Bay Area housing market cooling as buyers dig in heels

Is the Bay Area housing market losing steam? Could be.

With more buyers saying “no” to mile-high prices, September sales of single-family homes were up a modest 2.3 percent — a far cry from the red-hot market of the last several years. And even more revealing, June-through-September sales for the nine-county region were down 5.1 percent from the same period of 2015.

That’s the upshot of a new report from CoreLogic, the real estate information service. The numbers mirrored the observations of brokers and agents, who cited push-back from buyers after years of bidding wars and spiraling prices.

“Buyers are kind of digging their feet in and saying, ‘We’ve hit a threshold of pain in terms of affordability and you’ve got to say no,’ ” said Jennifer Branchini, past president of the East Bay Association of Realtors. “It’s going to be a big issue going forward. It’s not going away.”

In Santa Clara County — the heart of Silicon Valley — the median price was frozen in place from the year before, at $910,000, and the number of sales declined a hair, by 0.3 percent. September sales dipped 4.7 percent in San Mateo County, while rising just 0.2 percent in Contra Costa County and 2.9 percent in Alameda County.

The market was more robust in some of the more affordable inland areas, including Solano County, where sales were up 19.1 percent and the typical home cost $349,000, up 5.4 percent.

Looking at the nine Bay Area counties as a whole, the median price rose 2.3 percent to $675,000. The typical house cost $498,000 in Contra Costa County, up 3.8 percent from a year earlier; $718,500 in Alameda County, up 7.5 percent; and $1.14 million in San Mateo County, up 7.1 percent.

Those still are hefty prices, to be sure. But the rate of appreciation is well off the double-digit clip of the old runaway market.

“The market’s sort of correcting itself, given how high prices had gone,” said Andrew LePage, research analyst for CoreLogic. “Given that the job market is healthy and mortgage rates are low, it suggests that the affordability problem has worsened and we still have inventory constraints in a lot of markets.”

As always, lack of inventory — housing supply, in the vernacular — is the crux of the region’s crisis.

Chris Trapani, founder and CEO of the Sereno Group, did some additional data-crunching to show just how scant the supply has become in Santa Clara County.

“January of 2000, right before the NASDAQ peak, was known as the all-time low” for inventory in the county, he said. “We didn’t actually eclipse that low until January of 2014, and then 2015 was even lower. And then the start of 2016 was a little click up — a nominal increase.

“We’re running on three to four years now of the lowest consecutive starts for inventory that we have on record.”

Trapani’s analysis of the Multiple Listings Service shows 1,510 active listings for single-family homes in September — down from 1,750 in September 2015 and down even further from 1,804 in September 2014. On top of that, his September data show a 7.6 percent year-over-year decline in closed deals. “It makes you wonder” whether prices “have gotten out of reach for an increasing number of buyers,” he said.

Prices remain high, Trapani, said, “but that’s because the inventory is so low. It doesn’t take that many buyers to buoy that kind of market.”

And the supply is stagnant, in his estimation, often because so many owners fear paying capital gains taxes on houses that have wildly appreciated, sometimes by millions of dollars. “They consider the taxes and say, ‘I’m not going to make that move.’ ”

Given the nature of the market, it can take some maneuvering to close a deal.

Nicole and Murray Dennon moved in 2012 from Seattle, where they owned a 3,500-square-foot Craftsman-style home, to Los Gatos, where they bought a house from friends — a 1,350-square-foot bungalow for the couple and their two children. A year ago, they began looking for a bigger place and were repeatedly frustrated by the prices, to the point that they feared they would have to leave the area even though they have a respectable income.



Murray works in the tech sector. Nicole is from a successful farming family. Yet “there were moments when we went, ‘Wow, did we make the right move, coming here?’ ” Nicole said.

Meanwhile, their agent, Kim Richman of the Sereno Group, spotted a house in Los Gatos last spring: a 2,500-square-foot fixer-upper with four bedrooms that listed for $2.4 million.

