The median home sales price across the nine-county Bay Area continued to enjoy vigorous year-over-year growth in December, while slim inventory helped constrict sales volume.
To read the full report, Click Here.
Recent news of interest to homebuyers, home sellers, and the home-curious includes news that San Francisco’s real estate prices have led one firm to label it No. 3 on the list of the world’s least-affordable cities. In other local real estate news, Oakland homebuyers took properties off the market faster than anywhere else in the country in December.
To read more, Click Here.
Inventory steadily declined across the Bay Area in 2013’s final quarter, further exasperating the situation for hopeful buyers who didn’t act earlier in the year.
December inventory hit yearly lows in every Bay Area region in which Pacific Union operates except for the East Bay and Sonoma Valley. In the Tahoe/Truckee area, inventory for both single-family homes and condos expanded as the fourth quarter advanced, with many buyers having locked in properties in advance of the ski season.
Prices remained healthy throughout the quarter, though in most markets they were down somewhat from their yearly peaks. The exceptions to this trend were our Silicon Valley region, where the median price hit a high of $2.32 million, and Tahoe/Truckee, where the median price for a single-family home topped $600,000 for the first time in the past 12 months.
Pacific Union’s fourth-quarter report is full of data and regional summaries that provide a comprehensive 2013 retrospective and point to a very promising year to come.
After years of downturn followed by measured recovery, our Sonoma County real estate markets are returning to normal. In the fourth quarter, that meant a more traditional seasonal slowdown as the dwindling supply of distressed-property sales gave way to more-stable equity sales. The market deceleration also reflected a significant shortage of available homes for sale in the face of continued strong demand from buyers.
The median sales price continued to rise in the fourth quarter, a reflection of the drop-off in foreclosures and other distressed sales, as well as solid appreciation in many price ranges. The quarter saw strong growth in sales of homes priced from $1 million to $2 million, plus significant increases for properties priced from $500,000 to $900,000. The second-home market also saw healthy sales, particularly in Healdsburg and other Wine Country destinations. Investor activity declined as prices rose, reducing the frequency of multiple offers.
Looking Forward: We expect the tight inventory levels of the fourth quarter to loosen by springtime, and buyers will be waiting. Less certain are the effect of rising mortgage rates and potential changes that would make loan regulations more restrictive. Future buyers are encouraged to get off the fence and secure financing sooner rather than later.
To read about other Bay Area counties, Click Here.
Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:
BERNAL HEIGHTS NAMED NATION’S HOTTEST ‘HOOD
San Francisco’s Bernal Heights neighborhood is hot, hot, hot, a new Redfin report says.
The brokerage’s Real Estate Neighborhoods to Watch in 2014 report named Bernal Heights’ North Slope the nation’s “hottest” neighborhood – and we’re not talking weather here. Bernal may enjoy some of the warmest temperatures in the city, but it was, after all, competing against neighborhoods in Austin, Texas and Las Vegas.
To obtain the results, Redfin ranked desirable neighborhoods around the country based on which homes its online users selected as “favorites,” along with insights from real estate professionals. While staples like good schools and proximity to parks continued to attract buyers, “the real trend in 2014 neighborhood popularity is a short commute at an affordable price,” Redfin said.
CONDO PRICES WAY UP ON THE WEST COAST
West Coast condos are in serious demand, particularly in San Francisco, the Wall Street Journal reports.
In December condominium prices were up 18 percent year over year in San Francisco and downtown Los Angeles and 15 percent in Seattle, the newspaper said. Meanwhile, the supply of new condos for sale fell more than 50 percent in both California cities.
The report comes on the heels of news that a condo in San Francisco’s South Beach neighborhood sold for a record-busting $2,500 per square foot.
HOMEBUILDER CONFIDENCE FALLS
U.S. homebuilder confidence fell modestly in January from a month earlier, according to a monthly report.
The National Association of Home Builders/Wells Fargo Housing Market Index slipped one point from December, coming in at 56 this month. However, the news is nonetheless upbeat since any figure above 50 indicates that more builders than not believe the market remains robust.
“Rising home prices, historically low mortgage rates and significant pent-up demand will drive a continuing, gradual recovery in the year ahead,” David Crowe, the association’s chief economist, said in a statement. “However, the pace of the recovery could be stronger were it not for rising construction costs and inaccurate appraisals that are keeping some home sales from going through.”
MORTGAGE RATES DOWN
Here’s some good news for homebuyers: Mortgage rates are falling again.
On Thursday, Freddie Mac said the average rate for a 30-year, fixed-rate mortgage declined to 4.41 percent, compared with 4.51 percent a week earlier.
