More than half of American workers would pay a larger mortgage or rent payment for easy access to public transportation. And Bay Area freeways should soon see some extra relief, with the SMART train set to open in the North Bay and a BART extension proposed for Silicon Valley. Get the full story at http://pacunion.us/2alTvnl
Housing Market
June 17, 2016 RE Update
Ok, so I’ve taken a little bit of time off from the ole blog…but I’m back at it now! Here is my mid-June market update…in video! Check. It. Out.
All-in-all, the real estate market is looking pretty strong – don’t let my dour face fool you. I’m still getting used to the camera…Inventory is coming back, buyers are still in; we’re still seeing multiple offer situations but they are a more reasonable 2 or 3 offers, rather than the 9 offers I had seen before.
I hope that you all have a great Father’s Day Weekend. If you are looking for something to do, check out the 10th Annual Pirate Festival down by the water front in Vallejo. I know that I’ll be there on Sunday. I hope to see you there!
Ready, Able…& Unwilling?
In case you missed it, there is a lack of inventory right now. One of the reasons why may be that the more affluent aren’t so interested in moving right now.
According to the latest infographic from CAR, many affluent individuals are holding off on buying until they find exactly what it is they want…
Pacific Union’s 4th Quarter Update
Last week Pacific Union released it’s 4 Quarter update for Napa County. Lack of inventory is still driving housing prices up.
Here’s the complete Q4 Market Pulse from Pacific Union:
Bay Area Housing Prices Continue to Rise
According to the Case-Schiller Home Price Index released last week, the San Francisco Metro Area had the highest year-over-year price gain in December. The price for single family homes rose 9.3% from December 2013 to December 2014.
This is almost double the rate for the rest of the nation which saw housing prices increase 4.6% in December 2014. In Napa County, the median home price jumped 10% to $522,500. In American Canyon, the median home price jumped a whopping 21.3% to $455,000 in December 2014.
The current median list price for a single family home in American Canyon is $500,000. However, according to David Blitzer, managing director of the Index Committee at the S&P Dow Jones Indices, he believes that the overall numbers show that the housing recovery is faltering due to sluggish construction and new home sales activity.
According to Blitzer, “The softness in housing is despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates, and positive consumer confidence.”
10/3/14 – AmCan Market Update
Preliminary sold numbers show a slight retreat year-over-year, but overall the American Canyon housing market is relatively strong and stable, particularly for those 1st time home buyers. The number of sales dropped by almost 50% year-over-year with a similar – but lesser decline in median price sold. There has been speculation that the earthquake has had a dampening effect on the market; coupled with an ever increasingly earlier start time for school and then a typical leveling out of the market, this is almost
to be expected. In fact, it may even be healthy for the market in the long term since these double digit price increases were untenable for any great length of time.
With interest rates still low (and not expected to rise until after 1Q), it’s a great time to buy in the city. Currently there are 26 homes on the market at a median list price of $485,400. In particular, we had the opportunity to see 417 Knightsbridge Way a couple of weeks ago. I almost can’t tell you what the home looks like inside because the backyard is absolutely stunning because of it’s size. This is listed by Henny Gho with Eagle Vines at $459,000. It backs up to open space and so the backyard feels even larger than it is.
This home was sold this past June, renovated and is now being flipped. Updated kitchen, hardwood floors throughout; the home has a newer roof. 4 beds, 4 baths at approx. 2000 sf. Light and airy, I loved having the chance to see this home. Much like yesterday’s tour, this home had a uniqueness that is often missing in the AC. Contact me if you are interested in previewing it.
(707) 853-0797 or richard.peterson@pacunion.com
Jumbo Borrowers get a “Jumbo” Break
Buried in the news cycle last week was a piece on CNNMoney titled, “For rich people, mortgages are getting cheaper and easier.” Our very own Pacific Union blog picked it up today and I thought that I’d add my own 2 cents (give or take a half pence). According to the article, many individuals who qualify for a jumbo loan are now getting a better rate on their mortgage than the average person. According to the PU blog, in fact, interest rates on jumbo loans have been lower all summer long. For example, last week the average rate on a jumbo loan was 4.30% compared to 4.39% for a 30 year, conventional mortgage. While .09% doesn’t sound like much, when talking about a $625,000 loan, the money ads up quickly.
In addition to this, it appears as though jumbo borrowers are also getting a break on credit scores as well as the amount of money required to put down. Many of these jumbo borrowers are now only required to put 10% down and some aren’t even required to buy private mortgage insurance (or PMI). PMI is put in place to protect banks from loss on high-risk loans. Apparently, if you have enough money, you aren’t high risk. Add to this that the minimum qualifying credit score has dropped from 700 to 650 on these jumbo loans and you have a perfect storm for the more affluent borrowers.
Unfortunately, this has little to no trickle down effect on first time home buyers. Although the minimum credit scores to obtain a loan have eased over the summer, for many people who are saddled with student loan debt, their own home is still out of range. In addition, many people who have defaulted on or had to short sell their homes during the financial crisis are still forced to sit on the sidelines, waiting for these blemishes to be erased on their credit report. However, with the glut of distressed homes run through the market over the past couple of years, many of these people may now be in a position to come back to the home buying arena. Perhaps this is why Freddie Mac’s Chief Economist (Frank Nothaft) put out an advisory notice today saying that he expected 2015 to be the best year for home sales since 2007.
