April ’13 Numbers
May 11, 2013 by Glen Bell · Leave a Comment
What a difference a month can make, so it seems at first glance. We finally saw a fairly substantial gain in inventory, 1,830 homes for sale, up from 1,395 in March. However, we have to be asking ourselves, is that the normal influx we see this time of year? Although it’s a fairly sizable percentage gain, in reality, we still have extremely low inventory levels. We increased our month’s supply from 18 days to 24 days. Some cities benefitted more than others with for example, Berkeley and Oakland are now at or slightly above a 1 months’ supply.
More buyers are coming into the market competing for what little is available. Houses are selling quickly and for more money.
When will we get back to normal levels? No one seems to be willing to predict anytime soon. Many are pointing to a gradual move towards a more normal market perhaps seeing this “hot” market begin to plateau later this year.
Why are we here? I’m borrowing from Leslie Appleton Young’s, (CAR principal economist), list as a basis;
1) Housing affordability is at historic highs due to home prices still being well below their peaks in many areas coupled with the lowest interest rates that we’ve seen in years.
2) Low rates impacting other investment alternatives
3) Little new construction for last 5 years
4) Supply & Demand, Fear and Greed
5) Foreclosure pipeline drying up
6) Investors are renting instead of flipping
7) Many potential sellers fall under the following groups:
- They owe more than the property is worth and are stuck
- If they don’t have to sell, prefer to wait until prices get back to their peaks
- If I sell now, do I want to buy something else in this competitive market
- Our inventory for the East Bay (the 38 cities tracked) is now at 1,830 homes actively for sale, up from February at 1,395 and up from the December low of 1,086 homes. We’re used to seeing between 5,000 and 8,000 homes in a “normal” market in this area.
- The month’s supply for the combined 38 city area is now at 24 days up from the December low of just 15 days. Historically, a 4 to 5 months supply is considered normal for this area.
- Our Pending/Active Ratio is at 2.45. This is the 14th month in a row that the ratio has been above 2, still signaling a strong seller’s market. (Keep in mind that this number is overstated due to the large number of short sales that remain in pending status for longer periods than normal).
- Distressed properties, (REOs and Short Sales), are still declining. 13% of the active listings, 43% of our pending sales (primarily due to the large number of short sales – 37%), and 28% of the sales over the last 4 months have been distressed properties.
Click here to view Glen’s Numbers for April, 2013.
Recent News
Bay Area home-sales price rises, Tight inventory, low interest rates propel March rise, By Carolyn Said. April 19, 2013
Low interest rates, tight inventory and improving buyer confidence helped propel Bay Area home sales in March.
The median sales price across the nine counties rose 21.8 percent compared with a year earlier, while sales volume shrank 6 percent, according to a real estate report released Thursday.
“The pendulum is swinging back to normal,” said Andrew LePage, an analyst with San Diego-based Dataquick, the real estate information company that produced the report. “The high end is not comatose anymore, and there are far fewer foreclosure resales.”
Those two factors – along with a continued lack of inventory – propelled the median price paid across the nine counties to $436,000, compared with $358,000 in March 2012. More than half the increase was due to rising home prices, the rest to a change in the mixture of homes sold.
“It’s crazy,” said Glen Bell of Betters Homes & Gardens/Mason-McDuffie Real Estate in Berkeley. “In the 38 East Bay cities I track, we are sitting on an 18-day supply of homes for sale – typically it would be three or four months.”
Right now, that 38-city area has 1,400 homes listed. Normally, it should have between 4,000 and 7,000 homes for sale, he said.
Housing Market Rebound: Real or Mirage? by Emily Driscoll, April 26, 2013
Although the housing market seems to be on the upswing in many parts of the country, investors aren’t ready to fully jump back into the sector over recovery concerns and worries over another bubble forming.
The S&P/Case-Shiller index, covering approximately half of U.S. homes and measuring prices compared with those in January 2000 creating a three-month moving average, found prices rose in the largest 20 markets by 8.1% in January compared to a year ago, and up from a 6.8% annual gain in December. The index shows that U.S. home prices rose in January at the quickest annual pace since 2006 right before the bubble burst, yet homeowners may be fearful that the existing market conditions are growing at an unsustainable pace.
Despite the improvements, there are still challenges to be addressed, says Shah Tehrany, managing director at Franklin First Financial.
Impact of Low Interest Rates Fewer Foreclosures
Unemployment Availability of Mortgage Lending
“It would take a double dip recession to really offset the housing recovery at this point and I don’t think that just a lingering slow pace in growth will be enough to knock it off its tracks. “
Consumers may be able to see indications of sustained market growth in as little as the next few months, predicts Gross.
“We’ll see how the summer goes and that will be a little bit of an indicator but my estimate would be another year until we have a good housing market,” he says. “If employment goes down, within the year the housing market should be in a much better position than we are today.”
LPS: California, Washington Lead Monthly Price Gains in February, By: Esther Cho, 04/29/2013
California cities dominated the top 10 list for metro area price gains, with 9 out of ten metros representing the state. Seattle, where prices rose 2.5 percent, was the one exception and ranked No. 4. California cities in the top five were San Jose (+3.2 percent) San Francisco (+2.8 percent), Vallejo (+2.6 percent), and Sacramento (+2.4 percent).
Bay Area housing recovery spreads from Silicon Valley to East Bay, By Pete Carey, Mercury News, 4/26/2013
The Bay Area’s overheated housing market is restoring thousands of homes to their pre-crash peak values in a ZIP-code-by-ZIP-code recovery that is rapidly spreading from Silicon Valley to the East Bay.
Thirty-four of 185 ZIP codes in five counties have regained or surpassed their bubble-era peak home value or are less than 1 percent from it, according to this newspaper’s analysis of February median values for all homes from online real estate site Zillow.
Another 49 ZIPs are within 15 percent of their previous highs, including 18 in the East Bay. A year ago, only part of leafy Palo Alto had regained the value it lost after Bay Area home values crested in 2006-07.
