlook, led by technology and a structural change away from suburban and toward downtown. Continued infill interest is supported by providing one of the best transit systems in the country and a city center with walkability that is number two only to New York City.”

The report bookends our own Bay Area forecast for 2013, published Tuesday.

TIGHT SUPPLY HOLDING BACK HOME SALES

The tight supply of available homes lowered California home sales in September, while the median price reached its highest level in more than four years, the California Association of Realtors reported on Monday.

Statewide, September home sales were down 1.2 percent from a year earlier, while median prices for single-family homes and condominiums rose more than 19 percent.

The Bay Area did markedly better than the rest of the state, according to the C.A.R. report, with home sales up 6 percent in Marin County, 5.8 percent in Sonoma County, 5.6 percent in Contra Costa County, 4.8 percent in Napa County, and 0.4 percent in San Francisco. Only Alameda County recorded a drop-off, with sales down 4 percent.

2013 A STRONG YEAR FOR SHORT SALES

Rating agency DBRS expects foreclosure filings to keep falling in 2013 as short sales continue to rise.

Short sales have become the “primary loss mitigation tool to prevent delinquent loans from entering foreclosure,” DBRS said in a research note Monday. Foreclosure, it said, only adds expenses to a money-losing scenario.

CALIFORNIA LEADS IN LIST-PRICE INCREASES

The housing recovery continued to gain traction in September, with list prices rising in most California markets, according to data compiled by the website Realtor.com.

The San Francisco metro area came in third on a list of the top 10 markets in the United States with the greatest year-over-year list price increases (18.11 percent). Oakland was seventh (13.97 percent). Other California metro areas on the list were: Santa Barbara-Santa Maria-Lompoc (32.05 percent), San Jose (17.5 percent), Sacramento (14.23 percent), and Riverside-San Bernardino (12.56 percent).

Other stats: Oakland remained No. 1 in the nation for the shortest number of days that homes sit on the market – an average of just 21 days from listing to sale. Oakland has held that distinction since February, when Realtor.com began tracking days the metric.

Multiple Bids? Buyer Letters Get You Noticed

October 18th, 2012   by lisasheppard

Houses crowded on a San Francisco hill

Bidding for Bay Area real estate can get as crowded as this neighborhood scene in San Francisco.

These are tough times for Bay Area homebuyers. The supply of homes is tighter than it’s been in decades, and multiple offers are the norm. It’s not uncommon for some buyers to find themselves on the losing side of a bidding war four or five times before successfully closing on a home.

Sellers typically give preference to the highest bids with the fewest contingencies. But there’s another way buyers have a chance of getting their bid to the top of the pile: Include a personal letter in the proposal.

“Absolutely, it helps. A personal letter puts a face on the buyer, and that can make all the difference,” said Linda Carroll, branch executive of Pacific Union International’s Napa County region.

Carroll cited a recent Napa sale in which a couple didn’t submit the highest bid but included a letter complimenting the seller for the “charm and coziness of the house” and “your gorgeous backyard.” The letter described how the couple met and fell in love in Napa and now wanted to make a long-term commitment to the area. It also gave several reasons why the home and its location were a perfect match.

The letter worked.

“There was a higher offer, but the sellers chose not to take it because they liked the people they had come to know in the letter,” Carroll said.

EMOTIONAL CONNECTION

Many owners develop an emotional connection to their home that can influence decisions when it’s time to sell.

“It depends on the profile of the seller,” said Brent Thomson, a senior vice president at Pacific Union and branch executive in Marin County. “If the seller raised a family in a home and the decision is between a family that’s going to recreate that life or a single person who’s going to tear it down, the family has a better chance of having their bid accepted. And they can get that point across with a letter.”

A personal letter puts a face on the buyer, and that can make all the difference.

One of our real estate professionals in San Francisco told of a prospective buyer who fell in love with a house in NoPa, the neighborhood north of Golden Gate Park’s Panhandle, and wrote a letter saying “how he appreciated all the work the sellers had done on the house, and how he appreciated its eclectic nature. He knew all the right things to say.”

The house had been on the market for only four days, but the letter “was enough for the seller to say, ‘We know there’s another offer coming in, but we want to sell to this person. We found the perfect person for our house.’”

CLOSING THE SALE

A letter can do more than tug at heartstrings. It can satisfy a seller that the bidder is committed to closing the sale.

One of our real estate professionals in Orinda told of a seller who accepted an offer only to have the buyer back out at the last minute in favor of another house. A couple whose bid had been passed over had emphasized their commitment to the house and their determination to close the sale, and they were contacted immediately and asked to resubmit a bid. It was accepted.