The Dennons — who built their house in Seattle — were willing to put in the sweat equity. But the house was owned by a family whose members couldn’t decide whether to sell and pulled the property off the market. Richman kept negotiating, quietly. The owners were stop-and-go, but in the end, after rounds of offers and counter-offers, agreed to sell — for $1.95 million. However, they put multiple contingencies into the contract, including that the Dennons sell their bungalow within two weeks of signing.

The bungalow went in less than a week for $1.42 million — $30,000 under the asking price — and the Dennons will soon move into their fixer-upper.

“We’re here for life,” Nicole said, “back in a big ol’ house.”

Source: San Jose Mercury News, Richard Scheinin
http://www.mercurynews.com/2016/10/27/bay-area-home-sales-and-prices-inch-up-in-september/

California housing market to see modest gains in 2017, Realtors forecast

California’s housing market will post modest gains next year amid tight supplies and the lowest housing affordability in six years, the California Association of Realtors forecast Thursday.

Sales of existing single-family homes – which make up about 68 percent of the overall market – are projected to rise 1.4 percent in 2017 to 413,000 transactions.

Next year’s small gain will follow a projected 2016 sales drop of 0.4 percent to 407,300 deals, the forecast said.

Meanwhile, the median house price – or price at the midpoint of all sales – is projected to rise 4.3 percent to $525,600. That’s the smallest percentage gain in six years.

By comparison, 2016 house prices are projected to be up 6.2 percent to $503,900 by the end of December.

“The net result will be California’s housing market posting a modest increase in 2017,” said Leslie Appleton-Young, the Realtor association’s chief economist. “The underlying fundamentals continue to support overall home sales growth, but headwinds, such as global economic uncertainty and deteriorating housing affordability, will temper stronger sales activity.”

Housing affordability will fall as price gains continue to outpace pay raises.

Just 29 percent California homebuyers will be able to afford a median-priced house next year, the association predicted. By comparison, more than half the buyers could afford the median-priced home in 2011-12.

In Southern California, house sales are projected to be virtually unchanged this year and next from 2015’s sales pace, the forecast said. Sales are projected to rise 0.4 percent this year and 0.7 percent next year.

The median house price in the region is projected to be up 5.4 percent by the end of 2016 and to rise 3.2 percent to $501,500 next year.

The state’s hottest housing market – the San Francisco Bay Area – will see larger price jumps amid falling sales as buyers flee to more affordable markets. The forecast projected sales declines of 6.4 percent and 5.6 percent in 2016 and 2017.

Bay Area prices, meanwhile, are forecast to increase by more than 6 percent both this year and next, rising to $833,600 in 2017.

Mortgage interest rates are forecast to rise next year, but not by much. The average rate for a 30-year fixed mortgage is expected to be 4 percent in 2017, compared to this years near-record low of 3.6 percent

Source: San Jose Mercury News, Jeff Collins
http://www.mercurynews.com/2016/09/29/california-housing-market-to-see-modest-gains-in-2017-realtors-forecast/

Tallying new apartment construction in Silicon Valley: Hope amid the housing crunch?

We’ve got jobs, jobs, jobs in the valley, but no place to put the workers when they clock out at night.

Maybe there’s a ray of hope. A new report from the RENTCafé apartment-search website says that intense renter demand is driving a wave of new construction in booming urban markets, including the San Jose metropolitan area.

RENTCafé compiled a list of the top 20 U.S. metros with the most apartments to be completed in 2016 — and San Jose cracked the list, barely. It sits in the No. 20 spot, but let’s call it progress: 5,866 new units are scheduled for completion this year in the metropolitan area, which includes Santa Clara and San Benito counties.

Compiling data from new large-scale projects (buildings with 50+ units), the report breaks down Silicon Valley construction like this: 4,077 units in San Jose; 445 in Santa Clara; 378 in Milpitas; 378 in Mountain View; 378 in Sunnyvale; 128 in Morgan Hill; and a measly 82 in Palo Alto. For many, Palo Alto still signifies “Silicon Valley,” but the city can’t seem to get off its duff when it comes to making decisions about housing.

