Top 10 Cities for First-Time Home Buyers

Top 10 Cities for First-Time Home Buyers—and Not Just Because They’re Affordable

 

OK, let’s get it right out there: It’s a seriously tough time to be trying to buy your first home. Yes, in most respects the housing business is doing great. But the dazzling nationwide sales boom cuts both ways: Across the U.S., low inventory has put the squeeze on potential home buyers, driving prices up to nosebleed-inducing levels and sparking scary bidding wars. And first-time mortgages? They’re harder than ever to snag.

The numbers tell the tale: The National Association of Realtors® reported in November that the share of first-time buyers had declined in 2015 for the third consecutive year and remained at its lowest point in nearly three decades. First-time buyers made up 32% of all buyers in 2015, down from 33% the year before.

So where can today’s committed-but-oh-so-frustrated housing newbies turn?

We’ve got you covered! Bypassing today’s unabashed and unbowed metro seller’s markets (See ya, Seattle! Don’t let the door hit you on the way out, Dallas!), we set out to find  places that are still newbie-friendly. But we weren’t just looking for the cheapest places. Yes, affordability is key, but if you’re doling out your life savings on a new home, you want an area where you’ll actually enjoy living! Right? So we made sure that our top 10 cities bring something extra special to the party, lifestylewise.

We focused on the 25-to-34 age group, which is the vast majority of first-time home buyers. We filtered the 100 largest U.S. metropolitan areas using the following criteria:

  • Affordability, measured by home price to income ratio for 25- to 34-year-olds (the lower the better)
  • Inventory, with enough houses available that you don’t have to camp out at open houses or sell your firstborn to get your chance—measured by the number of homes for sale per 1,000 households
  • Mortgage availability, measured by the share of home loans purchased by 25- to 34-year-olds
  • Job growth, measured by lower-than-average unemployment rate (because unemployment and new homes are a lousy combo)
  • Livability, measured by the number of restaurants, schools, retailers, health care facilities, and arts and entertainment venues per 1,000 households

 

  1. Portland, ME

Median price: $304,000

Unemployment: 3.3%

What you don’t know about Portland: Yeah, sure, the West Coast’s Portland gets all the press, the hipster cred (and notoriety), and even a decent TV show to call its own. But here’s the deal: The largest city in Maine is no less hip, cool, and fun to live in. And it has way better lobster.

A foodist’s paradise nestled on the Atlantic coast, Portland has a slew of catch-of-the-day seafood restaurants and a thriving microbrew scene—Allagash Brewing Co. produces 45,000 barrels of beer each year. And check out that unemployment rate—one-third lower than the national average of 5.2%.

 

  1. Philadelphia, PA

Median price: $222,000

Unemployment: 4.8%

What you don’t know about Philly: Plenty of New Yorkers are fleeing the City So Nice They Named It Twice for Philly, with almost 27,000 people making the transition per year, according to the U.S. Census Bureau. Many seem to relish escaping the crazy real estate prices of NYC without giving up big-city amenities.

So what’s the appeal?

Well, you’ve got Ukee Washington, Denzel‘s second cousin and quite possibly the coolest news anchor in America. You have perhaps the most loyal sports fans in the country. And you can get a “citywide special”—a can of PBR and a shot of Jim Beam—for just a few bucks across town. The United States’ first capital is rich in history and has recovered from a bad patch—no longer known as “Killadelphia,” its violent crime rate declined 20% from 2009 to 2014, according to the FBI.

 

  1. St. Louis, MO

Median price: $164,000

Unemployment: 5.2%

What you don’t know about St. Louis: Besides the Cardinals and the city’s namesake barbecue, there’s plenty more to celebrate in St. Louis.

Led by Washington University, more than a dozen universities and colleges boost the city’s IQ and keep the vibe young. You dig nature? You can spend weeks hanging in Forest Park, which is nearly 50% bigger than Central Park. And the city has two separate downtowns, each with its own gestalt. Housing prices have been low, partly because of the sluggish economy after the recession that erased thousands of jobs. But the city has finally made a comeback, adding 6,900 jobs in February and posting a declining unemployment rate. Eight Fortune 500 companies now call St. Louis home.

