Tag Archives: prices

Luxury Homes Foreclosure Trend

Luxury Homes Foreclosure Trend

Luxury Homes Foreclosure Trend

Luxury homes continue to foreclose at a record rate.

Even though pundits say that the economy continues to gain more traction and that the worst of the real estate crisis may be over, distressed properties continue to pop up in the Bay Area.

Inventory continues to be in short supply and experts say that we have 4-5 years (we’ve heard up to 10-12 years) left of REOs coming on the market. Unlike the past years, the upcoming REOs tend to skew toward the high end. Homes valued in the $1.5 million-plus range continue to climb in the foreclosure scene. For a couple of examples, a $2.5 million home recently foreclosed in Cow Hollow and likewise for a $1.8 million home in Hillsborough.

Folks over at RealtyTrac state that foreclosure activity on homes in the $5 million-plus value range jumped 61 percent from the same time period in 2012. During the real estate meltdown, high end homes certainly did see their share of REO casualties but banks often held off foreclosing because of the high losses. Instead the banks worked toward loan modifications, forbearances and short sales.

Now with values on the rise, many luxury homes have fallen into the foreclosure track. In the past, banks often hesitated at foreclosing due to possible high losses. Now, banks may take more chances to foreclose on the high ticket homes. With increased profits, banks with defaulting loans seem more willing to roll the dice on the luxury inventory. Such actions may end up signifying snake eyes for distressed high end homeowners.

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Filed under Banks, California, Foreclosure, Loan Modifications, short sales

HARP 3.0 Fixes On The Way?

HARP 3.0 Fixes On The Way?

HARP 3.0 Fixes On The Way?

Federal Reserve Bank Of New York Report Suggests Two Tweaks To HARP

The old saying goes “If isn’t broken, don’t fix it.” We all know that that saying would almost never apply to a government program and that goes for the HARP program.

Although HARP 2.0 marked a significant improvement over its predecessor it still contains many holes that don’t allow homeowners to take advantage. The surging prices here in San Francisco and much of the Bay Area have reduced the number of underwater homeowners, however many distressed homeowners still exist and they can’t qualify for HARP 2.0.

A recent report from the Federal Reserve Bank of New York stated that if two tweaks were made to the Home Affordable Refinance Program (HARP), refinancing activity could increase “substantially.”

Although underwater homes have decreased significantly here in the Bay Area, Lender Processing Services estimate that about 7.3 million loans nationwide remain underwater.

Two Tweaks Include Removing Cutoff Dates and Allowing Refinance More Than Once

One of the tweaks that have been suggested would be to remove the cutoff date that limits eligibility to Fannie Mae and Freddie Mac loans that were obtained by June 1, 2009. The second change would be to allow borrowers to refinance under the program more than once.

The New York Fed report states that by eliminating the cutoff date entirely the number of borrowers who would be “in the money” would increase to more than 530,000, up about 30 percent. Those “in the money” borrowers are those who could recoup the costs of refinancing within three years based on the savings from HARP.

Under current guidelines, the report authors estimate there around 1.5 million borrowers exist who would be eligible for HARP and in-the-money.

Additionally, removing the rule that limits borrowers to just one HARP refinance would increase by over 55 percent.

If the banks and government keep tinkering with HARP 3.0 then maybe they will get it right.

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Filed under Banks, Mortgages, San Francisco

Golden State Leads Nation in Property Appreciation in Veros 12-Month Real Estate Forecast

Golden State Leads Nation in Property Appreciation in Veros 12-Month Real Estate Forecast

Golden State Leads Nation in Property Appreciation in Veros 12-Month Real Estate Forecast

San Francisco Hits #1 Position With An Expected 12.7% Increase

With most of the Bay Area real estate market in overdrive, we don’t find it so surprising that San Francisco and other metro areas in California are poised for the country’s strongest levels of appreciation in the coming year.

Guess what area will gain the most appreciation in the next year? Give yourself a Kewpie doll if you guessed San Francisco. The gaining numbers come via Veros Real Estate Solutions who specialize in predictive analytics. They recently announced that the top three positions now have double-digit forecast appreciation, with the re-emergence of California markets taking over three of the top spots.

Projected Five Strongest Markets*

  1. San Francisco-Oakland-Fremont, CA +12.7%
  2. Los Angeles-Long Beach-Santa Ana, CA +11.6%
  3. San Jose-Sunnyvale-Santa Clara, CA +11.1%

*Markets demonstrated are for residential real estate in major metro areas (typically greater than 250,000 residents) among single-family homes in the median price tier.

