New report shows rents falling in San Jose and San Francisco

Falling rents? What a concept — especially in the Bay Area, ground zero for out-of-sight rent increases over the past few years.

Yet a new study indicates the trend could be changing. Abodo, an apartment search website, says monthly rents dropped markedly from August to September in San Jose and San Francisco. Those cities were on Abodo’s Top 10 list for the “Biggest Fall” in rents for one-bedroom apartments during that period.

The website’s National Apartment Report for September shows the average monthly rent for a one-bedroom apartment in San Jose dropping from $2,790 to $2,455, a 12 percent decline — and the second-largest decrease among U.S. cities. A one-bedroom in San Francisco fell 6 percent, from $3,952 to $3,698, the seventh-largest decline.

Of course, Abodo’s findings for a single month must be taken in context — as one piece of a continually unfolding picture. Still, the website’s numbers fit a pattern: Over the last year, a variety of organizations and experts have said the pace of rent hikes is slowing in much of the Bay Area, and perhaps is flattening.

Some observers are emphatic: “The prices have reached their saturation point,” said Ron Stern, CEO of Bay Rentals, a housing relocation service. “Tenants cannot be soaked for one extra dollar.”

Particularly in Santa Clara County, he said, “the rental market has slowed down to almost a crawl. We do a lot of credit reports, and the number of reports we’re doing has declined. … Landlords say, ‘Is my price too high? I’m not getting any calls.’ ”

The cooling apparently has yet to reach Oakland. From August to September, according to Abodo, rents climbed from $2,254 to $2,299, a 2 percent increase — the nation’s 23rd-largest increase in rent price.

The notion that Oakland rents still are playing catch-up with the Peninsula and San Francisco was also born out by data reported in July by Novato-based RealFacts. Its second-quarter report showed Oakland rents rising a hefty 5.4 percent on a year-over-year basis. Still, that was down from 7.2 percent and 13.7 percent increases, respectively, in the previous two quarters.

Across the Bay Area, the years-long run-up has put the squeeze on typical income earners, who easily can spend half of their pretax wages on rent.

“While incomes have gone up dramatically, rents also have gone up to the point where we’ve reached an equilibrium,” said Jeffrey M. Mishkin, regional manager at the San Francisco office of Marcus & Millichap, a real estate brokerage firm. For much of the region, rents “either can’t or don’t need to go up anymore.”

From August 2015 to August 2016, he said, San Francisco’s rental market “was flat.” “One-bedrooms were down 7.7 percent year-over-year, from $3,395 to $3,150. Two-bedrooms were down from $4,500 to $4,300, a 4.7 percent drop.”

Plus, he just had received an informal report about a “very large owner” of apartments on the Peninsula “who said that rents are down on every one of his properties.”

And yes, Oakland rents have continued to rise as the city attracts young professionals looking for some affordability and easy access to jobs across the bay. Even so, Mishkin said, East Bay brokers sense a slowdown: “The smaller units are renting quickly. The larger, more expensive units are taking longer.”

Stern advised apartment hunters to look in smaller apartment developments, rather than the larger — and often more expensive — complexes.

“You can get a nice place for $1,600 or $1,700, maybe less,” he said. “There’s a nice duplex in Campbell for $1,850 in a good neighborhood. The landlord says, ‘I don’t want to squeeze it for an extra 200 bucks. I just want to get it rented.’”

“Landlords beware,” he warned. “People are shopping price, not quality, right now.”

If so, Abodo’s future reports could show continuing declines. It based its September findings for San Jose, San Francisco and Oakland on a sampling of 6,701 properties, according to Sam Radbil, the website’s spokesperson.

At a glance

Here are a few other highlights of the report:

• Miami led the nation for the biggest rise in rent for one-bedroom apartments: a 9 percent increase, from $1,599 to $1,739.
• Seattle scored the largest fall in rent: 13 percent, from $2,170 to $1,890.
• Three California cities made the Top 10 for “Biggest Rise”: Bakersfield, up 9 percent; Fresno, up 6 percent; Riverside, also up 6 percent.
• And four California cities made the Top 10 for “Biggest Fall”: In addition to San Jose and San Francisco, they are Los Angeles, down 8 percent, and Long Beach, down 7 percent.

Source: San Jose Mercury News, Richard Scheinin
http://www.mercurynews.com/2016/09/25/new-report-shows-rents-falling-in-san-jose-and-san-francisco/

Silicon Valley homeownership: Pretty much forget it, if you’re a millennial

My advice to young people in the valley is that home ownership is still possible but they need to start saving early, go to college and then get that good paying tech job, of which there are plenty. Granted, buying their first home is not as easy for millennials as it was in my parents day, but IT IS STILL DOABLE! Also, keep in mind that it is still a hot market right now in the silicon valley, a real estate market that won't stay hot forever at which time prices will go down. 