 

  1. Allentown, PA

Median price: $188,000

Unemployment: 5%

What you don’t know about Allentown: While the song “Allentown” by Billy Joel reminds us of the decline of the coal and steel industry (and still makes us sob), Allentown is en route to aggressive economic redevelopment.

Today the city hosts multinational companies such as Pennsylvania Power and Light and Air Products & Chemicals. Allentown also has Pennsylvania’s highest beer production by volume, and the Lehigh Valley area makes up the state’s fastest-growing wine region. And contrary to its grungy/gritty rep, there are more acres of parkland here than in any other city of this size. Take that, Billy!

 

  1. Albany, NY

Median price: $238,000

Unemployment: 4.5%

What you don’t know about Albany: The capital of New York state is having a renaissance. The effort to build a “Tech Valley” since 1998 has paid off with thriving new businesses, residential development, entertainment, and a cultural scene. Every spring, Albany celebrates its Dutch heritage with the Tulip Festival, featuring more than 200,000 tulips, fine art shows, crafts, and gardening exhibits. And you haven’t lived until you’ve tried an Albany fish fry. Or at least you haven’t lived well.

 

  1. Harrisburg, PA

Median price: $168,000

Unemployment: 4.2%

What you don’t know about Harrisburg: Tech may not be something this central Pennsylvania city is known for, but it may be in the future. In the past few years, at least 18 tech companies have sprouted in this midsize city. Benefiting from the tech wave, downtown Harrisburg has become a hugely popular northeastern destination stop for great live entertainment, especially music—from jazz to indie to hip-hop.

 

  1. Baton Rouge, LA

Median price: $217,000

Unemployment: 4.8%

What you don’t know about Baton Rouge: With a median age of 34.7 for its population, Baton Rouge is Louisiana’s youngest major metro area (the credit goes to Louisiana State University, which is based there).

About 80 miles from New Orleans, Baton Rouge knows how to do Mardi Gras right. Each year thousands flock to the city for festive carnivals, costume balls, and six different parades (including one just for pets). Increasingly a nouveau hipster haven, the city has the highest share (52%) of mortgages purchased by 25- to 34-year-olds among all the markets we studied.

 

  1. Dayton, OH

Median price: $115,000

Unemployment: 5.2%

What you don’t know about Dayton: Bike culture may be awesomely hip now, but Daytonians have been biking en masse for a long, long time. They drafted the nation’s first regional bikeway plans, which were adopted in 1973. Since then, the 300 miles of scenic Miami Valley Trail—the nation’s largest paved trail network—have seen generations of cyclists. With a median home price of just $115,000, Dayton is no longer a place to fly over or drive through—it’s a place to stay and live large.

 

  1. Minneapolis, MN

Median price: $294,000

Unemployment: 3.9%

What you don’t know about Minneapolis: America’s second fittest city, Minneapolis boasts more than 200 miles of bike lanes and 5,000 acres of parkland. Twelve Fortune 500 companies, including Target, and numerous small businesses keep unemployment low and income high.

America’s (purportedly) most literate city also hosts Open Book, the country’s biggest book art center, and the Chanhassen, its largest dinner theater. And Mary Richards lived here. Questions?

 

  1. Virginia Beach, VA

Median price: $256,000

Unemployment: 5%

What you don’t know about Virginia Beach: Pharrell Williams was born and raised here, and his song “Happy” could easily serve as the official town anthem . After all, with sun-drenched beaches dotted with swimmers, sunbathers, and volleyball players, how could anyone not be happy? Plus, the city’s majority of low-density neighborhoods are perfect for those who hate crowded city living.

———

We’re in such a celebratory mood, we almost hate turning our eyes to the worst markets for first-time home buyers. Almost.