“Seven or eight years ago, there was really a bubble,” said Richard Green, director of the Lusk Center for Real Estate at the University of Southern California. “Now it’s just good real estate where values are returning to near past peaks.”
Every part of the Bay Area has seen gains in the past year, with Silicon Valley leading the way. But parts of Contra Costa and Alameda counties, where subprime lending was heavy, are still far below their peaks.
The recovery has pulled many homeowners out from underwater — when houses are worth less than the mortgage — and convinced others it may finally be time to sell and move to bigger homes. They’re diving into a fast-moving market in which homes can sell in a day for more than the asking price
Fixed Rates Move into Record-Low Territory, DSNews, By: Tory Barringer, 05/02/2013
“Mortgage rates have fallen for seven consecutive weeks, to levels that are at, or near, record lows,” Bankrate said in a release.
Bay Area Home Sales Dip Below 2012 Level Again; Median Sale Price Rises, DSNews, April 18, 2013
Bay Area home sales fell below a year earlier for the second consecutive month in March as demand continued to outstrip supply in many markets. While low-end sales fell sharply compared with March 2012, $500,000-plus transactions jumped, helping to push the median sale price up on a year-over-year basis for the 12th consecutive month, a real estate information service reported.
It appears that well over half of the 21.8 percent year-over-year increase in March’s median sale price reflects rising home prices. It’s Economics 101: Prices go up as growing demand meets an exceptionally low supply of homes for sale. However, a portion of the March median’s year-over-year gain reflects a change in market mix – sales of low-cost distress homes have fallen sharply, while sales of pricier move-up homes have shot up.
“Higher sales in the middle and top of the housing market reflect improved consumer confidence, ultra-low mortgage rates and the unleashing of more pent-up demand than many anticipated. There’s been a shift in psychology, where more people worry prices will rise and fewer fear a decline. It’s drawn a lot of folks off the fence following a long stretch of sub-par sales, especially in the higher price ranges. In the more affordable markets, we’ve seen a big drop in foreclosures, which limits the supply of homes for sale. Then you have homeowners who still can’t sell because they owe more than their homes are worth,” said John Walsh, DataQuick president.
“The more prices rise, though, the more likely we’ll see a lot more people put their homes on the market,” Walsh added. “There’s pent-up demand among potential sellers, too, and many will try to move as soon as it makes sense. A substantial jump in inventory would at least moderate home price growth.”
SF Gate: Bay Area home-sales price rises (by Carolyn Said)
May 8, 2013 by chrisk · Leave a Comment
“Realtors, buyers and sellers report that an extremely limited supply of homes for sale continues to be the story of the day. ”It’s crazy,” said Glen Bell of Betters Homes & Gardens/Mason-McDuffie Real Estate in Berkeley. “In the 38 East Bay cities I track, we are sitting on an 18-day supply of homes for sale – typically it would be three or four months.” Right now, that 38-city area has 1,400 homes listed. Normally, it should have between 4,000 and 7,000 homes for sale, he said.”
Read more: http://www.sfchronicle.com/realestate/article/Bay-Area-home-sales-price-rises-4446763.php
February ’13 Numbers
March 13, 2013 by Glen Bell · Leave a Comment
Glen’s Numbers 2/28/2013
After 20 consecutive months of seeing a decline in inventory, February signaled the second month in a row of a slight increase in the number of available homes for sale. Although, this is somewhat typical for this time of year, we are hoping that this continues to be the start of a trend lasting long into spring and summer.
Despite the positive signs of a return to normal levels, the effects of these lower inventory numbers will still carry through for several months. With fewer homes to sell, less homes go into contract resulting in a lower number of sales. The next topic of conversation in the coming months will be “why have sales dropped?” They’ll be some who will interpret that as a weakness in the housing recovering and the overall economy in general. However, it will be more a reflection of the “supply and demand” principals and a lack of inventory. February sales totaled only 1,513 homes. I had to go back to the beginning of 2008 to find numbers that were lower than this.
I believe the comments below in Stephen Butler’s editorial give a sound assessment of our housing market at this time.
- Our inventory for the East Bay (the 38 cities tracked) is now at 1,510 homes actively for sale, up from the December low of 1,086 homes. We’re used to seeing between 5,000 to 8,000 homes in a “normal” market in this area.
- The month’s supply for the combined 38 city area is now at 21 days up from the December low of just 15 days. Historically, a 4 to 5 months supply is considered normal for this area.
- Our Pending/Active Ratio decreased to slightly under 3. This is the 12th month in a row that the ratio has been above 2, still signaling a strong seller’s market. (Keep in mind that this number is overstated due to the large number of short sales that remain in pending status for longer periods than normal).
- Distressed properties, (REOs and Short Sales), are still a large part of our local markets but still declining. 21% of the active listings, 55% of our pending sales (primarily due to the large number of short sales – 48%), and 38% of the sales over the last 4 months have been distressed properties.
Click here for a complete copy of Glen’s Numbers (February 2013)
Recent News
Reading between the lines on housing price boom | Stephen J. Butler, 3/1/2013
The current nationwide boom in housing prices illustrates some important investment fundamentals that have little to do with housing. For one thing, a basic commodity that undergoes a price collapse will exhibit a “snapback” in values with a speed that will take most experts by surprise. It wasn’t that long ago when experts were predicting a “second round” of foreclosures that would “dwarf” the original collapse back in 2008. Apparently, that isn’t going to happen.
A recent article in Bloomberg Businessweek offers statistics on the recent housing boom in major U.S. markets. Year-over-year median housing prices have increased by 28 percent in San Francisco, 34 percent in Phoenix and 18 percent in Los Angeles.
A rebound in prices this soon after the housing collapse is driven by a low inventory of homes for sale. This, in turn, has been caused by a four-legged stool of influences. First, foreclosed homes went on the market quickly in many places, and investors with cash bought them to rent out, which reduced supply of available homes for sale.
Next, underwater homeowners or people with time to wait for the “snapback” are reluctant to put their homes on the market, which further reduced supply.
Then, for all practical purposes, there have been no new homes built for the past five years.