Among the top 20 metros, Texas leads the pack with a combined 69,000 units projected for completion in Houston, Dallas-Fort Worth, Austin and San Antonio.

Houston sits in the No. 1 position on the Top 20 list; it has 25,935 units slated to come online in 2016. The rest of the Top 5, in order, is Dallas (23,159), New York (21,177), Los Angeles (20,205) and Washington, D.C. (18,027).

Here’s the full report.

As you can see, San Francisco is No. 12 with 9,362 new units — more than doubling the 4,144 units completed in 2015.

Whether all this construction will be enough to ease further Bay Area rent hikes remains to be seen. The region now has 746,100 technology jobs, according to an analysis by this newspaper published earlier this week. That tops the record set during the dot-com era by 21,000 jobs.

Where will all these people live, and how will they do it affordably? Good question.

A second-quarter report from Novato-based RealFacts showed rents continuing to climb across the region’s nine counties, though at a slower rate than the year before. The average Bay Area apartment rented for $2,526 in the second quarter, up 4.3 percent year over year. The average San Jose rent was $2,503, up 4.0 percent. In Oakland, the average was $2,959 up 5.4 percent, and even far-flung Concord saw a sharp increase of the average rent to $1,760, up 8.3 percent.

Those numbers don’t capture the mom-and-pop landlord rentals that tend to be less costly.

But they still are a good indicator of the region’s entrenched housing predicament — which drives thousands to commute long distances from more affordable communities to their jobs in the valley.

And incidentally, if you’re thinking of finding some relief by moving to Sacramento, think again. Among the top 5 markets for projected rent growth this year, according to RENTCafé, “Sacramento will have the smallest number of new apartments added to its inventory in 2016, an unimpressive 730 units in large-scale developments. This actually represents a 30% decrease compared to 2015 when 1,000 units hit the market.”

Source: Silicon Beat, Richard Scheinin
http://www.siliconbeat.com/2016/08/19/report-tallying-new-apartment-construction-silicon-valley/?_ga=1.22882299.1788795839.1424213200

6 Reasons Real Estate Agents Aren’t Extinct

It’s 2016, and it seems our need for real live people is ever-diminishing. There’s self-checkout instead of cashiers, selfie sticks instead of photographers, self-driving cars, self-watering plants, self-administered colonoscopies … well, you get the idea. Given that technology has become so important to buying and selling homes, you’d also think real estate agents would be a dying breed—yet they aren’t showing any signs of slowing down, with approximately 2 million active real estate agents throughout the country.

So why did real estate agents make the technology transition fully intact as opposed to, say, travel agents? We asked some experts to weigh in.

Reason No. 1: Selling is complicated

For many people, “a real estate transaction is financially momentous and complex—the most complex transaction people do in their life,” explains David Reiss, a law professor and academic program director for the Center for Urban Business Entrepreneurship at Brooklyn Law School.

Comparatively, personal travel agents—the kind where you’d walk in their office and have them book you a hotel and a flight—have gone the way of the dodo, because now that’s all simple DIY stuff (to be fair, not all travel agents are out of a job—there’s still a healthy travel agency sector that thrives on corporate and luxury bookings).

“People like having an expert when dealing with large, complicated transactions,” says Jeff Tomasul, founder of Vespula Capital LLC, an investment management company based in Greenwich, CT. “Why do people still have financial advisers? They want someone who does it full-time to make sure they are not doing anything wrong.” Same with real estate agents.

And real estate transactions are often anything but straightforward. Some deals, like short sales, can be “much more intricate than a regular transaction,” Reiss says, with lenders who have requirements that “a regular person would have no idea about.”

Reason No. 2: Buying ain’t easy, either

Buying a home, even if you come in with all cash, is not a cookie-cutter task, and you can find yourself drowning in paperwork and stressed out juggling things like meeting buyers, and dealing with the seller’s agent, lender, and title companies. Agents ease the whole transaction, and it’s something that has kept their profession alive.