New York and San Francisco, you say? If the two cities had a penny for each time someone complained about their sky-high housing prices, the money could probably fund many buyers’ down payments. But for many people, the excitement and job opportunities of those cities are worth the price.

By our calculation, the worst markets are where climbing home prices and plunging inventory are not sustained by employment and infrastructure—or any real sense of fun. Because fun rules!

Spoiler alert: The bottom five markets are all in California. As Jonathan Smoke, our chief economist, points out, those markets are affected by the “spillover” effect of being in California—filled with people looking for alternatives to Los Angeles and San Francisco.

  1. Stockton, CA

Median price: $340,000

Unemployment: 8.8%

  1. Fresno, CA

Median price: $262,000

Unemployment: 10.5%

  1. Bakersfield, CA

Median price: $222,000

Unemployment: 10.9%

  1. Sacramento, CA

Median price: $428,000

Unemployment: 5.4%

  1. Riverside, CA

Median price: $344,000

Unemployment: 5.8%

What are your thoughts on the subject?

I read this article at: http://www.realtor.com/news/trends/top-10-cities-for-first-time-home-buyers/?identityID=9851214&MID=2016_0415_WeeklyNL-comafter23&RID=353497822&cid=eml-2016-0415-WeeklyNL-blog_1_topcities-blogs_trends

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522

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Connect with us professionally at LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

7 Signs of An Up-and-Coming Neighborhood

I truly enjoyed this article – had to share…

7 Signs of An Up-and-Coming Neighborhood

Live in a town large enough for a time long enough, and you’ll undoubtedly be made privy to a story of the one that got away. The neighborhood that got away, that is – the neighborhood that all the locals saw as down for the count, pshawing away little sprouts of area upturn, until one day the formerly downtrodden district was teeming with new businesses, new residents, new life – and newly high property values, to the advantage of those few brave souls who decided to go all in before the place actually arrived.

Maybe you’re a first-time buyer trying to squeeze every iota of value out of your precious house hunting dollars, or you just love the prospect of being an early settler in your city’s Next Big Neighborhood. In any event, it can be daunting and even scary to try to figure out whether a neighborhood is up-and-coming or down-and-out. Home value increases are an obvious indicator, but by the time values are up it’s often too late to get in on the early advantage of buying in a neighborhood before it’s potential has been realized.

If you’re ready, willing and able to take on the challenge of buying in a diamond-in-the-rough type neighborhood, here are some signs to look for before property values shoot through the roof.

1. On-trend businesses are moving in. In my neck of the woods, when a co-working space, a Whole Foods or a Blue Bottle coffee moves into the neighborhood, it’s a sign that the nature of things might be changing. This is just as true for small, local businesses that attract people with disposable income as it is for businesses that sell the basics with flair. In fact, most larger businesses do a fair amount of economic research and projections on the neighborhood before moving in. Watching big industry and business moves can be a great way to spot emerging areas with strong fundamentals way before you might otherwise be able to see them yourself.

2. Uber-convenient location in a land-impacted metro. If you live in a densely populated metro area – especially one that is coastal – or an urban setting with intense governmental restrictions on building, demand for homes will continue to grow as the population does, but the supply will remain somewhat limited. In many of these situations, neighborhoods that have been downtrodden but have very convenient proximity to employment centers, public transportation, freeways and bridges tend to be prime for whole-neighborhood remodeling in times of population growth or rapid real estate price rises in already-prime areas.

3. Downsides have an expiration date. If there’s one major issue that has caused an area to be less desirable for decades, and that issue is being eliminated or ameliorated, it could set the neighborhood up for a turnaround. For example, striking crime decreases or a major employer moving into the area where none were before can spark a serious real estate renaissance in an area which has some of the other desirable features on this list.