The lower rates seem to be spurring more buying activity, with U.S. mortgage applications jumping a solid 12 percent, the Los Angeles Times reports.
The year 2013 brought continued prosperity to Pacific Union, and we are extremely proud of our real estate professionals, who helped our company achieve a number of significant milestones.
In 2013, Pacific Union posted sales volumes of $5.5 billion, the second consecutive year we’ve increased sales volume by more than 40 percent. The company has doubled its sales volume in two years, growing more than twice as fast as the overall market in 2013. We also increased our revenue to nearly $130 million, up 41 percent from 2012.
Pacific Union enjoyed sales growth at every price point but shined brightest in the high end of the luxury-home market. We lead the market in sales volume in the $1 million-to-$3 million range in the six-county region consisting of Alameda, Contra Costa, Marin, Napa, San Francisco, and Sonoma counties.
And in the final quarter of 2013, Pacific Union moved up to the No. 1 sales-volume slot in the $3 million-plus range, closing out the year with $750 million in total sales above that price point.
Growth also came in the form of market-share gains. The company continued its upward trajectory in the key Marin County region, moving into the top position with an 18.2 percent share of the market. Market share also increased in Contra Costa, San Francisco, and Sonoma counties. In Alameda County we have the second largest market share, and in Napa County, we rank No. 3.
Across those six counties, Pacific Union is now second in sales volume despite working with only about half the number of real estate professionals as the market leader. And there’s a simple reason for that: Our elite real estate professionals are the Bay Area’s most productive.
In 2013 Pacific Union real estate professionals ranked No. 1 in sales volume per capita in the six-county Bay Area region. Our real estate professionals also placed first in the quantity of total transactions closed per professional.
According to Pacific Union CEO Mark A. McLaughlin, the company’s dedication to recruiting only Northern California’s best and brightest real estate professionals has been instrumental in driving its exceptional growth over the past three years.
“Our organization is built on our principle of ‘managing to the top,’” McLaughlin says. “Our recruiting efforts are by invitation, not application. We cater to the finest professionals in the market and invest daily in programs, technology, and resources to enhance their efficiencies and separate them from the ordinary. Our results in the marketplace continue to support our vision.”
The year 2013 also saw the company launch its presence in Silicon Valley via a Menlo Park office. And in November, Pacific Union expanded in Sonoma County by opening an office in Petaluma and recruiting 18 of the region’s top real estate professionals.
The industry has taken note of McLaughlin’s role in leading the company to such robust growth. Recently, he made the Swanepoel SP200, a list that recognizes 200 of the residential real estate industry’s most powerful people. In November 2013, McLaughlin received RISMedia’s Real Estate Leadership Award, which honors the country’s top CEO for extraordinary leadership and innovation.
Pacific Union itself also earned accolades from both the real estate industry and media in 2013. In October we were named one of the 100 fastest-growing companies in the Bay Area, just two months after making the prestigious Inc. 5000 list.
Earlier in the year, the San Francisco Business Times ranked us third largest residential real estate company in Northern California; RISMedia named us to its PowerBroker list; and REAL Trends ranked us third in the U.S. for average home sales price.
The crowning achievement in Pacific Union’s extraordinary year came in December, when McLaughlin received an invitation from the U.S. ambassador to China to attend an exclusive meeting at the ambassador’s residence in Beijing. There, McLaughlin met with 10 of China’s wealthiest individuals about potential investments in U.S. real estate.
The recently concluded Consumer Electronics Show (CES) in Las Vegas offered a dizzying array of ridiculous new products for the home (unless, of course, you see real innovation in a Wi-Fi-enabled Crock-Pot or “smart” washing machines).
But behind the gadget one-upmanship were signs that real smart-home technology is advancing rapidly and may become an integral part of our daily lives in as soon as five years. Heating and air conditioning, lighting, security, and entertainment systems will be managed in ways that will save time, money, and environmental resources.
The missing component, so far, has been compatibility.
“With both applications and technology, most of the things that we need already exist,” Sanjay Sarma, director of digital learning at Massachusetts Institute of Technology, told NBC News. ”The challenge now is making them work together seamlessly, in a way that the user finds intuitive and convenient.”
Several companies, including Lowe’s and Staples, showed off home-automation controllers that enable smart-home devices from different manufacturers to link up and work together.
Microsoft, meanwhile, is reportedly interested in developing its Xbox gaming console as a home systems manager, and Google made headlines earlier this week with a blockbuster $3.2 billion deal to buy Nest Labs, a maker of smart thermostats and smoke alarms.
Homebuilders are wiring new homes for the latest technologies, but existing homes will also take advantage of smart-home automation through upgraded electrical outlets, home Wi-Fi networks, and smartphones doubling as controllers.