Our real estate professionals have some advice for crafting a buyer letter that will get results:

> Research the sellers. Who are they and what do they do? What motivates them? Why are they selling?

> Explain your interest in the house, including what first caught your eye. Be specific.

> Describe yourself and why this house would be a perfect fit.

> Make clear your commitment to do whatever it takes to close the sale.

All Signs Point to Robust Housing Market in 2013

October 16th, 2012   by lisasheppard

A vew of crowded housing in San Francisco

A tight housing supply in San Francisco and elsewhere in the Bay Area guarantees that bidding wars will remain a fixture on the real estate scene in 2013.

2013 is shaping up to be a busy year for real estate in the Bay Area.

Interest rates for long-term loans are at the lowest levels ever recorded, and the Bay Area economy is growing significantly faster than the rest of the country. Tech companies are hiring again, and tourism is rebounding. Thousands of new jobs are being created every month.

It’s an ideal environment for homebuyers.

“Everything is pointing to a strong year in 2013,” said Mark McLaughlin, CEO of Pacific Union International. “The fundamentals of the Bay Area economy are solid, and after years of stagnation the pent-up demand for homes in the Bay Area is palpable.

“Demand is continuing to exceed supply, which could push prices higher, and that will encourage more homeowners to put their property on the market,” McLaughlin said. “You can be certain that buyers will be waiting.”

A recent forecast from the California Association of Realtors says home sales statewide will rise a modest 1.3 percent next year, but we anticipate much more robust activity in the Bay Area.

We’re already blowing past the C.A.R.’s estimate for 2012: The association predicts that home sales in California will rise 5.1 percent this year, but a check of MLS data for the first three quarters shows sales in our seven Bay Area regions up an average 15 percent compared with last year.

The Sonoma Valley region leads the Bay Area with home sales up 27 percent so far this year, followed by Marin County (21 percent), Sonoma County (18 percent), the East Bay (17 percent), Contra Costa and Napa counties (12 percent), and San Francisco (10 percent). In our Tahoe/Truckee region, sales for the first three quarters are 17 percent ahead of last year.

Skyrocketing rental rates will keep homebuying an attractive option. In fact, a recent report from Trulia determined that owning a home in San Francisco is 28 percent cheaper than renting. It calculated the average cost of home ownership in the city at $2,327 a month versus $3,226 for renting, for savings of $899 a month.

Low inventory and restrictive lending policies remain a challenge, and buyers can expect bidding wars through much of 2013 for desireable properties across the Bay Area.

Our advice for buyers: Determine what you can realistically afford, and get your financing and other paperwork in order up front. And then be ready to pounce when you find your dream home, and be prepared for a fight. Good luck!

Stately Homes and Tree-lined Streets Abound in Santa Rosa’s Historic McDonald Area

October 15th, 2012   by lisasheppard

Santa Rosa's McDonald Avenue

Santa Rosa’s McDonald Avenue is known for its historic homes, tree-lined streets, and walkability.

With its beautiful tree-lined streets, historic homes, and great walkability, the McDonald area remains one of the most-desired neighborhoods in Santa Rosa.

Named after civic developer Col. Mark McDonald, the neighborhood offers a rich history and stately homes, some dating back to the 1800s.

“The McDonald area is where a lot of the substantial, older-moneyed founders of Santa Rosa made their homes way, way back in time,” said Rick Laws, a senior vice president at Pacific Union International and branch executive of our Sonoma County office. “There’s just incredible, beautiful properties, old tree-lined streets, and exquisite architecture there.”

Bounded by Fourth Street, North Street, and Bryden Lane, the neighborhood’s close proximity to downtown makes it a snap to get to shops, restaurants, and Santa Rosa Memorial Hospital. Nearby businesses include Rosso Pizzeria and Wine Bar, Midtown Cafe, the Pacific Market, and the Town and Country Shopping Center.

Residents also enjoy access to some of the city’s top schools. Proctor Terrace Elementary School earned a 2012 Academic Performance Index score of 898, and Santa Rosa Middle School received a rating of 813.

Thanks to its classic exterior, Santa Rosa High School has appeared in a number of films, including “Peggy Sue Got Married,” “Inventing the Abbotts,” and “Scream.”

McDonald area homes range in style from classic Victorian to Craftsman to Italianate. The McDonald Mansion, Mark McDonald’s former summer home, dates back to 1879 and recently underwent a multimillion-dollar renovation.