Also, keep in mind that a new generation of home buyers has a new set of values, and might simply not be concerned or deterred by things their parents might have viewed as turn-offs. Living above a commercial unit might have been a deal-killer for my parents, but my son thinks it’s cool – even desirable, depending on the business on the ground floor. Similarly, gritty and urban might not be the descriptors of your dream home, but some twenty-something first-time buyers in major metros are seeking exactly that feel.

4. Architectural themes with a following. Many up-and-coming neighborhoods find themselves pulled by aficionados of the particular type of architecture that characterizes the neighborhood. Often, down-at-the-heels neighborhoods that are riddled with Tudors, Victorians, Spanish-style homes or even Mid-Century Moderns will see a surge of revitalization when a fresh generation of frugal home buyers falls in love with the style and realizes the deals that can be had there vs. other, already prime areas in town.

5. At least one major economic development is brewing. Never underestimate the power of a major economic development to overhaul a neighborhood’s fate. From Google and Microsoft building cloud storage data centers in Des Moines to a new light rail station going live in Denver, one large-scale employer or infrastructure development can be a very early, very strong sign that an area will see it’s real estate fortunes rise. (That said, areas dependent on one near-obsolete employer or industry can see their fates decline rapidly. Look for industry-wide investment in an area, vs. a single company’s investment.)

6. Fixing is in the air. When you see that an area long known for its rundown homes has a number of homes being renovated and rehabbed from the inside out, this can be a sign of fledgling neighborhood turnaround. If you spot these sorts of projects visually, it might be worth taking a trip down to the City Building Permit counter to see whether the staff has seen the same uptick in individual owners’ investment in the area, and if so, what they think the story of the neighborhood might be – or might become. City staffers often have a wealth of information at the ready, everything from pending commercial development applications that could change the whole landscape of an area to projects the city itself has funded or will prioritize due to its own development initiatives.

7. Slow but steady decrease in DOM. Ten years ago, I listed a charming, pristine home on a not-so-charming, less-than pristine street – the location was its fatal flaw, and the place just lagged on the market as a result. Now, Millennials buying their first homes are salivating over that precise location, for its mix of urban feel; new trendy restaurants and yoga studios; and complete convenience to both the subway and the Bay Bridge. In between now and then, though, those who were watching carefully would have noticed how homes that once took 90 days to sell gradually were selling in 45, then in a couple of weeks – and would have noticed that this decline in the number of days an average listing stayed on the market (DOM) occurred way before the home prices themselves increased. A slow, steady decrease in DOM is a smart, early sign that a neighborhood might be poised on the precipice of up-and-coming status. Ask your agent to help clue you in as to where precisely those areas might be, in your town.

BUYERS: Are you looking to move into an up-and-coming neighborhood? If so, what’s your motivation?

SELLERS: Was your neighborhood an up-and-coming one? Share your experience!

I truly enjoy sharing these articles – hope you did too – would love to hear your input!

 

I read this article at: http://tips.truliablog.com/2014/01/7-signs-of-an-up-and-coming-neighborhood/?ecampaign=cnews201401D&eurl=tips.truliablog.com%2F2014%2F01%2F7-signs-of-an-up-and-coming-neighborhood%2F

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office:  650-365-9200

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Connect with us professionally at LinkedIn:  http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008

 

Why 2014 is a Good Year to Buy a Home

Why 2014 is a Good year to buy a home…

If you didn’t buy a home in 2013, you may be kicking yourself now. Home prices climbed nationally an average of 13.6 percent in the past 12 months, according to Tuesday’s release of the Standard & Poor’s/Case-Shiller 20-city home price index.

Don’t make the same mistake in 2014, suggests Benjamin Weinstock, real estate attorney and partner at the firm Ruskin Moscou Faltischek in Uniondale, N.Y.

Market forecasters predict that 2014 will be another year of gains for the real estate market, even though the rapid pace of sales in 2013 cooled off a bit at the end of the year. On Dec. 30, The National Association of Realtors said its pending home sales index, based on contracts signed last month, rose 0.2 percent in November, below the 1 percent rise forecast.