And finally, mortgage interest rates are at an all-time historical low, which allows buyers to spend more on a home — if they can find one for sale.
Obviously, this combination of factors is fueling the rise in prices we have seen recently.
Not many saw this coming. Most of the people I know in the housing industry were saying a year ago that foreclosures would continue to dampen the market and that it would take several more years before that bad influence had run its course. What this shows us is the extent to which several influences, as previously mentioned, all combine to create a positive sea change. It is impossible to predict the net effect of these variables, which is why we shouldn’t bother to try.
What’s easy for many of us to forget is that housing is first and foremost a place to live. Setting aside the obsession that a home might be worth more than we paid for it someday, anyone could argue that if we just broke even we would be ahead of the game. The net after-tax cost of mortgage interest and property taxes is probably equal to what we otherwise would have paid in rent.
Meanwhile, we have had a place to live and a forced savings program to the extent that we paid off some of the mortgage principal. That’s probably all we should expect of a house.
Looking back a hundred years, long-term home prices have only increased in value by about 3 percent per year — about the same as inflation. Thanks to the gyrations of recent years, home prices have reverted to that 3 percent norm.
It remains to be seen whether we’ll be experiencing “déjà vu all over again,” but if home prices continue to rise, it will create opportunities for older owners to bail out and diversify.
This will leave younger folks with a window of opportunity to gain a piece of the action.
More Consumers Say Now Is a Good Time to Sell | DSNews, Esther Cho, 3/7/2013
In Fannie Mae’s most recent housing survey, consumers maintained their optimism toward home prices, while the share of consumers who said now is a good time to sell reached a record high. However, consumers in the survey were less optimistic about the economy and their own financial situation.
Nearly half, or 48 percent, of respondents in the February survey said they expect home prices to rise in the next 12 months, up from 45 percent in January. On average, consumers expect prices to rise by 2.9 percent over a year, up from 2.4 percent the month before.
Seventy-three percent of respondents said now is a good time to buy, an increase from 69 percent the month before. At the same time, 25 percent also believe now is a good time to sell, the highest level since the survey’s June 2010 inception.
“Despite fiscal headwinds and political uncertainty, consumer sentiment toward housing is robust and continues to gather strength,” said Doug Duncan, SVP and chief economist at Fannie Mae. “We expect home prices to firm further amid a durable housing recovery, gradually reducing the population of underwater borrowers and helping to boost the share of consumers who say that now is a good time to sell.”
Zillow: Top-Tier Homes Lead Inventory Crunch | DSNews, Tory Barringer, 3/7/2013
Inventory shortage continues to darken the skies over the housing market as the spring selling season approaches, Zillow reported Thursday.
Zillow observed a 16.6 percent year-over-year decline in its overall number of listed homes in late February, indicating an inventory crunch just as buyers start to feel more comfortable dipping their toes into the market.
Nationwide, the greatest year-over-year inventory declines were among more expensive homes, with the availability of top-tier properties falling 20.5 percent on an annual basis. That was followed by middle-tier homes (which saw a 17.2 percent inventory reduction) and bottom tier homes (9.1 percent).
Meanwhile, California’s larger metros reported the greatest decreases in for-sale homes over the past year. Among the 30 largest metros covered by Zillow, four of the top five in inventory contraction call California home: Sacramento (down 48 percent); Los Angeles (down 45.7 percent); San Francisco (down 40.9 percent); and San Diego (down 39.4 percent).
“The supply of for-sale listings continues to dry up, driven in part by potential sellers trapped in negative equity and homeowners that won’t sell out of fear they won’t be able to find a suitable home to buy later,” said Dr. Stan Humphries, Zillow’s chief economist.
Capital Economics Revises Home Price Forecast Upward | DSNews, Krista Franks Brock, 3/8/2013
Strong demand and tight inventory have brought existing home sales back to “normal” levels, and further gains are possible, according to the latest market report from Capital Economics. Additionally, market conditions may prompt lenders to “loosen the purse strings slightly” and lend a little more freely.
These conditions, combined with broader economic indicators, lead Capital Economics to revise its previous forecast of a 5 percent price gain this year up to 8 percent. Next year’s projection is a smaller 4 percent gain.
Existing home sales will rise to 5.1 million this year, and new home sales will rise to 0.5 million, up from last year’s 4.7 million and 0.4 million, respectively, according to Capital Economics’ projections. Sales in both categories will rise even further next year.
Mortgage rates, which have risen slightly, will not impede sales, according to the firm. Rates may fall again throughout the rest of the year, but even with recent increases affordability remains high.
The type of inventory on the market is in a transition mode as fewer foreclosures take place. “[M]ore homes that, a few years ago, would have come onto the market as foreclosures are now coming onto the market as short sales,” Capital Economics said.
January ’13 Numbers
February 13, 2013 by Glen Bell · Leave a Comment
Glen’s Numbers 01/2013
After 20 consecutive months of seeing a decline in inventory, January finally brought us a slight increase in the available homes for sale. Although, this is somewhat typical for January, we are hoping that this is the start of a trend into spring and summer.
Despite the positive signs of a possible return to normal levels, the effects of these lower inventory numbers will carry through for several months. With fewer homes to sell, less homes go into contract resulting in a lower number of sales. The next topic of conversation in the coming months will be “why have sales dropped?” They’ll be some who will interpret that as a weakness in the housing recovering and the overall economy in general. However, it will be more a reflection of the “supply and demand” principals and a lack of inventory.
- Our inventory for the East Bay (the 38 cities tracked) is now at 1,258 homes actively for sale, up from December numbers by approximately 16% but in realty an increase of only 172 homes.
- The month’s supply for the combined 38 city area is now at 18 days. Historically, a 4 to 5 months supply is considered normal for this area.
- Our Pending/Active Ratio decreased to 3.5. This is the 11th month in a row that the ratio has been above 2, still signaling a strong seller’s market. (Keep in mind that this number is overstated due to the large number of short sales that remain in pending status for longer periods than normal).
- Distressed properties, (REOs and Short Sales), are still a large part of our local markets but still declining. 23% of the active listings, 61% of our pending sales (primarily due to the large number of short sales – 52%), and 38% of the sales over the last 4 months have been distressed properties.