“They can hold your hand through the process,” Reiss explains. “They might say, ‘This lender takes a long time, so put in your contract immediately and sign this and that paper and get all this stuff ready before you’re walking over hot coals with the lender for money.”

Reason No. 3: It’s their top priority

Your own interests and priorities will very likely always be split—because of those pesky little things like, say, job and family—but a Realtor® can be laser-focused on getting the deal done. “A Realtor has a singular aim: to sell houses,” Reiss says.

Simply put, having a real estate agent can make your life easier. Tomasul found himself in a frustrating position when he tried to sell his apartment in Manhattan without an agent. “Showing it was so tough with my schedule, and it was hard having a full-time job and keeping up in a timely matter with potential buyers,” he recalls.

That means the less you make time for buyers, the longer your place will stay on the market—and that’s not good for your bottom line.

Reason No. 4: They know the market, and the players, better than you

“The agent knows the market intimately, even more than a pretty informed resident,” Reiss says. And all that knowledge saves time. “Tracking sales, knowing listings, spending a lot of shoe leather on houses already for sale—right off the bat, they know more than the ordinary Joe and Jane. They understand condo boards and title companies. As a player in the game, they know what the other players are looking for and how to deliver.”

Reason No. 5: They’re objective

Without an agent showing your house for you, you have no shield from criticisms that can—and will—be made about your house from prospective buyers. Your favorite room in the home might be described as “tacky,” “needing a renovation,” or much worse. Sometimes such comments are negotiating tactics. Sometimes they are heartfelt, off-the-cuff opinions. But either way, they can lead to problems.

“It impacts objectivity for a seller to hear negative things about their own place,” Reiss explains. “Realtors aren’t emotionally invested. They don’t take comments personally. It’s not ‘Oh, you don’t like my chandelier? Then get out of my house.’”

Reason No. 6: The cost is worth it

We’re not saying a 6% commission is chump change. It can be a good amount of money when you’re selling your house. But using an agent saves a ton of time. Even with a 6% commission, time is money—for many people, time saved negates the cost. Plus, given that home buying and selling is a negotiation where you can save big if you bargain right, skilled real estate agents can step in to fight on your behalf, saving you major money. In other words, typically the money you pay an agent will come right backatcha.

Feeling a bit more confident than ever that you should have a real estate agent watching your back? Then Find a Realtor now and get moving.

Source: Realtor.com, Craig Donofrio
http://www.realtor.com/advice/buy/why-realtors-are-here-to-stay/?iid=rdc_news_hp_carousel_theLatest

The 20 Hottest Housing Markets This Spring

Two of the top housing markets in the United States are in the Bay Area, one of which is in the Silicon Valley; San Jose. Great news for our market here. Great news if you are a seller!

The 20 Hottest Housing Markets This Spring
California continues to dominate the latest list of some of the busiest housing markets across the country. The Golden State boasts 13 of the 20 top markets. Some Eastern markets like Boston and Raleigh, N.C. are also making a comeback.

Realtor.com® identified the 20 hottest medium- to large-size housing markets for March. They analyzed the number of listing views per market (to show demand) and median days on the market (to show supply). According to their preliminary site data, housing inventory is down 2 percent year-over-year, which is making things quite competitive in many markets.

“Listings are growing as they normally do this time of the year, but because demand has been growing faster than supply, homes are selling faster,” says Jonathan Smoke, chief economist of realtor.com. “So the monthly trend is the normal seasonal pattern, but the year-over-year decline is reflective of demand being stronger than supply for more than a year, which is resulting in fewer homes available and faster-moving inventory.”

This ranking shows the 20 markets where listings are getting two to five times more views than the national average and homes are selling one to two months faster than in the rest of the country:

Source: Realtor Mag Online > Realtor.com
http://realtormag.realtor.org/daily-news/2016/03/31/20-hottest-housing-markets-spring?om_rid=AAFmZk&om_mid=_BW-ZpfB9MRHMlq&om_ntype=RMODaily

Sales flat, prices mixed in February Bay Area housing market

A shortage of Bay Area homes for sale sparked bidding wars last month but kept sales low in what was the second-slowest February in eight years, according to a report released Thursday.