Home prices are expected to rise about 5 percent next year, says Weinstock. Higher mortgage rates will dampen the pace of both sales and price gains, but not bring them to a halt. The average rate on a 30-year fixed mortgage is expected to rise from 4.5 percent to 5 percent in the next year.

Even aside from expected price gains, buying a home is almost always a good investment in the long run, says Weinstock. Tax benefits are not to be overlooked.

“When one rents, at the end of the year he or she has a pile of 12 cancelled rent checks,” Weinstock says. “However, the homeowner has a pile of 12 cancelled mortgage checks that are nearly fully tax deductible in most cases.”

I read this article at:  http://www.cbsnews.com/news/why-2014-is-a-good-year-to-buy-a-home/

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office:  650-365-9200

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Connect with us professionally at LinkedIn:  http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008

 

3 Costly Cases of Hot Market Wishful Thinking – Fabulous Article

I truly enjoyed reading this blog because I’ve been faced with this challenge in my own Real Estate career.  It’s one of the hardest conversations to have.  Please enjoy – and I added my 2 cents in italics.

 

3 Costly Cases of Hot Market Wishful Thinking

 

“Oh, how I wish. . .” started no wise real estate decision ever. There’s a reason they call it real estate, folks. That’s because we’re dealing with the most tangible type of property around – land – and the buildings that, formally speaking, represent improvements to that land.

Attempting to apply fantasy-realm wishes to real-life, real land situations is never a setup for success. But when the market is hot and you have a goal or a timeline, engaging in wishful thinking is not just foolhardy – it can be costly.

As evidence, here are three common, costly cases of wishful thinking that tend to arise in areas where the market is hot, offers are plentiful and prices are rising. Consider these red flags and take heed in the event you find yourself engaging in any of them:

1. Wishing the house you’re seeing was in a different neighborhood. You’ve seen 2 dozens houses, and put in offers on a dozen. No dice. And your agent keeps pushing you to look in a lower price range, assuring you that you can find what you want. And then they show it to you: safe neighborhood, good school district, good commute to work, just the house you wanted, really – but not in the tony hills or hot downtown district you’ve been trying to get into.

Wishing that you could “pick the place up and set it back down” in your desired neighborhood will not make it so, no matter how many times you say it. The reality is that when you have been outbid a double-digit number of times, something about your approach is not working. You either have to downgrade your specs in terms of the property you seek, maybe looking for something smaller, a condo instead of a single-family home or something in less-pristine condition or you need to shift your location criteria – and that can mean a neighborhood change.

Part of the reason this wish is dangerous is that the white-hot markets in many towns are hyper-localized in the Most Desirable Neighborhood in Town. That’s where the competition among buyers and bidding wars are the most intense. If you’re not prepared to house hunt for homes quite a bit lower than your top dollar to set yourself up for success, or if there simply are no homes in that neighborhood listed below your top dollar, you might need to face the reality check that you simply can’t afford to buy there now.

Stop wishing the home you can afford were in a different neighborhood, because if it were, chances are good you wouldn’t be able to afford it, either! Understand that you’ll be able to level-up your neighborhoods as time goes on and you buy your next home – and the one after that – and don’t let your inflexibility paralyze your house hunt so long that prices all over town rise even more.

A friend once told me – if wishes were horses – we’d all be riding.  Don’t be the buyer on the horse.  Buying in the San Francisco Bay Area is one of the hardest markets to get in to and catch up with.  If you cannot buy where you thought you wanted to live – look around – we’re still in the Bay Area and as prices increase – it will increase across the board.  Talk with your Realtor to find the next up and coming area.

2. Hoping that perfect house gets no other offers, even though every other house you’ve bid on has had 54. There’s a fine line between wishing something were true and denying the reality of what actually is true. Facing reality, even when it’s painful or means you can’t have what you want, allows you to make your own action plan for getting the best possible results with the resources you have – or a plan for getting more resources, whichever route you choose to go.