Surprise, surprise.

Young people can’t afford to buy homes in Silicon Valley.

The folks at Earnest – the San Francisco-based lender – report that millennials in the San Francisco and San Jose metropolitan areas have the lowest rates of homeownership in the nation: 6 percent and 7 percent, respectively. The Los Angeles and New York metros follow at 8 percent in the analysis, based on data from Earnest’s loan applicants.

Compare those dreary numbers with other metros where millennials (ages 18-35) are faring better: Miami (where 16 percent own homes), Seattle (17 percent), Houston (27 percent), Salt Lake City (32 percent) and St. Louis (35 percent).

“The high cost of homeownership is delaying buying among those aged 25-35, the years when home buying accelerates,” Earnest tells us. The dismal San Francisco and San Jose ownership rates stand in contrast to another set of numbers: “These job hubs also have the highest median incomes in Earnest’s data-set for this age range: $81,000 in San Francisco and $86,000 in San Jose, as compared with $56,000 across the U.S. overall.”

To complete the picture, the analysis looked at the age threshold in each metro when 25 percent own their own home. Topping the list is San Jose, where it’s not until age 42.5 that 25 percent own homes; the metro (which includes Santa Clara and San Benito counties) also has the highest median home cost, $958,000, according to the Zillow Home Value Index. In San Francisco, 25 percent own homes by age 42, while the median home cost is $812,000. (The San Francisco metro includes San Francisco, San Mateo, Contra Costa, Alameda and Marin counties.)

You can look at various charts and read Earnest’s report here.

Sorry, but if you live in California, you just won’t feel encouraged by this national analysis: “Los Angeles, San Diego, Sacramento, and Riverside are also among the 15 least affordable metros, both by highest median home costs and by highest age when 25 percent own.”

Source: Silicon Beat, Richard Scheinin
http://www.siliconbeat.com/2016/08/29/silicon-valley-homeownership-pretty-much-forget-youre-millennial/

Record high prices for Bay Area homes in April

Record highs, once again.

The median price paid for Bay Area homes -- single family, condominiums and townhouses -- hit a new peak for the nine-county region in April: $686,000, surpassing the prior peak of $665,000 set in June and July of 2007.

The new regional high -- up 5.5 percent from March 2016 and up 4 percent from the year before -- was only part of the story. According to CoreLogic, the real estate information service, Santa Clara, Alameda and San Francisco counties also set record sale prices: $860,500 in Santa Clara (up 3.7 percent from March 2016), $685,500 in Alameda (up 6.7 percent) and $1,300,000 in San Francisco (up 13 percent).

The $520,000 median price in Contra Costa County was up 3.2 percent month-over-month, while San Mateo County's $990,000 median represented a 5 percent month-over-month boost.

Across the nine counties, 7,518 homes were sold in April, up 7.7 percent from March, but down 7.3 percent from the year before. April's year-over-year decline in sales was just the second time in the last 12 months that sales have fallen on a year-over-year basis.

"It's no surprise that in a month when the San Francisco Bay Area's median home sale price hit a record high the region also logged a year-over-year decline in sales, which remained well below the long-term average," said Andrew LePage, research analyst for CoreLogic, which has charted the numbers since 1988. "Low mortgage rates, job growth and other drivers have stoked demand, but the supply of homes for sale -- especially in the low-to-middle price ranges -- hasn't kept pace, leaving many would-be buyers struggling with a thin and increasingly expensive inventory."

Source: San Jose Mercury News, Richard Scheinin
http://www.mercurynews.com/portlet/article/html/fragments/print_article.jsp?articleId=29908398&siteId=568

This billboard says everything you need to know about absurdity of San Francisco real estate

I think we're gonna need one of these billboards here in the Silicon Valley soon.



This billboard says everything you need to know about absurdity of San Francisco real estate

U.S. Real Estate to Draw More Foreigners in 2016, Survey Says

Foreign investment is very important here in the Silicon Valley, but apparently it is very important for a number of other top real estate markets here in the U.S. Foreign buyers view American real estate a safe investment compared to other investments and the article cites San Francisco, a city just 50 miles north of the silicon valley as one of the top cities for outside investment.


Most foreign investors expect to put more money into U.S. property this year than they did in 2015, with New York remaining the top target market worldwide, according to a survey by the Association of Foreign Investors in Real Estate.

Sixty-four percent of respondents said they intend to make modest or major increases to investments in U.S. real estate this year, while 31 percent expect to maintain their holdings or reinvest sales proceeds into other U.S. assets, according to the 24th annual survey by the group, known as AFIRE. None of the respondents plans a major decrease. About half of the group’s roughly 200 members participated in the survey.