Sales of single-family homes were flat from a year ago across the region, the real estate research firm CoreLogic said, but it was a mixed market.

First-time buyers were moving eastward, keeping sales robust there, said Andrew LePage, a research analyst with CoreLogic.

"There's more activity in some of the inland markets because of affordability," he said. But overall, sales "are off to only a slightly stronger start than in 2015," LePage said.

Real estate agents in parts of the East Bay and South Bay said there was plenty of demand -- just not enough homes on the market. But in some areas, buyers were giving up.

"A lot of people are dropping out of market," said Lynne French of Windermere Real Estate in Clayton in Contra Costa County. "For first-time buyers, $739,000 for a house is tough."

High prices pushed millennial first-time buyers to the edges of eastern Contra Costa County. Sales were up 7.6 percent from a year earlier in that county and the median price of $460,000 was up 2.2 percent.

"Affordability is the issue," said Jennifer Branchini, a real estate agent in Pleasanton. "First-time buyers are being pushed really far out."

For Lisa and Brian Johnson, it's been a war on multiple fronts, competing with downsizing baby boomers and investor-flippers for what they hope will be their first home.

"It's a difficult market," Lisa Johnson said. "It's just highly competitive. You're fighting off 10 to 15 other people who want the exact same house. And then there are the people purchasing houses to flip them. It's crazy."

The Johnsons have been looking for five months and have an offer in on a $290,000 condo in Pacheco, a small town next to Pleasant Hill. "We're hoping this is the one," she said.

Low inventory and overbidding drove prices up 15.7 percent to $640,000 from a year ago in Alameda County, while the number of sales dropped 1.6 percent.

Inventory levels "dropped off a cliff in December" and are just now coming back, said Glenn Bell with Mason-McDuffie Real Esstate in Berkeley.

But at this point there's still a shortage in Berkeley and Oakland, said Barbara Reynolds with McGuire Real Estate.

"Anything on the market is going for $200,000 to $300,000 over asking for houses priced at $900,000 to $1 million," McGuire said. "There are plenty of buyers," she said. "That's the issue. There are 15 offers for every home."

In San Mateo County, sales were up 3.9 percent over the year, but prices remained below $1 million for the second month in a row at $977,500. Median house prices also dipped below $1 million in San Francisco on a 25 percent drop in sales. It was the first year-over-year decline since February 2012, but LePage cautioned that it could be a one-time blip.

In Santa Clara County, sales dropped 11.3 percent from last February while prices rose 7.7 percent to a median of $862,000. Eight out of the past 12 months have seen double-digit price increases, but LePage said it's too soon to declare a trend toward slowing prices.

Another factor depressing inventory is soaring rents, which make it tempting to rent out a home rather than sell it.

"The rental market is really good and a lot of people originally trying to sell have decided that rental income is so good, why shoot the golden goose," said Mark Wong of Alain Pinel Realtors in Saratoga.

Buyers have to jump fast, Wong said. One of his clients snagged a Cupertino home for $1.3 million only by making an offer before the open house. "Buyers want to buy, so the timing is very critical," Wong said.

Several real estate professionals said they've seen first time buyers competing against downsizing baby boomers.

"It's a generational thing," said Kevin Kieffer with Keller Williams in Danville. "The empty-nesters are coming in and taking all the properties. The baby boomers are the first-time buyers' toughest competition, and nine times out of ten the baby boomer is winning."

The CoreLogic report covers sales that closed in February. These are typically purchases that began late last year or early January.

Source: San Jose Mercury News, Pete Carey
http://www.mercurynews.com/business/ci_29651329/sales-flat-prices-up-february-bay-area-housing

So You Wanna Sell Your Home? Step 3: List It at the Right Price

Putting a price tag on a home you’re trying to sell is a tricky thing. For one, it’s your home, crammed full of memories, hopes, and dreams—and all that stuff can cloud your thinking and lead you toward the wrong price. There are consequences: Shoot too high, and your home could languish on the market for months and maybe not sell at all. Price it too low and you could bilk yourself out of a whole lot of dough.