Downloadable version of Glen’s Numbers
Recent News
Look who paid cash for Bay Area homes last year
Contra Costa Times, By Pete Carey 2/7/2013
Buyers seeking “the deal of a lifetime” paid cash in record numbers for homes and condos in the Bay Area last year, according to a report released Wednesday by the real estate information company DataQuick.
There were at least twice as many cash buyers in 2012 as there are in an average year in the East Bay, Peninsula and South Bay, the company said, reflecting a sharp change from the usual mix of buyers
But in 2012, a quarter to nearly a third of all sales of existing single-family homes in the region were to cash buyers. A third to half of condos that changed hands went for cash, the company reported.
Across California, about 28 percent of cash sales last year were to buyers of two or more properties, DataQuick said, for a total of 41,450 homes.
“It’s difficult to compete with buyers who are all-cash or who make down payments that are 50 percent or more cash,” said Tony Sum, a real estate agent who specializes in Silicon Valley condos.
Cash deals are “definitely a problem” for first-time buyers, said Suzanne Yost, past president of the Silicon Valley Association of Realtors. “With all the multiple offers and cash buyers, it’s eliminating a lot of first-time buyers from the market, or making it more difficult for them,” she said.
Statewide, 45 percent of condo sales were for cash, the company said, compared with 31 percent of the sales of existing single-family homes.
Cash accounted for a record 32.4 percent of overall home sales, up from 30.4 percent in 2011 and double the average of 15.6 percent. The previous record was set in 2011
Fiserv Case-Shiller Home Price Insights: Home Prices Are Increasing; Many U.S. Markets Now on Path Toward Sustainable Recovery
November 28, 2012
- 2012 Spring/Summer real estate market strongest since peak of housing bubble
- Home prices nationwide projected to increase 3.3 percent annualized between Q2 2012 and Q2 2017
- However, “fiscal cliff” poses short-term threat to growth in housing demand in early 2013
Rising sales, low supply push San Francisco housing up by 12.7% in December.
The data “show a broad-based recovery in housing activity and prices across the country,” said Michael Gapen, an economist at Barclays Capital. “We expect this housing recovery to continue in the coming years.”
Despite the increases, prices nationwide are still about 30 percent below the peak they reached at the height of the housing bubble in the summer of 2006. They are now at the same level as in the fall of 2003.
Stable job gains and record-low mortgage rates have encouraged more people to buy homes. And the limited inventory of homes for sale has made builders more confident to step up construction. The number of previously occupied homes has fallen to an 11-year low.
Millions of homeowners still owe more on their mortgages than their homes are worth, making it difficult for them to sell. That’s one reason the supply of homes is so tight. But higher home values are lowering the number of those “under water” and should encourage more homeowners to put their homes on the market.
More people are also moving out on their own after living with friends and relatives in the recession. That’s driving a big gain in apartment construction and also pushing up rents. Higher rents are encouraging investors to buy homes and rent them.
Bay Area housing prices show big rise in December
By Steve Johnson; January 16, 2013
In a further sign of the housing market’s revival, the median price of existing single-family Bay Area homes in December jumped nearly 24 percent from a year ago on modestly improved sales, according to a report Wednesday.
“There is a big shift going on regionally,” said Andrew LePage of the real estate information service DataQuick, which issued the report. While sales of relatively inexpensive homes have been limited, because such houses are in short supply, “the mid-to-high end is picking up and getting back to a more normal level of activity.”
The median price paid in the nine-county Bay Area hit $470,000, up from $380,000 in December 2011. The last time it rose at a faster rate was in May 2010, when it increased nearly 29 percent, LePage said, adding that the median price in December was the highest it has been for any month since July 2008, when it was $485,000.
The median price rose about 22 percent to $650,000 in San Mateo County, 21 percent to $602,500 in Santa Clara County, 23 percent to $449,000 in Alameda County and 29 percent to $330,000 in Contra Costa County.
The most the Bay Area’s median price has ever been was in July 2007, when it hit $738,500. That was just before the housing market collapsed, plunging the price to a low of $295,000 in March 2009.
Rate of Recovery for Bay Area Real Estate Speeds Up
January 16, 2013
La Jolla, CA.–The pace at which the Bay Area housing market is making up for lost ground quickened at the end of 2012 as sales increased year-over-year for the 18th month in a row and the median price rose at its fastest rate in more than 25 years. The market remained constrained by a tight supply of homes for sale and a fussy home loan environment, a real estate information service reported.
The 32.0 percent year-over-year increase in the median is the highest in DataQuick’s statistics, which go back to 1988. At least half that increase is due to a change in market mix, with sales shifting away from low-cost distress homes toward more mid-market and move-up homes.
The median reached a high of $665,000 in June/July 2007 and then fell to a low of $290,000 in March 2009. On a year-over-year basis it dropped more than 30 percent each month from August 2008 through May 2009. At the median’s current rate of increase, sometime this spring it will have recovered about half of its loss since its summer 2007 peak.
“Prices are in the midst of bouncing off bottom right now, and nobody really knows what the trajectory of this bounce will be beyond this point. So far, supply has been a bottleneck, but as prices go up, more homes will be put up for sale,” said John Walsh, DataQuick president.
“Another bottleneck these days is that mortgage lenders are swamped. Not only by home buyers, but by homeowners who want to refinance. Rising home prices also mean higher appraisals, and tens of thousands of homeowners who couldn’t refinance half a year ago, now can,” Walsh said.