“This is a very strong response,” Jim Fetgatter, chief executive of Washington-based AFIRE, whose members hold about $2 trillion of real estate globally, said in a phone interview. China’s economic slowdown, Brazil’s recession and Europe’s immigration crisis underscored for international investors that “the U.S., at the moment, really is the safest place for them to go.”

Foreign purchases of U.S. real estate have soared since the financial crisis, jumping to $87.3 billion of completed deals last year, from less than $5 billion in 2009, according to Real Capital Analytics Inc. Investors from Canada, Asia, Europe and Australia bought stakes in office towers, warehouses, apartment buildings, shopping malls and hotels in search of relatively higher yields. Manhattan captured $23.5 billion, or 27 percent, of 2015 purchases, Real Capital data show.

The U.S. also ranked first for countries with the best opportunity for price appreciation in 2016, followed by Brazil, Spain, Ireland and the U.K., the AFIRE survey showed.

Top Cities

London and Los Angeles were the second- and third-most-popular cities for real estate investments in the survey. Berlin climbed three places to No. 4, the first year a German city reached the top five. Paris tied with San Francisco for fifth place, according to AFIRE.

Within the U.S., multifamily and industrial real estate were the favorite property types for a second year, while retail moved up to third place from fourth. Offices fell to fourth from third, and hotels stayed at No. 5, according to the survey.

The recent passage of legislation easing taxes for foreign pension funds that buy U.S. real estate probably will boost investment further, Fetgatter said. Many cross-border investors previously bought U.S. properties with domestic majority partners.

The new law “simplifies the investment process and opens up a lot of opportunities for structuring their deals in a different way,” he said.

Source: Bloomberg Business, Hui-Young Yu
http://www.bloomberg.com/news/articles/2016-01-04/u-s-real-estate-to-draw-more-foreigners-in-2016-survey-says

Tiny cottage on what may be smallest plot of land in San Francisco goes on sale for whopping $599,000

This article, I hate to say, is very indicative of the white hot real estate market here in the San Francisco Bay area. It does't mean there's no good value properties out there and there's no hope for first time home buyers on a budget because the market won't stay this way forever.

• The 830-square-foot two-level cottage has just gone on the market
• It has two levels and the two bedrooms are the size of large closets
• The home may have the smallest lot in San Francisco', according to the agent
• Despite its diminutive size, its price-tag is a whooping $599,000
• Realtor says that she's already had 300 viewers

A single-family home in San Francisco that stands on the 'city's smallest lot' has hit the market for a whopping $599,000.

The tech hub regularly tops the list of the most expensive cities to live in, and the expensive 830-square-foot cottage - as large as most one-bedroom apartments - proves the area is not becoming cheaper any time soon.

The 1916 two-bedroom, two-floor white cottage at 544 46th avenue in coveted Sutro Heights stands on a small 644-square-foot plot of land, with a neighbor crowding in on one side.

'There's such a backup of buyers in the $600,000 to $750,000 price range...like thousands and thousands of people who want to buy a place in San Francisco,' she told SF Gate.

'Most people in this price range are lucky if they're going to get a one-bedroom condo with monthly dues. This is a single standalone with no HOA dues. It's an affordable price point that's hard to come by.'

The cottage was once owned by silver baron and city mayor Adolph Sutro, and Stolz thinks it was once used as a workshop.

Those who can overlook the confined space will enjoy the updated open kitchen with stainless steel appliances, granite countertops, chef's island and large, airy windows.

There's also a cute little porch with a view of the surrounding hills and the home is two blocks from Sutro Park.

Stolz says most prospective buyers are couples, single people, or artists looking for work space.

The lucky seller has owned the home for 13 years and moved to (much cheaper) Oregon.

The house is actually not a bad deal for the area - it is $722 per square foot, below the average price in San Francisco of $947, according to Trulia.

In September, an Outer Mission dilapidated 765-sq foot lean-to that would need to be completely torn down and renovated sold for $408,000 - $58,000 more than asking price.

Stolz says she is accepting offers starting on Friday.

Source: Daily Mail, Kiri Blakeley
http://www.dailymail.co.uk/news/article-3353206/Tiny-830-square-foot-cottage-SMALLEST-plot-land-San-Francisco-goes-hits-market-599-000.html

These Are the 20 Richest Cities in America

This article is really no huge surprise to me. San Jose is the heart of the Silicon Valley and allot of tech giants reside in or around the San Jose area. According to this article from Bloomberg Business, San Jose is the #1 wealthiest city in America! No wonder why rents are high and the housing market is still hot. It just goes to show another good reason to own real estate here.

San Jose, San Francisco, Seattle: These cities house more than the headquarters of the world's largest technology companies. They are also some of the most productive hubs in the U.S. economy.