San Francisco Has Low Inventory, Good Affordability Levels, Relatively Low Unemployment

The numbers can be attributed to the San Francisco housing shortage, with supply down nearly 80% from its peak in 2008. Although prices still maintain relatively high price tags compared with much of the U.S., affordability sits at 2004 levels. The low supply, historically good affordability, relatively low unemployment of 6.7% (compared to the 7.5% national unemployment rate) and continued low interest rates continue to propel the SF Bay Area market to the #1 spot with 12.7% appreciation forecast.

Similarly, the Los Angeles and San Jose market upswings can be seen due to significantly reduced housing supply, down more than 70% and 75% respectively from their peaks. In Los Angeles, affordability returned to levels not seen in more than a decade and the low unemployment rate in San Jose position these markets in the #2 (+11.6%) and #3 (+11.1%) spots respectively.

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Filed under California, San Francisco, San Jose

Have We Reached Real Estate Tipping Point Here in the San Francisco Bay Area?

Have We Reached Real Estate Tipping Point Here in the San Francisco Bay Area?

Have We Reached Real Estate Tipping Point Here in the San Francisco Bay Area?

San Francisco Home Prices Overvalued By Two Percent and San Jose By Three Percent

For those who have read Malcolm Gladwell’s “The Tipping Point” in which he defines a tipping point as “the moment of critical mass, the threshold, the boiling point” it seems that for real estate prices here in the Bay Area the Tipping Point may be happening now.

We’ve seen a few economists  (like one from Trulia) who state that prices are overvalued in the California cities such as San Jose (+3%), and San Francisco (+2%). The speculation rises much like the San Francisco home prices which remain the highest in the country. What causes this “irrational exuberance”? Is it investors and flippers or is the rise in prices due to solid job growth, start-up IPOs, high incomes, and limited local housing supply?

Multiple Offers Still Common But In Fewer Waves

Whatever the cause, Bay Area real estate may have hit a peak. In the past few months we’ve seen listing agents report that it has been commonplace to have offers escalated $100,000-plus over asking price. Consider that these offers have risen more than $50,000-$75,000 over fair market value or apprised value. However, those offers used to come in waves of 15-20 offers, now they come in at 6-8 offers.

Areas such as Fremont and across the bay in San Mateo have seen offer prices hold but the overall number of offers appears to be declining. What is the cause for this drop? We see more inventory, some buyers becoming frustrated and dropping out of the buying process, for other buyers the loan process remains taxing which causes them to bow out, and of course affordability. Make no mistake, in most Bay Area regions the pendulum still sits in the sellers’ corner but with each passing day it inches slightly back toward the middle of the scale.

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Filed under California, San Francisco, San Jose

What Are Bay Area Home Sellers Waiting For?

What Are Bay Area Home Sellers Waiting For?

What Are Bay Area Home Sellers Waiting For?

Record Low Inventory Still Has Many Homeowners On The Sidelines

With housing inventory sitting at record lows, both buyers and sellers have different feeling and concerns about the current Bay Area real estate market. Many buyers and sellers continue to be concerned, frustrated and perplexed by the current situation. Meanwhile many would be sellers still linger on the sidelines fearing that they will not be able to find a replacement home once they sell.

The overall predicament can be viewed as a classic Catch-22. Some potential sellers will not put their home on the market fearing that they will not be able to purchase

What Are Bay Area Home Sellers Waiting For?

What Are Bay Area Home Sellers Waiting For?

in a reasonable amount of time. Sure they can demand a seller’s contingency to find a home but that limits the desirability of a home. If a seller wishes to move to some Caribbean nation, Mexico or even Las Vegas then they will have no problem locating a replacement home.

How Have Buyers Altered Their Buying Strategy?

Buyers, on the other hand, have a much more challenging task. The task has been so daunting for some that they have given up their search. Redfin offered up some interesting statistics for buyers in (or not in) the current market. Some buyers have shifted their goals in response to the low inventory to look in other areas, other are willing to pay more while some have taken a break.

Don’t expect the low inventory to last forever. Eventually banks will release some additional REOs and things will loosen up.

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Filed under California, San Francisco, San Jose, San Mateo county

Where Is The Real Estate Inventory In The San Francisco Bay Area?

Where Is The Real Estate Inventory In The San Francisco Bay Area?