Charming smaller homes, previously occupied by wealthy residents’ maids and butlers, remain scattered throughout the neighborhood.

Home prices range from $500,000 to as high as $6 million, with the majority of McDonald area homes selling for $800,000 to $1.5 million, one of our top Santa Rosa real estate professionals said. In September the average price of Santa Rosa homes for sale was $377,300, according to MLS data.

The neighborhood’s beauty tends to capture the hearts of homebuyers.

“I can’t tell you how many times we’ve taken people out looking at homes, and they may not even be thinking, ‘I’m going to live in the MacDonald area,’” our real estate professional said. “Then you drive through it, and you see the emotion on people’s faces.”

Real Estate Week: Appraisals Blamed; Shadow Inventory Shrinking; Foreclosures Falling

October 13th, 2012   by lisasheppard

Here’s a look at news this week of interest to homebuyers, home sellers, and the home-curious:

APPRAISALS BLAMED FOR CONTRACT GLITCHES

Undervalued appraisals may be holding back home sales.

In a September National Association of Realtors survey, 11 percent of Realtors reported canceled contracts due to an appraised home value below the negotiated price. Another 9 percent reported delayed contracts, and 15 percent said they renegotiated a contract to a lower sale price because of an appraisal.

However, a much larger majority, 65 percent, experienced no contract problems stemming from home appraisals.

One reason for the low values, according to the NAR, is that some appraisers fail to consider the difference between distressed and non-distressed homes when making comparisons. On average, a foreclosure sells for a 20 percent discount, and a short sale for a 15 percent discount. The NAR also complained that some appraisers operate under strict parameters set by lenders more focused on risk aversion than objective appraisals.

SHADOW INVENTORY SHRINKING

The nation’s shadow inventory of homes fell to 2.3 million in July, down 10.2 percent from a year earlier, according to the research firm CoreLogic.

Shadow inventory refers to the number of distressed homes likely to hit the market soon, but which don’t appear in multiple listing services or traditional pending-supply databases. Of July’s 2.3 million homes, 1 million are seriously delinquent, 900,000 are in some stage of foreclosure, and 345,000 are already bank-owned.

FORECLOSURES FALL TO 5-YEAR LOW

The wave of foreclosures hitting the nation’s housing market has been much less severe than anticipated, with September foreclosure filings reaching their lowest level in five years.

Foreclosure filings — including default notices, scheduled auctions, and bank repossessions — were reported on 180,427 properties in September, down 7 percent from August and more than 16 percent from a year earlier, according to a report Thursday by RealtyTrac, an online marketer of foreclosed properties. That’s the lowest number of filings since September 2007.

HOME EQUITY ON THE RISE

Rising home values are helping more home owners find equity in their homes, according to the September Housing Scorecard from the U.S. Department of Housing and Urban Development and the Treasury.

Home equity has reached its highest level since the third quarter of 2008, the report found. That increase helped lift 1.3 million families from being underwater, or owing more on their mortgage than their home is currently worth. The number of underwater homeowners dropped 11 percent since the end of last year, to 10.8 million.

CHECK FOR SCHOOLS, WALKABILITY … CELL PHONE COVERAGE

Homebuyers use a variety of metrics when evaulating neighborhoods, such as schools, shopping, and walkability. How about cell phone coverage?

Check out the OpenSignal website, which maps signal strength of various carriers in 20 metro acreas across the country, including the Bay Area. It does this through crowdsourcing, using data from millions of smartphone users who have downloaded the company’s mapping app.

The information is incredibly precise, showing cell phone strength for cities and neighborhoods down to an individual street address. You can filter the map by carrier or by 2G, 3G, and 4G coverage.

Healdsburg Attracts Tourists, Homebuyers Alike

October 12th, 2012   by lisasheppard

Healdsburg's main square

Healdsburg’s charming downtown boasts world-class restaurants, wine tasting rooms, and shops.

Healdsburg may be one of Sonoma County’s best-known tourist attractions, but the city of 11,000 is also a fantastic place to call home.

With its strong agricultural roots, charming downtown, and world-class restaurants and wineries, Healdsburg attracts a range of home buyers eager to live in the Russian River city.

“Healdsburg hasn’t lost its agricultural roots or its charm, but it’s certainly added a lot of upscale, fun retail, restaurants, and wine tasting,” said Rick Laws, a senior vice president at Pacific Union International and branch executive of our Sonoma County office. “There’s mostly wine tasting, retail, and restaurants in the ‘walking zone’ around the plaza …  and especially on Healdsburg Avenue, where there’s new hotels and fabulous restaurants.”