The San Jose, California metro area had the highest output per resident for 2014, according to a Bloomberg analysis of U.S. Bureau of Economic Analysis data for the 100 largest metropolitan areas. Gross metropolitan product (GMP) per capita in the Silicon Valley epicenter was $105,482, more than double the national average. Bridgeport, Connecticut ranked second at $94,349. San Francisco, Seattle and Boston followed.


These GMP per capita figures help uncover underlying economic trends, which are often masked by the population inflows and outflows that affect unadjusted output statistics. The 2014 rankings highlight a surge in tech centers since the recession, with San Jose now producing about $11,000 more per person than No. 2 Bridgeport. Until 2011, the Connecticut suburb for New York bankers held the top spot.

It's no surprise that these high-output cities also have some of the densest concentrations of educated workers, reflecting the soaring returns to schooling in today's job market. Harvard University professor Edward Glaeser says the diverging fates of high-skilled and low-skilled regions has been one of the most significant trends in the U.S. economy as well as other developed economies over the last three decades.

There's an ''ongoing trend towards skilled places being far more compensated than non-skilled places," said Glaeser, whose research focuses on what causes cities to grow.  "The poster-child of this in the data is the San Jose metropolitan area, which is off the charts in terms of income growth.''

Tech cities outside the Bay Area have also benefited from the industry's boom. Helped by not only Amazon Inc. but also newer Internet companies like Zulily Inc., Seattle's GMP per capita grew by a cumulative 7.9 percent since 2009, when the economic recovery began. (The cumulative growth since 2008 is a much more tempered 2.5 percent because of the dramatic drop in the financial crisis.) That helped the Washington city catapult to No. 4 from its No. 6 spot in 2008 through 2011. Biotech hotbed Boston also jumped two places since 2008, while Portland, Oregon (sometimes called Silicon Forest) climbed six spots.

These emerging tech hubs will probably expand even more in coming years, according to Luis Torres, a research economist specializing in regional economies at the Texas A&M Real Estate Center. Sky-high rents in northern California force workers and businesses to look elsewhere, Torres said.

Methodology: Bloomberg ranked the 100 biggest metropolitan statistical areas (MSA) in the U.S. according to their gross metropolitan product per resident from 2008 to 2014, calculated with data from the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. Data for 2014 were advance statistics and subject to future revision. Previous years' data were revised from previous releases. The map above only displays the primary city in each MSA.

Source: Bloomberg Business, Ali Donaldson
http://www.bloomberg.com/news/articles/2015-11-05/these-are-the-20-richest-cities-in-america

The Attainable American Dream? Not in These Major Tech Hubs

Technology jobs mean booming housing markets in Denver, San Francisco, San Jose and Seattle, as young people flock there looking for high-paying jobs. But what’s great for the economy may not be so good for want-to-be homeowners.

According to the Zillow Housing Confidence Index (ZHCI), residents of these cities are feeling less optimistic about the housing market, with more people saying now is a bad time to buy than just six months ago.

Of the tech hubs in the survey, Denver had the biggest drop in people who said now is a good time to buy a home: just 46 percent in July, down from 54 percent when surveyed back in January.

San Jose had the next biggest drop with 36 percent saying now is a good time to buy, compared to the 43 percent surveyed six months ago. Seattle went down from 57 percent to 51 percent, and San Francisco went down from 45 percent to 40 percent.

“Growth in well-paying tech jobs is undoubtedly helping fuel some of the very rapid home value growth in these markets, along with low inventory and high demand,” said Zillow Chief Economist Svenja Gudell. “This rapid growth can mean different things to different groups. Renters planning to buy may be turned off by rapidly growing home values, bidding wars and a highly competitive housing landscape. Many renters may need to lengthen their timelines as they take longer to save for a down payment.

“Other long-time residents may be pushed out of these cities as the cost of housing rises too far, too fast,” Gudell continued. “But for current homeowners, rapid home value appreciation means substantial gains in equity. And some sellers may decide to capitalize on recent gains in home values and list their home for sale, boosting inventory.”

With home values continually on the rise in these cities, young people are less certain they’ll be able to afford a home of their own. In January, 18 percent of 18- to 34-year-old renters in San Francisco planned to buy within a year. Now, that number has dropped significantly to just 8 percent. Similar patterns hold true among young people in Seattle, San Jose and Denver.

For more information about Zillow’s survey and housing data, check out Zillow Research.

Source: Zillow Blog, Jordyn Lee
http://www.zillow.com/blog/home-buyers-major-tech-hubs-183208/

Happy Friday everyone!!!

Happy Friday everyone!