Where Is The Real Estate Inventory In The San Francisco Bay Area?

Who stole my Inventory? 50% Drop In Some Areas

In many parts of San Francisco and the rest of the Bay Area real estate inventory levels sit at one to two  month levels which has caused  feeding frenzy for home starved shoppers.

Things have become so bad that developers now rush to get their condos, single family homes and town homes everywhere from San Mateo to Upper Market. We took some numbers from Redfin that showed 2013 inventory figures for San Francisco and San Jose at 50% compared to one year ago. (See accompany chart)

Many people continue to speculate about the reasons for the low inventory such as a lack of new construction and investors snatching all of the rental properties.

Four Reasons For The Inventory Shortage

Here we offer a few reasons:

1-     Owners with short memories think their home will escalate in value like the number in 2005-2006, so they continue to hold onto their property even they wish to sell it. Many sellers seek to wait for the virtual peak before they sell their property. Don’t hold your breadth.

2-     With the new California Homeowners Bill of Rights taking effect, bank are nervous (or at least reticent) to move forth with the foreclosures without making absolutely sure that they have not made some error that could result in a lawsuit.

3-     Even with the recent surge in prices many homes continue to sit underwater so homeowners seem hesitant to jump ship with a short sale. Some of these homeowners might reconsider as they have until the end of the year to take advantage of the one year extension of the Mortgage Debt Forgiveness Relief Act.

4-     Many “move-up” or “scale-down” homeowners who do wish to sell have reservations because although they would have no problem selling their home, they may encounter difficulty buying their replacement home.

Things will most likely not remain this way for all of 2013. Eventually the banks will release additional REOs and interest rates will tick up which will impact the market. It should be an interesting ride here in San Francisco and the rest of the Bay Area.

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Filed under California, San Francisco, San Mateo county

San Mateo Single Family Median Home Prices Jump 20 Percent In One Year

San Mateo Single Family Median Home Prices Jump 20 Percent In OneYear

San Mateo Single Family Median Home Prices Jump 20 Percent In One Year

Santa Clara County Single Family Median Home Prices Jump Even Higher – 35 Percent In One Year

Most people attribute the phrase “What goes up must come down” to Isaac Newton. In the real estate market here in the San Francisco, San Jose and Peninsula areas that saying could be flip flopped, turned sideways and spun around and what would that mean to homeowners or possible home sellers?

Some Bay Area home sellers continue to take advantage of the low inventory and rising sale prices. Consider these key figures comparing the single family homes sales from January 2012 to January 2013

In January 2012 the Median Price for a San Mateo County single family home was $580,000 while January 2013 saw that number rise to $695,000 – that marks a 20% increase.

In January 2012 the Median Price for a Santa Clara County single family home sat at  $490,000 while January 2013 saw the median price dramatically jump to $660,000 – that signifies a whopping 35% increase.

Those numbers get even more startling if you look at the condo/townhouse prices.

In January 2012 the Median Price for a San Mateo County condo/townhouse registered $318,000 while January 2013 saw that median price leap to $415,000 – that marks a 31% increase.

In Santa Clara County for January 2012 the Median Price condo/townhouse was $273,000 while January 2013 saw the median price dramatically jump to $425,000 – an incredible 56% jump.

Either people have short memories or they just don’t wish to think about what happened from 2004-2006 when prices shot up at ludicrous speed.

Sure, we take into consideration that prices did tumble a significant amount when the bubble burst but these dramatic price gains may have buyers and homeowners asking some questions.

Buyers continue to ask, “How high over listing price should I offer?”

For homeowners who are thinking about selling or maybe just sticking their toes in the water by trying to sell as a FSBO they might be doing themselves an injustice. Does everyone think that the startling price gains will continue? Will the numbers slow down? Will they flatten or maybe even tumble again?

For a homeowner it comes down to motivation and realism. A homeowner might ask “Do I have to sell or do I want to sell?” If a homeowner would like to take advantage of these price gains then it might be time to jump in the market. Like stock investors too many people make the mistake of trying to “time” the market and sell at the apex. We might not be at the apex but the recent price gains look like we might be pretty close.

For a view of other Bay Area counties and statistics click on the link below

http://2.bp.blogspot.com/-bgQlfMzykBM/USoRFl6wZvI/AAAAAAAAAcw/YC25A1EYacE/s1600/Data+Sale+2.png

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Filed under California, San Francisco, San Jose, San Mateo county