Indicators of market distress continue to decline. Foreclosure activity remains high by historical standards but well below peak levels reached three years ago. Financing with multiple mortgages is low, down payment sizes are stable, DataQuick reported.
|
SalesVolume |
MedianPrice |
|||||
| All homes |
Dec-11 |
Dec-12 |
% Chng |
Dec-11 |
Dec-12 |
% Chng |
| Alameda |
1,584 |
1,623 |
2.5% |
$328,000 |
$410,000 |
25.0% |
| Contra Costa |
1,534 |
1,530 |
-0.3% |
$259,000 |
$333,500 |
28.8% |
| Marin |
280 |
291 |
3.9% |
$517,818 |
$660,750 |
27.6% |
| Napa |
132 |
129 |
-2.3% |
$317,500 |
$350,000 |
10.2% |
| Santa Clara |
1,611 |
1,822 |
13.1% |
$440,000 |
$544,500 |
23.8% |
| San Francisco |
499 |
646 |
29.5% |
$594,500 |
$720,000 |
21.1% |
| San Mateo |
602 |
626 |
4.0% |
$500,000 |
$600,000 |
20.0% |
| Solano |
714 |
610 |
-14.6% |
$182,250 |
$218,000 |
19.6% |
| Sonoma |
538 |
555 |
3.2% |
$279,500 |
$345,000 |
23.4% |
| Bay Area |
7,494 |
7,832 |
4.5% |
$335,500 |
$442,750 |
32.0% |
Source: DataQuick, www.DQNews.com
Foreclosures in dramatic January drop across Bay Area
By Pete Carey, February 12, 2013
Banks began fewer foreclosures in the Bay Area in January than any time since 2006 as they changed gears from auctioning off homes to helping borrowers keep them or sell them for less than they owe, according to a report released Monday.
Schnapp said the drop in foreclosures “is kind of a double-edged sword. The unintended consequence is that you have no inventory of homes for sale, which is acute in California.”
Glen’s Numbers — December 2012
January 21, 2013 by Glen Bell · Leave a Comment
I keep expecting us to change course, but month after month, we continue to see a decrease in the number of homes that are available to buy.
Listening to agents and brokers who have been in the business for years, most are stating we’re seeing our lowest level in years if not ever. Finding the right home to buy has become a real challenge, but given the historic low interest rates being offered, it’s a real opportunity for buyers that are able to get in.
Competition for such a limited supply has brought us upward pressure on prices.
- This is the 20th consecutive decline in inventory for the East Bay (the 38 cities tracked) and we are now at 1,086 homes actively for sale. This is the lowest level since July of 2005 when I first began tracking numbers. To give you some perspective; the high point was in July 2007 at 13, 053 Active Listings.
- The month’s supply for the combined 38 city area is now at 2 weeks. Historically, a 4 to 5 months supply is considered normal for this area.
- Our Pending/Active Ratio increased to the highest level I’ve seen, 4.4. This is the 10th month in a row that the ratio has been above 2, and the first time we’ve seen a number over 4, signaling a strong seller’s market. (Keep in mind that this number is overstated due to the large number of short sales that remain in pending status for longer periods than normal).
- Distressed properties, (REOs and Short Sales), are still a large part of our local markets but declining. 30% of the active listings, 63% of our pending sales (primarily due to the large number of short sales – 55%), and 38% of the sales over the last 4 months have been distressed properties.
Recent News
Survey: Consumers Grow in Optimism Toward Home Prices
By: Tory Barringer 01/07/2013
Uncertainty over the fiscal cliff negotiations did little to shake consumers’ confidence about housing in December, according to the results from Fannie Mae’s latest National Housing Survey.
Consumers continued to show increased optimism toward home price, rental price, and mortgage rate expectations, a sign that home purchase activity may see a boost in the coming months.
“Combined with consumers’ growing mortgage rate and rental price increase expectations, the positive home price outlook could incentivize those waiting on the sidelines of the housing market to buy a home sooner rather than later and thus support continued housing acceleration,” said Doug Duncan, SVP and chief economist at Fannie Mae
Fitch: Price Growth Not Driven by Fundamentals
By: Esther Cho 01/04/2013
Despite the steady increase in home prices in 2012, Fitch Ratings says it “remains cautious” in its outlook on home values.
According to a report from the ratings agency, home prices have risen “at their greatest pace since 2005,” but in certain markets, technical factors rather than “fundamentals” acted as the driving force behind the price gains over the past few quarters.
Fitch explained technical factors such as low mortgage rates, the tight supply of existing homes for sale, and weak levels of new home construction are leading to affordability and driving demand while “offsetting weak fundamentals.” Weak fundamentals include issues such as unemployment and unimpressive wage growth.
In addition, Fitch stated it believes price movement is “highly dependent on the pace of distressed sales and liquidations.”
Fitch warned “short-term price movements can be misleading when the impact of distressed properties has been withheld from the market.”
If liquidations continue at their current pace, Fitch estimated it would take 34 months to clear out the inventory of serious delinquencies, down from 44 months a year ago.
“While positive, the improvement masks those markets with disproportionately large inventories that have yet to be cleared and where double-digit price declines are projected,” the report noted.
Mortgage Debt Relief Act Extended for Another Year
By: Esther Cho 01/02/2013
Struggling homeowners who are considering a short sale or modification will be eligible for tax relief in 2013.
The “fiscal cliff bill” passed by Congress on January 1 included a provision to exclude borrowers from paying taxes on debt forgiven through a short sale, foreclosure, or loan modification.
Glen’s Numbers — November 2012
December 13, 2012 by Glen Bell · Leave a Comment
I keep expecting us to change course, but month after month, we continue to see a decrease in the number of homes that are available to buy. We are now in our 19th consecutive decline of inventory for the East Bay (the 38 cities tracked), with only 1,584 homes actively for sale. We now have only a 3 week supply.
Listening to agents and brokers who have been in the business for years, most are stating we’re seeing our lowest level in years if not ever. Finding the right home to buy has become a real challenge, but given the historic low interest rates being offered, it’s a real opportunity for buyers that are able to get in.
Competition for such a limited supply has brought us upward pressure on prices. However we’re still well below the peaks we saw in 2007. As a means of being able to take a closer look at our local markets, I ran some numbers for Berkeley (October) and Oakland (November), both of which are attached.
You can download an entire copy of Glen’s Numbers through November 2012 here
Recent News
Yearly Price Gains Continue into Offseason for Home Buying
DSNews by Esther Cho, December 4, 2012
Compared to 2011, home prices continued to show strong gains in October and posted their biggest yearly increase since June 2006, according to data from CoreLogic.