I had a great time meeting Justin Fichelson with Million Dollar Listing San Francisco the other day at Casino Ma8trix in San Jose for a mixer event with some of my Women's Council of Realtors colleagues. What a great agent! What a great guy!

San Jose #1 with Highest Share of Equity!

I hope everyone is having a great Monday, and for those of you living in the Bay Area, particularly the Silicon Valley, your Monday may even be better. 

A new report from RealtyTrac shows the top cities in the country with the greatest equity growth, and the top two of those are right here in the bay area - San Jose at #1 and San Francisco at #2. If you're a homeowner in one of these two cities, you could be potentially sitting on a fortune! Depending on your situation and needs, it may be a great time to sell so you can take advantage of all that money you're sitting on because who knows what tomorrow may bring because next year the or the year after the market could take a hit and all that equity could possibly get wiped out - though not likely in my opinion.


Picture Souce: Washington Post


9 Markets With the Highest Share of Equity

As home prices rise, more home owners in some parts of the country are seeing gains in equity.

Read more: Many Owners May Underestimate Their Equity

Nearly 20 percent of all properties with a mortgage are considered "equity rich," according to RealtyTrac's second quarter U.S. Home Equity & Underwater Report. The number of equity-rich home owners with a mortgage has risen by 1 million compared to a year ago.

"Some are leveraging that equity into a higher LTV refinance or a move-up purchase, some may be downsizing into an all-cash purchase and some may be cashing out of home ownership altogether," says Daren Blomquist, RealtyTrac's vice president.

Not surprisingly, the highest equity places tend to be in areas that have seen the largest increases in home prices. RealtyTrac reported the following major metro areas had the highest percentage of equity-rich properties:

1.San Jose, Calif.: 43.8%
2.San Francisco, Calif.: 38.3%
3.Honolulu, Hawaii: 36.7%
4.Los Angeles, Calif.: 32%
5.New York: 30.7%
6.Pittsburgh, Pa.: 29.4%
7.Poughkeepsie, N.Y.: 28%
8.Oxnard, Calif.: 27.5%
9.San Diego, Calif.: 26.9%

Source: RealtyTrac & RealtorMag Online
http://realtormag.realtor.org/daily-news/2015/08/10/9-markets-highest-share-equity?om_rid=AAFmZk&om_mid=_BVyPS5B9EV6E3L&om_ntype=RMODaily

San Francisco among the highest rents in the country

This article doesn't surprise me. It's a well know fact of life for people living in San Francisco that rent is through the roof and there doesn't appear to be any relief in sight. And the Silicon Valley where I live and work as a Realtor is no better. San Jose, the largest and most populous city in this valley, has one of the highest rents in the country. 

It's a not so great time to be a renter, but a awesome time to be a landlord/multifamily property owner.


Picture source: Trulia

Study Shows San Francisco Housing Rents Are Fastest-Growing Among Metro Areas in Country

The national multifamily rent average continues to break records, and San Francisco stands out as the fastest-growing city in 2015.

Rent prices in San Francisco reported an 11.6 percent year-over-year growth, according to a June report by Yardi Matrix, a unit of Santa Barbara-based real estate software vendor Yardi, which came in third behind Portland and Denver.

As of April, the company recorded a 2.8 percent year-over-year job growth in San Francisco. During this time, Yardi also recorded a similar growth in housing units, as a percent of total available stock. However, the company’s 11.1 percent forecast rent growth in the city was exceeded by an actual, 6-month growth of nearly 12 percent.
“What’s happened is San Francisco has undergone a sort of resurgence of urban living that’s much different than [it was] historically,” said Jack Kern, director of research and publications at Yardi. “I’m not surprised it exceeds what it’s anticipating.”

With Silicon Valley’s rent situation not much more forgiving, many major office campuses are relocating back into urban areas, Kern said. High-profile tech companies such as Google and LinkedIn have moved some of their campuses to downtown San Francisco and have reaped increases in employment numbers. The resulting influx of often-younger employees, hungry for the technology, business and research-and-development treasure trove in San Francisco, has changed the housing market quite a bit.

“Companies are very good with [knowing] what kinds of jobs work out with recruiting certain employees in urban and suburban areas,” Kern said. “It reflects in where companies move opportunities.”

As companies move into the second half of the year, growth will surge even more dramatically, Kern predicted. That’s because as business proves itself successful early on, as it has, companies are more inclined to increase hiring in the area. Kern said this will snowball into increased demand for apartments, higher occupancy rates and higher activity in retail and nightlife.

Kern lauded San Francisco’s success in promoting livability as a major city. Its current “urban renaissance,” he said, includes sustainable development as well as even a somewhat suburban quality of life, offering local employees amenities such as a nearby gym or grocery. The result is a job-heavy area that allows workers to live in a safe, environmentally conscious neighborhood within reasonable distance of their office, he said.