As a buyer in a seller’s market, actually as a buyer in any type of market, it’s ultimately up to you and only you how much you offer on a home. Your mortgage broker can try to get you qualified as high as your income will allow, your agent can get you the comps and give you strategic advice on the average list price-to-sale price ratio, but you are the be-all and end-all decision-maker on offer price, and that’s as it should be.

But if you wield your weighty decision-making power to make lowball or at-asking offers in situations where you are virtually guaranteed to run into high levels of competition, that’s a poor use of your powers. Not only do you set yourself up for failure, you do so at the near-certain likelihood of adding to the demotivating, depressing, discouraging momentum of the times when you get overbid despite giving it your legitimate best efforts. That frustration often leads to analysis and calling a house hunting time-out. And that, in turn, often leads to buying at a time when prices are even higher, and getting ultimately even less home for your money.

I have heard this exact comment and was speechless for a moment.  You cannot wish away the competition.  And asking your Realtor to find a house no one is bidding on – is nuts.  Stop wasting your time and that of the professional you hired and own the fact that you want to buy a home and so does everyone else.  Instead of beating yourself and your Realtor up – think outside the box.  The Caton Team has several offer strategies to set your offer above the rest.  

3. Wishing prices weren’t going up so fast. Here’s the deal: when prices were flat or falling, buyers were (understandably) stressed at the prospect of buying a depreciating asset. Now that they’re ascending, it’s not at all uncommon to hear buyers bemoan that, too. The fact is, the moment escrow closes and your Facebook status changes from house hunter to home owner the fact that prices are rising, and fast, will shift in your mind’s eye from curse to blessing, quick-like.

Rising prices and a recovering market might be what emboldened you to buy, empowered you to sell a formerly underwater home, and certainly have been inextricably intertwined with the increase in jobs. If prices weren’t rising, many of these other things might not be materializing, either, and that wouldn’t be so great.

Wishing prices weren’t going up so fast contributes to a costly form of denial – denial of the reality that they are. This can cause buyers to persist in making lowball offers and wasting their precious time on homes they can’t compete for within in their budget range, all while their smart targets are appreciating rapidly – and that’s how people get priced out of the market, right under their noses.

Don’t let your home buyer dreams fall prey to this costly wish-based pitfall. Work with your agent to stay in the loop about how prices are trending throughout your house hunt, and use that knowledge to power your decision-making about what price range to house hunt in and what price to offer for target properties.

Prices rising means recovery is in full swing.  I totally agree with Tara, it was interesting to watch buyers hang on the fence instead of buying during the bust.  Homes were so cheap – low competition – and there was so much inventory.  But it was scary for some people.  Me, I was born and raised on this blessed peninsula – so I always knew we’d recover.  Jobs, culture, weather – all the factors are here.  So, if you want to buy a home, give your Realtor a call – don’t have one?  Call The Caton Team.  We’ll sit down and review your plans and help you come up with a path to attain your goals.  650-568-5522.  

ALL: What are your real estate wishes, and how do you ground yourself in reality?

Thank you Tara for another great read!

I read this article at: http://www.trulia.com/blog/taranelson/2013/11/3_costly_cases_of_hot_market_wishful_thinking

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office:  650-365-9200

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Connect with us professionally at LinkedIn:  http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008

 

Flood Insurance Update…

Flood Insurance Update
The Senate plans to vote on legislation that would create a 4-year “time out” for both impacted home buyers and future increases on “grandfathered” properties. The Senate Majority Leader has promised the sponsors a vote on S. 1846 Homeowner Flood Insurance Affordability Act which would delay any increases for 4 years; they are currently negotiating the number of amendments and amount of debate time.  The bill is expected to come up the week of January 27 if not sooner, and will require 60 votes to move forward.  NAR issued a call for action and is urging every senator to vote yes.

Is Market Recovery Slowing Down? Great Article from SF Gate

Great article about our local Real Estate market – is recovery slowing down?  Or is supply holding back the reins?