Home prices—including distressed sale—climbed 6.3 percent higher year-over-year in October, marking the eighth consecutive month of yearly gains. Distressed sales include transactions for REOs and short sales.
“The housing recovery that started earlier in 2012 continues to gain momentum,” said Mark Fleming, chief economist for CoreLogic, in a release. “The recovery is geographically broad-based with almost all markets experiencing some appreciation.”
REO Sales Diminish to Under 20% of Overall Home Sales: Clear Capital
DSNews, by Carrie Bay, December 4, 2012
Clear Capital released a new market report Tuesday, tracking home prices through the end of November. Nationally, quarterly price gains were cut by more than half compared to readings from the month before. For November, home prices edged up just 1 percent.
Californians’ optimism rises after election
December 5, 2012, by Joe Garofoli of the San Francisco Chronicle
Californians more upbeat about state Nearly half of residents surveyed think the state is headed in the right direction after voters last month approved a measure to increase taxes.
Glen’s East Bay Housing Numbers — Through October 2012
November 20, 2012 by Glen Bell · Leave a Comment
There’s just not enough homes to buy and more people are entering the market. Buyers are recognizing the opportunity; The economy is showing some signs of improvement.
We’ve reached our bottom on prices earlier this year. However, they are still well below their peaks in 2007.
Interest rates are incredibly low,……. record lows!
Affordability is now a big factor and a reality for many.
Investors are encouraged by positive cash flow opportunities.
Listening to agents and brokers who have been in the business for years, most are stating we’re at our lowest levels in years if not ever. Finding the right home to buy has become a real challenge.
All this competition from so many looking for so few has brought upward pressure on prices. How high have prices come up this year, depends on how we look at the numbers. Comparing median prices, although a popular means, is only one way. What’s being sold now, the “mix,” is just as important. We’re seeing far fewer distressed properties (REO and Short Sale), typically the lower priced homes. More mid to high end homes, “equity” sales are being listed.
What’s coming in the months ahead? We probably won’t see any substantial increase in inventory. Distressed properties probably won’t be much of a factor. From what I’m hearing, only a modest increase in interest rates is in store for us next year. I think we’ll remain in a seller’s market for awhile. At the same time, it’s still an amazing opportunity for those buyers that are able to get in.
This is the 18th consecutive decline in inventory for the East Bay (the 38 cities tracked) and we are now at 1,851 homes actively for sale. This is the lowest level since July of 2005 when I first began tracking numbers. To give you some perspective; the high point was in July 2007 at 13, 053 Active Listings.
The month’s supply for the combined 38 city area is now at 3.5 weeks. Historically, a 4 to 5 months supply is considered normal for this area.
Our Pending/Active Ratio increased to the highest level I’ve seen, 3.2. This is the 8th month in a row that the ratio has been above 2, signaling a strong seller’s market. (Keep in mind that this number is overstated due to the large number of short sales that remain in pending status for longer periods than normal). Distressed properties, (REOs and Short Sales), are still a large part of our local markets but declining. 25% of the active listings, 64% of our pending sales (primarily due to the large number of short sales – 56%), and 39% of the sales over the last 4 months have been distressed properties.
You can download an entire copy of Glen’s Numbers through October 2012 here
Recent News
Bay Area Home Sales and Prices Up November 14, 2012
The number of homes sold in the Bay Area increased on a year-over-year basis for the sixteenth month in a row in October while the median price paid rose for the sixth month, the result of a gradual rebalancing of the real estate market. Last month sales continued to fall below year-ago levels in the lower price categories and rise sharply in the middle and high end of the market. October transactions below $300,000 fell 15.2 percent compared with a year earlier, while sales in the $400,000 to $800,000 range rose 25.7 percent, and deals above $800,000 jumped 47.1 percent from last October. “We’re still watching the market regain the ground it lost after 2007. It’s unclear exactly much of today’s apparent price increase reflects actual growth, and how much reflects a change in market characteristics. The two factors obviously play into each other. We’re definitely seeing less distress and foreclosure activity, and more mid- to up-market sales. Supply is limited, and getting through the mortgage process is still rough,” said John Walsh, DataQuick president.
Threat of Shadow Inventory Fades as Delinquencies, Foreclosures Decline By: Esther Cho, 11/15/2012
The percent of loans in foreclosure, or the foreclosure inventory rate, fell to the lowest level since the first quarter of 2009, according to the latest delinquency survey from the Mortgage Bankers Association (MBA).
Freddie Mac Paints Realistic Picture of a ‘Healthy’ Market By: Tory Barringer, 11/14/2012
The housing market is slowly but surely getting back up to speed, but don’t expect it to recover to peak levels, Freddie Mac says in its latest U.S. Economic and Housing Market Outlook. “What a healthy housing market should look like will dismay those who keep comparing housing to what it was during its peak years,” Freddie Mac VP and chief economist Frank Nothaft said. “However, taking into account recent trends, key housing indicators and the shifting demographic patterns that will define a new and realistic trajectory toward a healthy housing market, the long-term prognosis is promising—just don’t expect the housing market to wake up at 98.6 degrees tomorrow morning.
Glen’s East Bay Housing Numbers – Through August 2012
September 7, 2012 by Glen Bell · Leave a Comment
The latest edition of Glen’s East Bay Housing Numbers are in and here’s what I found.
• This is the 16th consecutive decline in inventory for the East Bay (the 38 cities tracked) and we are now at 2,329 homes actively for sale. This is the lowest level since July of 2005 when I first began tracking numbers. To give you some perspective; the high point was in July 2007 at 13, 053 Active Listings.
• The month’s supply for the combined 38 city area is now at 1 month. Historically, a 4 to 5 months supply is considered normal for this area.
• Our Pending/Active Ratio eased slightly to 2.79, due to the drop in pending sales as well. This is the 6th month in a row that the ratio has been above 2, signaling a strong seller’s market. (Keep in mind that this number is overstated due to the large number of short sales that remain in pending status for longer periods than normal).