Incidentally, San Francisco’s rising rent growth is converging among all asset classes —renters by choice, who can afford to own a home but prefer renting, and renters by necessity, who are unable to afford to purchase a home. The report shows that in this city, either demographic usually prefers the flexibility with simply renting. It has become unrealistic to buy a home, with ownership responsibilities included, Kern said.

“What changed is the average profile of a renter is someone who is older than a typical, younger renter, has a highly mobile kind of job and earns a higher wage or average income than you typically see,” Kern said. “I think we’re going to see the same source of renters going forward.”

As the Bay Area’s housing supply continues to be squeezed, an apartment in San Francisco grows more desirable for all income levels. Going forward the city should continue to see an increase in renters by choice as both housing demand and employment grows.

Kern added that surrounding neighborhoods, such as Daly City and Oakland, also have become very attractive. Although San Francisco is feeling the strain of development pressure, there are still options nearby that perhaps have yet to see their prime.

Source: The Registry, Alice Yin
http://news.theregistrysf.com/study-shows-san-francisco-housing-rents-are-fastest-growing-among-metro-areas-in-country/

To the World, U.S. Real Estate Is a Good Deal

San Jose and San Francisco on the list as good buys to foreign investors. This news comes as no surprise to active agents such as myself who work with these buyers and/or have them making offers on our listings. No wonder why the market is so hot here in the Valley.


To the World, U.S. Real Estate Is a Good Deal



U.S. housing markets are the most affordable in the world, at least according to a recent study of more than 300 metro housing markets in nine countries conducted by the research group Demographia.

U.S. housing markets were found to be more affordable than Canada, the United Kingdom, Ireland, Australia, New Zealand, Singapore, Japan, and China.

Researchers measured affordability by taking a look at median home prices and median household incomes. A market was rated "unaffordable" if it had a calculated value of higher than 3.0 and was "severely unaffordable" if above 5.1.

The U.S. markets analyzed showed a lot of variation -- such as Detroit at the bottom with a 2.1 value while San Francisco had a 9.2 value. Still, the U.S. averaged 3.4 as a whole, making it more affordable than other countries.

Hong Kong, on the other hand, was the priciest and at a record high on the survey. The survey found that even if a household could direct all of its household income toward buying a home, it would still take 17 years before the household could afford to buy. To live on Hong Kong Island alone, a resident would pay about $900 in U.S. currency for just a 150-square-foot apartment. Hong Kong is the most densely populated places across the globe; it holds 6,845 people per square kilometer. New York, as comparison, hold 2,050.

Hong Kong also had the smallest homes in the study, with the average size of a new home at just 484 square feet.

The study found the following major markets were the most unaffordable:

1. Hong Kong
2. Vancouver
3. Sydney
4. San Francisco
5. San Jose
6. Melbourne
7. London

Source: RealtorMag Online > Think Housing Is Pricey in America? Be Glad You’re Not in Hong Kong
http://realtormag.realtor.org/daily-news/2015/07/07/world-us-real-estate-good-deal?om_rid=AAFmZk&om_mid=_BVnCG4B9DXlYSt&om_ntype=RMODaily

Calling All First Time Buyers

I found this great info graphic from the California Association of Realtors clearly showing the basics of buying a home hear in California. For the San Francisco Bay Area for example, $482K is just the entry level price of a home, the highest in California with a minimum income requirement of $69K annually. Of course with tech sector that dominates in this area, there are many that make that minimum income, but then again, there are many that do not.

Source: California Association of Realtors (CAR)

The 20 Hottest U.S. Real Estate Markets in June 2015

Of the 20 hottest housing markets in America, the San Francisco bay area has two of them; San Francisco and San Jose (the Silicon Valley's largest city). Great article from Realtor.com.


Summer is officially here, and just like the heat waves sweeping through much of the country, the real estate market shows no sign of cooling off any time soon, according to a preliminary analysis of June data for realtor.com®.

“Our early read of real estate trends in June suggests good news ahead for the U.S. residential real estate market, especially in the hottest markets with healthy growth in supply,” said our chief economist, Jonathan Smoke, who conducted the analysis.

Based on data for the first three weeks of June, the median list price increased to $233,000, up 7% year over year and 2% over May. Median days on market is still at 66 days, down 7% year over year and flat month over month. Helping create more opportunities for buyers, the listings inventory is now growing faster, at 4% over May but still down over last year.

More and more Americans are spending time searching for the perfect home, our data show. On realtor.com, traffic and searches continue to set new highs in June, Smoke said. Unique users for the month are now on pace for at least 40% growth year over year, he found, while visits and searches are expected to be up more than 50% and 30%, respectively.