That’s why we’re here to guide you through this tough but critical decision (and all the others you’ll have to make) with our step-by-step weekly Home-Selling Guide. Read on to pinpoint a price that’s just right.

Repeat after us: What you paid doesn’t matter

You may have a dollar figure in mind—perhaps based on what you paid originally, plus a little extra. Because homes appreciate, right? Maybe yes, maybe no. While a hefty increase in value is nice in theory—and in general, it’s expected to be a seller’s market this year—“ultimately, it’s up to the market,” says Chandler Crouch, broker of Chandler Crouch Realtors in Fort Worth, TX.

Think of it this way: Would you buy a banana for $1 if those same bananas were on sale down the block for 69 cents? Of course not! And, of course, a home ain’t no banana.

No matter what you paid for your home, market values fluctuate—both up and down. This can work for you or against you. But all that matters on the open market is what buyers are willing to pay now.

Use all your tools: Comps, AVMs, and your Realtor®

The best way to get a handle on your home’s sales price are the prices of similarly sized homes in your neighborhood—otherwise known as “comparables,” or “comps.” For example, if a house near yours with the same square footage and numbers of bedrooms and bathrooms, and in similar condition, sold for $230,000 within the past three months, you can bet your own price will be in that ballpark.

For a quick snapshot, several websites (including this one) offer automated valuation models, or AVMs, where you type in your address and then get a price based on an algorithm that factors in comps in your area. But AVMs are just a starting point.

“No one has actually put eyes on your house, so an AVM can’t really give you an accurate price,” Crouch says. That’s why you need your Realtor to visit your home, so she can factor in your home’s unique strengths and weaknesses along with comps to come to a better estimate.

When your Realtor tells you a price, check it. Ask her how she came up with the amount, and look into the comps in your area yourself. Once you’re able to pore over the info, Crouch says, “you’ll be able to see a price range for yourself, so you won’t feel like you’re just having to blindly trust your Realtor.”

Factor in upgrades with a grain (or two) of salt

Yep, you poured $10,000 into your brand-new chef’s kitchen, or $15,000 to install an in-ground swimming pool. Sweet! So it stands to reason that you’d make that money back when you sell, right? Well, not quite. Surveys by the National Association of Realtors® show that your return on investment for home improvements depends on what kind of renovation you’ve pulled off—and how much prospective buyers want it in your area. Refinishing hardwood floors, for instance, will reap a 100% return, paying for itself. Convert a basement to a living area, and you’ll recoup only 69% of those costs. The harsh truth: Not everyone is going to fall head over heels with your five-seat built-in hot tub.So do your research and find out what those upgrades will really get you.

Leave some wiggle room

Most buyers love to negotiate when you’re trying to sell your house. So it helps to “let them win one,” Crouch says. Instead of starting out with the absolute lowest price you can afford to go, add a bit of a cushion. How much? Crouch says you should round off your asking price in $5,000 increments. “It’s just how people think,” he says. So if you know you want $347,000 for your house, you can play it safe and round up to $350,000.

Also keep in mind that many first-time buyers may have a hard time coming up with cash for closing in addition to their down payment, even if their finances are good and they’re qualified for a loan. Offering to cover closing costs—while sticking to a higher asking price—might help seal the deal.

Price with Internet browsing in mind

Once you find yourself a ballpark price you’re happy with, it’s time to fine-tune it. Keep shoppers’ online search parameters firmly in mind—small differences in your price can spell a big difference in your exposure.

“Home buyers typically fill out a Web form that has a minimum price and maximum price,” says Crouch. “If you’re a dollar outside of that range it is going to be like your house didn’t exist—they’ll never see it.” In other words: Price your home at $300,000, and you could miss out on a whole lot of people who are searching in the $250,000–$299,999 price range. So if you’re on the cusp, consider rounding down to capture more eyeballs. Remember what we said about padding? It cuts both ways.