• Distressed properties, (REOs and Short Sales), are still a large part of our local markets but declining somewhat. 26% of the active listings, 66% of our pending sales (primarily due to the large number of short sales – 58%), and 42% of the sales over the last 4 months have been distressed properties.
As always, I’m available if you want to talk about the market, or explore your options for buying, selling or investing in East Bay real estate. You can reach me directly at 510.333.4460.
You can download an entire copy of Glen’s Numbers through August 2012 here
Other Recent News
Median Days Listed Shortens as Inventory Tightens: NAR – DQNews: 9/5/2012, Esther Cho
Homes are spending less time on the market as supply conditions tighten, according to a report from the National Association of Realtors (NAR) released Wednesday.
Looking ahead, Yun said, “Our current forecast is for the median existing home price to rise 4.5 to 5 percent this year and about 5 percent in 2013, which is somewhat stronger than historic norms because of the inventory shortfall that is most pronounced in the low price ranges.”
Bay Area Home Sales and Prices Continue Upward Trend - DSNews August 15, 2012
“The market has really been lopsided the past couple of years, tilted toward low-end bargain chasing. Now it’s re-balancing, slowly, with increased activity in mid and move-up markets. But mortgage availability remains one of the big challenges in the Bay Area,” said John Walsh, DataQuick president.
It appears that roughly half of the 12.6 percent year-over-year gain in July’s median sale price can be attributed to a shift in market mix, where the overall regional median is tugged up by a higher share of sales occurring in the mid-to-upper price ranges. In July, price levels for the lowest-cost third of the Bay Area’s housing stock rose 9.6 percent year-over-year, while they rose 7.8 percent in the middle and increased 1.2 percent in the top third of the market.
Ten States with the Biggest Foreclosure Discounts: RealtyTrac - DQNews: 9/5/2012, Esther Cho
While RealtyTrac found that the nationwide average for foreclosure discounts is 31.74 percent, there are some states that are much more generous.
That being said, here are the states with the biggest foreclosure discounts, along with their average foreclosure sales price, according to RealtyTrac findings.
1. Massachusetts (47.09%) ($193,993)
2. Kentucky (46.33%) ($85,863)
3. Connecticut (45.40%) ($173,022)
4. Rhode Island (43.97%) ($123,648)
5. Ohio (43.01%) ($75,797)
6. Louisiana (41.99%) ($107,239)
7. Delaware (41.93%) ($132,142)
8. Illinois (41.09%) ($130,454)
9. California (41.05%) ($248,676)
10. Georgia (40.07%) ($104,561)
Fewer Foreclosures in July as Servicers Seek Alternatives: CoreLogic - DQNews: 8/28/2012, Esther Cho
The number of completed foreclosures saw declines both monthly and yearly, according to the most recent foreclosure report from CoreLogic.
Mark Fleming, chief economist for CoreLogic, explained servicers are seeking options outside of foreclosure.
“Completed foreclosures were down again in July, this time by 16 percent versus a year ago, as servicers increasingly rely on alternatives to the foreclosure process, such as short sales and modifications,” said Fleming.
“The decline in completed foreclosures is yet another positive signal that the housing market is continuing on a progressive path of stabilization and recovery,” said Anand Nallathambi, president and CEO of CoreLogic.
Glen’s East Bay Housing Numbers – Through July 2012
August 10, 2012 by Glen Bell · Leave a Comment
I wanted open up with a quote from the following article:
Lack of Inventory Blamed for June’s Dip in Pending Home Sales – Mark Lieberman, Five Star Institute Economist 07/26/2012
Lawrence Yun, NAR chief economist, blamed a lack of inventory for the drop in the index.
“Buyer interest remains strong but fewer home listings mean fewer contract signing opportunities,” he explained. “We’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors.”
“Housing starts will likely need to double over the next two years to satisfy the pent-up demand for both rentals and ownership.”
- This is the 15th consecutive decline in inventory for the East Bay (the 38 cities tracked) and we are now at 2,414 homes actively for sale. This is the lowest level since July of 2005 when I first began tracking numbers. To give you some perspective; the high point was in July 2007 at 13, 053 Active Listings.
- The month’s supply for the combined 38 city area is now at 1.1 months. Historically, a 4 to 5 months supply is considered normal for this area.
- Our Pending/Active Ratio eased slightly to 2.82, due to the drop in pending sales as well. This is the fifth month in a row that the ratio has been above 2, signaling a strong seller’s market. (Keep in mind that this number is overstated due to the large number of short sales that remain in pending status for longer periods than normal).
- Distressed properties, (REOs and Short Sales), are still a large part of our local markets but declining somewhat. 28% of the active listings, 66% of our pending sales (primarily due to the large number of short sales – 56%), and 43% of the sales over the last 4 months have been distressed properties.
As always, I’m available if you want to talk about the market, or explore your options for buying, selling or investing in East Bay real estate. You can reach me directly at 510.333.4460.
You can Download a copy of Glen’s Numbers here..
Other Recent News
Bay Area home prices hit four-year high in June -The Street/San Jose Mercury News
Bay Area home sales in June erased any doubt that it’s a sellers’ market, with some frantic buyers even sweetening their offers with a timeshare vacation or a couple of months of free rent.
Real estate agents said low inventory is driving up prices in some areas as people try to outbid each other for more expensive homes while ultralow interest rates are drawing in first-time homebuyer.
Part of what is driving up the median price is a shift in the mix of homes for sale, with a greater number of expensive houses on the market and fewer foreclosures.
Case-Shiller Jumps a Record 2.2% in May – Mark Lieberman, Five Star Institute Economist
Home prices rose sharply in May cutting the year-year drop in prices to 0.7 percent from 1.8 percent in April, Standard & Poor’s reported Tuesday in its Case-Shiller Home Price Index. Prices in the 20 cities surveyed rose 2.2 percent month-month, the strongest month-month gain since the 20-city index began in January 2000. Prices rose 3.9 percent in San Francisco.