To see where demand for housing is greatest, Smoke and his team reviewed the number of listing views relative to the number of listings in the 300 largest U.S. markets. To see where houses are flying off the market, they looked at the median number of days that homes spent on the market.

Combined, this exclusive analysis—the realtor.com® Hotness Index—identifies the 20 medium-size to large U.S. markets where buyers are eagerly seeking homes and sales are closing quickly.

California again dominated the hottest markets list, with almost half of the country’s 20 hottest real estate markets. This is because supply is tight and the state’s strong economy is fueling demand. San Francisco captured the No. 1 spot from Denver, while Vallejo and Santa Rosa also made the top five.

Texas is represented four times: Dallas ( No. 5), Midland ( No.17), Austin (No. 18), and San Antonio (No. 19). Colorado sees Denver (No. 3) remain in the top three. Michigan is again represented twice, with Ann Arbor (No. 7) and Detroit (No. 9) both climbing in the rankings.

Texas and Colorado’s markets have remained resilient despite the declines in oil because of their diversified economies. Michigan, on the other hand, performs well because of the combination of economic recovery and very strong affordability.

Here’s the full list of the top cities in our analysis:

1. - San Francisco, CA
2. - Vallejo, CA
3. - Denver, CO
4. - Santa Rosa, CA
5. - Dallas, TX
6. - San Jose, CA
7. - Ann Arbor, MI
8. - Boston, MA
9. - Detroit, MI
10. - Santa Cruz, CA
11. - Sacramento, CA
12. - San Diego, CA
13. - Fargo, ND
14. - Billings, MT
15. - Columbus, OH
16. - Stockton, CA
17. - Midland, TX
18. - Austin, TX
19. - San Antonio, TX
20. - Fort Wayne, IN

Source: realtor.com, Cicely Wedgeworth
http://www.realtor.com/news/trends/hottest-housing-markets-june-2015/?iid=rdc_news_hp_carousel_theLatest

10 Housing Markets Fueled by Job Growth

The Silicon Valley (which they are calling San Jose, Sunnyvale, and Santa Clara) is #10 on this list, but it's STILL on the list. This area has had rapid job growth for sometime, but it can't maintain its high ranking forever. It's just interesting to see it still made the list.

Job growth is propelling home appreciation in several housing markets across the country. Nearly 3 million jobs have been created in the past 12 months, notably among the 25 to 34 age group too.

"With more jobs, more people in the labor force, and higher wages materializing, this spring's strong pace for home sales will continue," writes Jonathan Smoke, chief economist of realtor.com, in recent commentary.

Realtor.com® singles out the following 10 markets as seeing some of the highest job creation in the past three years as well as above-average price appreciation.

Atlanta–Sandy Springs–Roswell, Ga.

Employment growth, 2011–2014: 1.7%

Median home price growth, 2011–2014: 20.3%

Austin–Round Rock, Texas

Employment growth, 2011–2014: 3.7%

Median home price growth, 2011–2014: 8.5%

Charlotte–Concord–Gastonia, N.C.–S.C.

Employment growth, 2011–2014: 2.7%

Median home price growth, 2011–2014: 8.4%

Dallas–Fort Worth–Arlington, Texas

Employment growth, 2011–2014: 2.9%

Median home price growth, 2011–2014: 8.2%

Denver–Aurora–Lakewood, Colo.

Employment growth, 2011–2014: 2.9%

Median home price growth, 2011–2014: 10.8%

Grand Rapids–Wyoming, Mich.

Employment growth, 2011–2014: 4%

Median home price growth, 2011–2014: 9.8%

Orlando–Kissimmee–Sanford, Fla.

Employment growth, 2011–2014: 3.6%

Median home price growth, 2011–2014: 12.5%

Salt Lake City, Utah

Employment growth, 2011–2014: 2.8%

Median home price growth, 2011–2014: 10.3%

San Francisco–Oakland–Hayward, Calif.

Employment growth, 2011–2014: 3.2%

Median home price growth, 2011–2014: 16.8%

San Jose–Sunnyvale–Santa Clara, Calif.

Employment growth, 2011–2014: 4.1%

Median home price growth, 2011–2014: 15.6%

Source: RealtorMag Online

http://realtormag.realtor.org/daily-news/2015/06/08/10-housing-markets-fueled-job-growth?om_rid=AAFmZk&om_mid=_BVdcaTB9CahVMK&om_ntype=RMODaily

San Francisco leads the nation in property bidding wars

Great article from HousingWire about the bidding wars going on in many real estate markets across the nation. 

As a nation, bidding wars gained steam heading into the spring home-buying, with 61% of offers written by Redfin agents facing competition from other buyers in March.

While this is up 57% from February, it is down slightly from 63% in March 2014.