Test the waters with a soft rollout

While choosing a price can be scary, consider this one small loophole: Some brokerages offer a “soft” rollout plan in which they highlight the house as “coming soon” online, without officially listing the house in a multiple listing service. That buys you time to test the market, see if people will click at that price—then adjust accordingly without having to officially lower or raise your price on the record.

Souce: Realtor.com, Angela Colley
http://www.realtor.com/advice/sell/sell-home-right-price/?iid=rdc_news_hp_carousel_theLatest

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

Bay Area housing crisis may cause NIMBY attitudes to wane

Great article from the Mercury News that more or less sums up the housing crisis here in the Bay Area. The lack of affordable housing is a big problem here, but is building small, "crackerjack box" size units for the low and middle income crowd the solution? 

An argument that is made by one of the people quoted in the article is that the lack of housing could bring about economic collapse here in bay area and the Silicon Valley because there won't be enough housing for all the employees that the major employers (such as Google, Apple, Facebook, etc) need for fill their positions. 

So, having put that out there, let's think this through; housing here in the valley is expensive (renting or buying), so if there is not enough housing, there is not enough employees for the employers here to hire, so the employers move operations elsewhere, which means less jobs here, so with less of a population that can afford the high cost of housing. . . . housing costs go down! Right?

Don't get me wrong, I don't want major employers to leave this valley, and remember, I am a Realtor. I get paid on commission so the more expensive the property, the more money I make! However I am a human being so I also believe in my heart that everyone deserves quality housing that is affordable, and maybe letting basic market forces play out will bring prices down instead of making local political leaders stick their fingers in the market and therefore making the housing situation worse.


Housing woes in the Bay Area have become so severe that two out of three residents now believe it's tougher to find a place to live, and at least half are ready to embrace higher-density housing in their neighborhoods to help tackle the problem, a poll released Thursday shows.

The poll by the Bay Area Council found that 67 percent of residents in the nine-county region believe finding a place to live is more difficult now than it was a year ago, and 50 percent support more housing, even if it means their city might become more packed with residents.

"The economy in the Bay Area could be hurt by the lack of affordable housing," said Tracey Grose, vice president of the Bay Area Council's Economic Institute. "It will be harder for employers in the Bay Area to recruit people. We are already seeing some evidence of that."

What's more, 76 percent of residents want policy makers and developers to direct their efforts toward the creation of certain types of housing. Specifically, respondents want the focus on housing for low- and middle-income people.

It's another sign that some Bay Area residents are willing to jettison their long-held anti-growth sentiments that are often dubbed "not in my backyard," or NIMBY.

"It's good that residents are willing to embrace higher density," said Christopher Thornberg, a founding partner with Beacon Economics. "That should have been happening a while ago."

Higher-density housing development was supported by 56 percent of Santa Clara County residents, 55 percent of Alameda County residents and 53 percent of San Francisco residents, according to the poll.

Asked about whether they would accept housing in their own neighborhoods, an affirmative response came from 61 percent of San Francisco residents, 59 percent in Alameda County and 58 percent in Santa Clara County.

"Water isn't the only thing that is in short supply in the Bay Area," said Jim Wunderman, president of the Bay Area Council. "Our region is growing, our economy is humming, but the housing shortage could be our Achilles heel."

Wunderman called for the housing problems to receive the same decisive action that's being undertaken statewide to combat the drought.

"We need a bold regional response to our historic housing crisis," Wunderman said.

San Francisco was also seen as the area that is most in need of affordable housing, according to the poll.

"This whole problem is going to get very bad very quickly," Thornberg said.

A growing number of Bay Area residents are expressing specific solutions to deal with the region's housing ailments.

About 65 percent of residents say they support reductions in fees and regulations for new housing. That's up from 61 percent in the same survey a year ago.

"There is a danger that the housing crisis will undercut our innovation ecosystem," Grose said.


Source: San Jose Mercury News, George Avalos
http://www.mercurynews.com/business/ci_28378843/housing-crisis-may-cause-nimby-attitudes-wane

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