Aug 4 Weekly RE Roundup
What? Millenials are being shut out of the San Francisco Housing Market??! No kidding…
According to RealtyTrac, San Francisco is the least affordable city for Millenials looking to buy a home. It’s a good thing that they aren’t looking…oh wait, according to last week’s infograph by CAR, 31% of the Gen Y’ers still think that buying a home is a good investment. With Alameda County coming in at the 8th least affordable housing market for Millenials where does this leave them? Increasingly, it may put them at odds with investors who are looking for bargains as well as pushing them further out into the suburbs.
Meanwhile, As I snooped around the Pacific Union Blog, it seems that the San Jose Mercury News reported that the sales volume for $1M+ homes is at an all time high. Over 5,700 homes have sold for over $1M in the second quarter alone…more good news for Millenials.
The National Association of Realtors recently released a study showing that Millenials are increasingly out of the housing market nationwide (not just the SF Bay Area), and have the lowest rate of home ownership in almost 2 decades. This isn’t exactly bad news, however. According to the study’s summary:
The strange pattern of more homeowners but a falling homeownership rate…will continue for the next 2 years…because household formation of young adults who had been living with their parents will seek out their own housing with an improving economy, first as renters before the shift to homeowners.
So then perhaps not all doom and gloom for the millenials after all. They’re graduating, living with their parents until they pay down some of their debt, moving out on their own and then making a responsible decision to purchase a home once they can afford it. So perhaps the real reason we’re seeing the lowest rate of homeownership among Millenials in a generation has less to do with homes being unaffordable and more to do with making sure that they’re solvent before purchasing a home. This sounds – to me – that perhaps they are taking some sound financial advice rather than that the sky is falling because they are being prudent. Just a thought.
Napa Brokers Tour 7/31/14
I have to admit, I have a pretty great vocation: Not only do I help build communities by helping people purchase their (for right now) dream homes, at least twice a week I get to run around and look at other people’s homes, architecture, design styles, etc. It’s a pretty unique situation and I feel pretty lucky that I get to be a Realtor for a living. Days like today, where it’s bright and sunny in Napa and not (yet) too hot make Brokers Tours a highlight of the week. And then!! when I have the opportunity to see a few special homes on top of it, it makes it even better.
It’s not entirely fair to say that a $2.145M custom-built home nestled within Browns Valley is the home of the tour, but it was. 19 Huntington Ct is listed by Stefan Jezycki with Pacific Union and is a 4 bedrooms, 4.5 baths, ~5700sf; a creek runs through the back yard. My hope for the general public is that there is an open house slated for the weekend of August/9-10 because it is worth seeing. First showings are on August 4th with 24 hour notice.
There are a couple of other gems that I found along the way today. The first home that I think is absolutely great is 755 Joseph Ct, about 1.5 blocks from Pueblo and literally across a cul-de-sac from O’Brien Park and McPherson Elementary School. Just an absolutely wonderful location. This home is also exclusively listed by Stefan and is offered at $514,900; 4 beds, 2.5 baths and ~2000SF, it shows much, much better than the pix. 
I’m not always a fan of the split level homes, but for whatever reason this one really works for me. Hardwood floor throughout the entry way, main living area and kitchen provide a polished and updated look. Stepping down, there is a separate family area with fireplace and a sliding glass door that opens out into the backyard. There is a medium-sized patio with arbor; the backyard has recently been landscaped using a black tanbark & mulch mixture with a mind to the current drought, but also making perfect soil in case someone wishes to re-sod it. It’s open on Sunday from 1:30 – 3:30pm; it’s also easy to show, contact me to make arrangements to view it.
My other favorite home today was 71 Homewood, exclusively listed by Tracy Warr and offered at $350,000. Wonderful 2 bed, 2 bath home, ~900SF. This home was bought as an REO in 2009 and the current owners did a remarkable and loving job of updating this home. 
Hardwood floors throughout the primary living area gives an elegant touch. Black tile in the kitchen gives it a contemporary feel while the white cabinets provide a rustic counterpoint that I think works very well. Huge backyard with room for a pool, lawn and a standing hammock. This would be a great starter home for a young couple or family. 1 hour notice to show, the home is not currently scheduled to be open this weekend (although that could change); they’re taking offers on Wednesday 8/6 @ 5pm so take some time to get over there.
Contact me for any of your real estate needs: 707.853.0797 or richard.peterson@pacunion.com
Are Millennials Ready to Buy?
According to the latest infograph from CAR, the answer is a resounding…YES!
But I think that it’s fair to say it’s a qualified yes. At a broader level, the graphic shows that 31% of Gen Y think that a home is a good investment. Dig a little bit deeper, and there are some big deterrents that may be keeping so-called Millenials on the side-line: tight lending restrictions, massive student debt, unaffordable homes…Note, however, that lack of inventory is not on of the reasons to sit on the sidelines. Nor is an increase in the mortgage rate since those are still historically low (remember the 80’s when they were in the teens??!).
The biggest issue for the Gen Y crowd will be lending restrictions as they relate to student loan debt. Generally, to receive an FHA loan, the debt-to-income (DTI) ration must be at or below 43%. Assume that it takes 5 years to graduate (not unheard of these days) and the student has to borrow money for tuition (not including room & board, etc.); by the time the student graduates s/he will owe $27,360 before interest (Based on the 2013-14 tuition for a CSU school). That’s already 37% of the $73,600 median income. Throw in a couple of credit cards and everything else, it’s pretty easy to get to 43% DTI. There are still more than a few kinks in the system to be worked out.
Your Napa Valley Home 