Homebuyers may face new challenges when applying for a home loan this year, the result of tough new rules from the U.S. Consumer Financial Protection Bureau (CFPB).
The new rules, which took effect Jan. 10, require borrowers to show more proof that they can actually afford the mortgage they are applying for.
Mortgage lenders must ensure that borrowers can afford their loans over the long term, and applicants’ income, assets, savings, and debt will be more closely scrutinized. Borrowers who meet the ability-to-repay requirements will be eligible for a “qualified mortgage” (QM).
QM loans must meet at least some of the following guidelines: They cannot contain risky features, such as terms that exceed 30 years or interest-only payments; carry more than 3 percent in upfront points and fees for loans above $100,000; or push a borrowers’ total debt above 43 percent of their monthly income unless the loan qualifies to be backed by Fannie Mae, Freddie Mac, the Federal Housing Administration, or a small lender.
One the bright side, the CFPB estimates that 92 percent of mortgages currently meet QM requirements.
Also, lenders can still issue loans outside the QM guidelines, although they have less protection against future lawsuits from non-QM borrowers.
Mortgage rates and rule changes have made plenty of headlines in recent months, as the gradual rise in rates in 2013, together with proposed rule changes by Fannie Mae and Freddie Mac, promises to reshape our real estate markets in 2014. Meanwhile, the CFPB is pursuing another mortgage-related initiative: asking for help identifying the most confusing elements of mortgage closings.
Homebuyers confused by the changing state of mortgages today can get answers to their questions from qualified real estate and mortgage professionals, including experts at Pacific Union’s mortgage partner, Mortgage Services Professionals.
“We knew these qualified mortgage rules were coming, and we took a proactive stance,” says Jonathan Pass, president of Mortgage Services Professionals. ”We secured both QM and non-QM investors, so we can service all our clients’ needs.”
For a private consultation, or help with securing a mortgage, give Mortgage Services Professionals a call at 925-743-3525.
Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:
CALIFORNIA HOME-PRICE APPRECIATION SECOND HIGHEST IN U.S.
Home prices in the Golden State showed the second largest year-over-year gains in the county in November, according to CoreLogic’s recently released Home Price Index.
California home prices, including distressed sales, increased 21.3 percent from November 2012 to November 2013, trailing only Nevada. Not including distressed sales, home prices in the state grew 17.6 percent in that time period, also No. 2 in the country.
Nationally, home price growth was more modest, with year-over-year gains of 11.8 percent including distressed sales and 10.4 percent excluding them. According to CoreLogic, November marked the 21st straight month of yearly home price increases.
The company predicts that 2013 will be the healthiest year for appreciation since 2005.
SAN FRANCISCO INVENTORY AMONG NATION’S SLIMMEST
In news that will come as little surprise for home shoppers in property-starved San Francisco, inventory in the city took one of the biggest drops in the nation at the end of last year.
According to figures collected by Movoto, San Francisco inventory plummeted 17.3 percent from December 2012 to December 2013, the third largest decline in the U.S. At the same time, inventory just across the bay in Oakland increased by about the same figure: 19.1 percent.
Movoto also aggregated data regarding price-per-square-foot gains and losses. Across the country, prices per square foot increased 10.4 percent over the past year. Locally, prices per square foot grew by 12 percent in Oakland and 10.2 percent in San Francisco.
DECEMBER HOMEBUYER DEMAND FALLS MORE SHARPLY THAN LAST YEAR
As early-winter temperatures began to drop across the nation, a recent study shows that homebuyer demand followed suit.
Redfin reports that offers from its customers declined 20.2 percent from November to December, 3.5 percent more than they did during the same time period in 2012. The company speculates that a combination of inventory shortage and rising mortgage rates were the key factors driving 2013’s demand shrinkage.
“Now, with mortgage rates rising, they (buyers) are increasingly concerned about their budget,” Redfin real estate professional Wayne Olson said. “They’re also nervous about facing stiff competition in the coming months as more buyers enter the market.”
SOUTH BEACH CONDO MOST EXPENSIVE PER SQUARE FOOT IN SAN FRANCISCO
As we recently reported, San Francisco’s skyline is heading up in the form of high-rise condos, of which buyers cannot seem to get enough. The exceptional demand is also driving prices north, so much so that a South Beach condo boasted the heftiest price per square foot in the city over the past 12 months.
At some point last year, a two-bedroom, 1,600-square foot condo in the Millennium Tower sold for $4.5 million, according to SFGate. That translates to $2,500 per square foot, the highest recorded in San Francisco in the past year.
The priciest total sale in the city was $18 million, which netted the buyer a six-bedroom, 9,000-square-foot mansion in the tony Presidio Heights neighborhood.