Housing Starts Rise 6.9 Percent in June – NAHB, July 18, 2012
“This is one more piece of evidence that housing is starting to take back its traditional role of leading the nation out of recession, and tracks with our forecast for continued improvement in new construction through the end of this year,” said NAHB Chief Economist David Crowe. “While many challenges continue to weigh down the housing recovery – including those related to builders’ and buyers’ access to credit, poor appraisals and the number of distressed properties in certain markets – production of single-family homes is now the strongest it has been since 2010 due to rising consumer demand brought on by improving market conditions.”
Number of California homes entering foreclosure falls to 2007 levels – Alejandro Lazo, LA Times, July 23, 2012
An improving housing market and fewer bad loans helped bring new California foreclosure actions in the second quarter to their lowest level since early 2007 while the number of homes lost to foreclosure plunged, fresh data show.
DataQuick President John Walsh said in a statement that it was unclear whether the drop in the number of homes entering the foreclosure process was a sign that the worst was over or simply that the process itself had slowed.
“The foreclosure process has always been the sanitation department of the housing sector,” he said. “The question is whether these lower … numbers mean that there’s less distress to process, or if we’re just seeing distress get processed at a slower pace.”
The number of homes being lost to foreclosure plunged. The number of trustee deeds, which are the public documents filed when a foreclosure is completed, fell 27.8% from the prior quarter and were down 48.5% from the same period as last year. A total of 21,851 deeds were filed last quarter.
Shortage of Homes for Sale Sparks Higher Home Prices in Bay Area -Traditional Homebuyers Compete Against Investors with Cash BHG Qtr2-2012 Market Reports – Highlights of the Bay Area Market Report
Sales: In the nine-county Bay Area, 15,540 existing, single-family detached homes changed hands, a 36 percent jump from 11,397 in the first quarter and up 7 percent from 14,533 homes sold in the second quarter of 2011.
Pricing: The median selling price of a Bay Area home was $577,546 for the quarter, up 24 percent from $464,878 in the first quarter and 9 percent higher than last year’s second-quarter median price of $527,834.
Days on Market: Homes are selling in near-record time. For the Bay Area as a whole in the second quarter, houses were on the market an average of only 61 days before attracting an offer to purchase, down from 67 days during the same quarter a year ago. Average days on market ranged from a low of 41 in Alameda, San Francisco and Santa Clara counties to a high of 91 days in Napa County.
Prices See First Yearly Gain Since 2007, Foreclosures Wane: Zillow – Esther Cho, DS News 07/24/2012
“After four months with rising home values and increasingly positive forecast data, it seems clear that the country has hit a bottom in home values,” said Zillow Chief Economist Dr. Stan Humphries. “The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own.
Glen’s East Bay Housing Numbers – Through June 2012
July 11, 2012 by Glen Bell · Leave a Comment
The latest edition of Glen’s East Bay housing numbers are in, and for the 14th Consecutive month, inventory declines along with modest price increases and shorter days on market.
- Inventory for the East Bay (the 38 cities tracked) is now at it’s lowest level since July of 2005. As of 6/30/2012, there were 2,522 homes listed active for sale. To give you some perspective; the low point since I have been tracking numbers was in July 2005 at 2,607. The high was in July 2007 at 13, 053.
- The month’s supply for the combined 38 city area is now at 1.1 months. Historically, a 4 to 5 months supply is considered normal for this area.
- Our Pending/Active Ratio has climbed to 2.89, again signaling a strong seller’s market. This is the fourth month in a row that the ratio has been above 2, a first since I began this process. (Keep in mind that this number is overstated due to the large number of short sales that remain in pending status for longer periods than normal).
- Distressed properties, (REOs and Short Sales), are still a large part of our local markets but declining somewhat. 28% of the active listings, 65% of our pending sales (primarily due to the large number of short sales – 54%), and 47% of the sales over the last 4 months are distressed properties.
Other Recent News
Home Prices Rise In Nearly All Major U.S. Cities – by Christopher S Rugaber in Huffington Post – 06/26/12
Home prices rose in nearly all major U.S. cities in April from March, further evidence of a housing market that is slowly improving even while the job market slumps.
The Standard & Poor’s/Case-Shiller home price index released Tuesday showed increases in 19 of the 20 cities tracked. That’s the second straight month that prices have risen in a majority of U.S. cities.
Home prices rise in ‘glamour cities,’ including by Steve Matthews and Prashant Gopal, Wednesday, June 27, 2012
Home prices are beginning to rise after a six-year slump in cities from San Francisco to Miami, where jobs and activities appeal to younger and affluent buyers.
A tight supply of homes and an increase in affordability fueled by record-low mortgage rates are helping shore up some regional markets where values plunged during the recession. San Francisco’s home prices rose at a 16 percent annual rate in the three months that ended in April, Case-Shiller shows.
Property tax assessments gradually bouncing back – Assessments up in most Bay Area counties, but results are mixed by Carolyn Said, Saturday, July 7, 2012
After several years of downturns, property tax assessments are back up in most Bay Area counties this year, a sign that the beleaguered real estate market is finding stability, even while Silicon Valley firms are in full expansion mode.
“Remember, property values plummeted so low that we haven’t come close to making up the losses we’ve experienced,” said Jean Hurst, legislative representative for the California State Association of Counties. “This is no windfall by any means, but it’s a function of the stabilization and the gradual uptick that economists tell us the recovery will look like.”
Slowing foreclosures will harm housing market by John B. Taylor and Douglas Holtz-Eakin, Monday, July 2, 2012
Across America, but especially in hard-hit California, families are still reeling from the financial and economic fallout of the housing bubble and crash. The top priority should be to restore a strong housing market and growing economy where people can find jobs, restore their finances and make their mortgage payments.
One way or another, that means excess housing has to be cleared off the market as quickly as possible. The vote by the Legislature on Monday that may delay or even stop foreclosures is a counterproductive step in the pursuit of a housing market recovery.
As always, I’m available if you want to talk about the market, or explore your options for buying, selling or investing in East Bay real estate. You can reach me directly at 510.333.4460.
You can download an entire copy of Glen’s Numbers through June 2012 here.
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