Favorite eateries include Madrona Manor restaurant, Zin Restaurant & Wine Bar, and Ravenous Café and Lounge, among numerous others. Cyrus restaurant, which boasts two Michelin stars, is closing this month but may reopen in another location.

Healdsburg offers an array of wine tasting rooms including Murphy-Goode, La Crema, and Kendall-Jackson. Those in the mood for a handcrafted lager or ale head to the Bear Republic Brewing Co.

Opportunities for recreation and entertainment abound in Healdsburg, and the city has a large number of parks, including 11-acre Badger Park, a skate park, and swim center. The Healdsburg Center for the Arts features more than 100 local art exhibits a year, and summer concerts delight music-lovers in the city plaza.

Healdsburg homes for sale vary in style, with many sporting a Victorian or bungalow look and offering vineyard views. The average price for homes sold in August was almost $670,000.

As in many parts of the Bay Area and U.S., the supply of homes for sale has been shrinking as demand rises. In August homes for sale fell 32 percent to 104 properties, down from 152 homes a year earlier, according to MLS data. Meanwhile, the number of homes under contract increased 11 percent.

Healdsburg attracts many types of buyers looking for everything from second homes to vineyard properties to primary residences.

“It’s a huge mix,” Laws said. “There are some people there whose home or ranch or store has been in the family for four or five generations, and then there’s other people who are retirees who move there.”

The Perfect Proposal: A Real Estate Love Story

October 12th, 2012   by lisasheppard

Picture of Jonni and Jonathan on their engagement day

Jonathan swept Jonni off her feet with roses and a proposal the day they closed escrow.

Most real estate transactions begin with an offer. But for a young couple buying their first home together, it ended with one – an offer of marriage.

Jonathan Graves and Jonni Offenbach, both in their early 30s, had been dating while maintaining separate homes and running businesses in Santa Rosa and in San Jose, respectively. But the distance was getting difficult, and they both agreed that they’d like to move in together.

“We also knew that we wanted to make it official first,” said Jonathan. Jonni has 8-year-old twins from her first marriage, and Jonathan felt they needed to “make things right” for the sake of the kids. When it came to popping the question, he said, “We both knew it wasn’t an ‘if,’ it was a ‘when’.”

They found the perfect 3-bedroom, 2-bathroom house in Novato, thanks to the efforts of Pacific Union International’s Sean Solway. And that’s when things got tricky.

Jonathan wanted to propose, but Jonni’s sister’s wedding was looming – and Jonathan didn’t want to steal her thunder. But he knew that waiting until after the wedding would be exactly what Jonni expected, and he wanted to create at least some element of surprise for his bride-to-be.

“Jonni would know that at some point between her sister getting married and us moving into the new house, she’d be getting engaged,” he said. “It wouldn’t be exciting. I needed to create the perfect opportunity to catch her off guard.”

So Jonathan hatched a plan, got the green light from Jonni’s sister and her family, and contacted his trusty real estate professional.

“I schemed together with Sean, and we pushed the house to go through to make sure the dates and timing worked,” he said.

“They were closing escrow on Friday, September 21,” added Sean, “and Jonathan asked if me if he could get the key early that day. He told me he was going to have Jonni meet him there after work on some pretense, and then propose.”

Jonathan spun a tale about meeting with contractors at the house and asked Jonni to join him afterward. When she got there, she was none the wiser.

“He opened the door, said ‘Welcome home!,’ picked me up and carried me over the threshold,” she said. “I thought it was really sweet but I had no idea what he was doing.”

That changed when Jonathan carried her upstairs into an empty bedroom with roses strewn on the floor in the shape of a heart.

“When he started talking, I realized what was happening. I was totally shocked!” she said. “I had no suspicion at all that this was what he’d been planning.

Mission accomplished for Jonathan: Jonni was taken completely by surprise (although she retained enough composure to say yes). As for Sean, he was happy to be in on the secret.

“It’s the first time I’ve ever had clients get engaged when they closed escrow – it was great,” he said. “They are a stellar couple, really solid people, and I’m thrilled to see how this turned out.”

So are Jonathan and Jonni. Although they haven’t yet set a wedding date, they’re both excited to start their lives together in their new home. And Jonathan’s proposal already has a place in family legend.

“It was an amazing moment, and a great start for all the good memories that we’ll be creating,” said Jonni.