Then compare this to two of California’s, and the nation's, hottest housing markets.

Both San Francisco and Ventura County not only fail to follow the trend but also are surging higher.

San Francisco’s bidding wars are nearly at 100%, rising from 88% last year to 94%, with 32% of homes selling over the asking price.

Although, Ventura’s bidding war percentage is one of the lowest in California, it is one of the fastest growing, moving from 33% last year to 54%.

Also, 19% of houses sell for more than the asking price.

Dwight Johnston, chief economist for the California Credit Union League, previously spoke with HousingWire on how the solution for first time homebuyers, while maybe obvious, is to save. The California market is not changing anytime soon, and rather than hope for a change, buyers need to play to the system.

“The Bay area has a vast amount of money that is driving a lot of the competition, and there is no supply in the market at all,” Johnston said about these new numbers. “The more desirable areas are built out, and they are all competing for the same houses at the same time. They have so much money that they don’t have to worry about being rational.”

“In Ventura, except for the fact it is one of the coastal communities, it usually doesn’t get quite that amount of traction. Anything that is coastal or has any special allure to it, you will see some bidding wars. This is what California has become,” he continued.

So what’s fueling the San Francisco’s housing market?

The tech bubble.

Since the tech industry continues to grow, Johnston explained that people can afford the expensive houses there, and as a result, builders will keep constructing nicer homes.

“In the coast areas of California, builders want to get the maximum square reach because it is so expensive to build here,” he said. “And you can’t blame them.”

Johnston explained it’s only if and when the tech bubble starts to stop being inflated that market might cool down.


Source: HousingWire, Brena Swanson
http://www.housingwire.com/articles/33790-san-francisco-leads-the-nation-in-property-bidding-wars

U.S. Has World's Hottest Luxury Market

I'm surprised the Silicon Valley is not on this list, but San Francisco is.



San Francisco tops a global index based on prices for high-end real estate around the world. Its booming tech industry has helped push median asking prices in the area to more than $1 million, according to the Knight Frank Prime Global Cities Index. Home prices have risen about 14 percent in the past 12 months alone, according to the index.

The Knight Frank Prime Global Cities Index compares prime residential prices of the top 5 percent of the market in major global cities. The global index shows the following cities worldwide boast some of the hottest luxury housing markets, based on where home prices are rising by some of the highest amounts in the past 12 months:

• San Francisco: 14.3% (price rise)
• Bangalore, India: 13.6%
• Miami: 12.2%
• Vancouver, Canada: 11.8%
• Jakarta, Indonesia: 11.2%
• Tel Aviv, Israel: 10.2%
• Tokyo, Japan: 8.1%
• Dublin, Ireland: 8%

Source: “World’s Hottest Housing Markets,” CNNMoney (May 2015) via RealtorMag Online
http://realtormag.realtor.org/daily-news/2015/05/20/us-has-worlds-hottest-luxury-market?om_rid=AAFmZk&om_mid=_BVXMujB9B8LNd8&om_ntype=RMODaily

Saturday Stats

Great market data fro the San Francisco Bay Area and San Francisco.

San Francisco leads the way with high cost Bay Area housing

I live and work at my real estate business here in the Silicon Valley. San Francisco is not an area I typically do business but I couldn't help but comment on this article from the San Jose Mercury News because, in my opinion, it typifies where the top end of the market is going here in bay area.

The article is regarding a $49M, 14,000 sq. ft penthouse condo in a new luxury tower, call The Lumina Tower. It's located in the trendy SoMa (South of Market) area in San Francisco, located close to the Embarcadero and the AT&T park. It has views of the much of the bay and the bay bridge. So the views, the area and combined with the more or less bombing economy here in the bay, that is how the builders, Tisha Speyer, are justifying the stratospheric price.

New York is notorious with their high priced housing and now it seems San Francisco is headed in that direction, and this is putting more and more pressure on the low income and middle class in the region. On one hand, Yes, prices can't keep going up forever, BUT places like SF and the Silicon Valley where I'm at are very space constrained. The earth isn't creating more land to build on after all. This will always keep prices relatively high, And added to this the fact we have a booming tech economy creating high paying jobs, and investors from India and China with too much money burning a hole in their pockets. Anyhow, Yes, prices will come down eventually, but I'm afraid it won't stay that way for long.

Luxury S.F. condo hits the $49 million mark

San Francisco makes global list of top five cities for uber-wealthy real estate buyers

San Francisco makes the top 5 list of cities for the ultra rich

The Silicon Valley has its fair share of affluent buyers. I've had the pleasure of working with some of them myself, but San Francisco has the special distinction of being among the top 5 cities for Ultra High Net Worth individuals according to this article from SFGate.

San Francisco makes global list of top five cities for uber-wealthy real estate buyers