Signs of possible slowdown in housing recovery


By: Kathleen Pender, San Francisco Chronicle & SF Gate

Bay Area home prices rose on a year-over-year basis last month, albeit at a slower pace than earlier in the year, while sales fell to their slowest pace for a December since 2007, DataQuick reported Wednesday.

It was another sign of a potential slowdown in the housing recovery.

On Tuesday, the Mortgage Bankers Association lowered its forecast for 2014 mortgage originations, citing higher interest rates and uncertainty over new mortgage rules that took effect this month.
DataQuick attributed the sales slowdown to a lack of supply, not a lack of demand.
“Demand has been impacted by a roughly one percentage point increase in rates since spring. But we think the bigger deal is the lack of inventory,” DataQuick spokesman Andrew LePage says.
In the Bay Area, 6,714 new and resale houses and condos were sold in the nine counties last month. That was up 0.8 percent from November but down 12.7 percent from December 2012.
Sales are typically higher in December than November, but the seasonal increase is normally much higher – around 8 percent.
The December sales figure was the lowest for a December since 2007, when 5,065 homes sold.
The median price paid for a Bay Area home last month was $548,500. That was down 0.3 percent from November, but 23.9 percent higher than the same time last year. From April through August last year, prices rose 30 percent or more on a year-over-year basis.
More sales in spring

LePage says there will be more homes on the market in spring and summer, when the market typically heats up. Rising home prices will leave fewer homes underwater, so more homeowners will sell because they could make enough to pay off their mortgage. Also, there has been “a little more construction,” LePage says.
“Waiting (to buy a home) will get you more choice, but all bets are off on prices,” he says.
If the current rate of appreciation holds, “the typical home would be selling for $50,000 to $60,000 more by spring.

Perhaps twice that at the upper end of the market,” DataQuick President John Walsh said in a news release.

Tight inventories are also hurting the mortgage industry.

In its forecast Tuesday, the Mortgage Bankers Association predicted that only $1.12 trillion in home loans will be originated this year, down 36 percent from $1.76 trillion in 2013. In October, it predicted that 2014 originations would drop by only 32 percent.

The forecast came out hours after mortgage heavyweights Wells Fargo and Chase announced big drops in fourth-quarter mortgage originations as part of their earnings reports.

The numbers “just kept getting worse through the end of 2013,” says Michael Fratantoni, the association’s chief economist.

The association predicts that home-purchase mortgages will rise just 3.8 percent to $677 billion this year. In October, it was expecting a 9 percent increase.

Refinance originations, it says, will hit only $440 billion, down 60 percent form last year. In October it expected a 57 percent drop.

Higher rates a drag

The main culprit is higher interest rates. Mortgage rates were around 3.5 percent at the beginning of last year but jumped by a full percentage point in May and June. They have been hovering around 4.5 percent since then.

The immediate effect was to slash refinance volume, but home-purchase originations also suffer from a low-rate “hangover,” Fratantoni says. The ultra-low rates that persisted before May “pulled forward some (purchases) that might not have occurred until six months or a year later. Now we are now we are seeing a bit of a payback in terms of lower activity.”

The association predicts that the average 30-year mortgage rate will be above 5 percent by the end of this year and above 5.5 percent at the end of next year.

It also predicts that fewer mortgages could be made this year as lenders narrow their product lineup to conform with the new mortgage rules designed to outlaw some of the abusive lending practices that led to the financial crisis.

The new rules give lenders some protection from borrower lawsuits if they make what is known as a qualified mortgage and the loan goes bad. A loan is not qualified if it has certain features, such as interest-only payments, or if the borrower’s total debt payments (including the mortgage and other debt) exceed 43 percent of gross income.
Over government limit

The new rules apply only to jumbo and other nonconforming mortgages, because all loans that could be bought or backed by Fannie Mae, Freddie Mac, the Federal Housing Administration and other government agencies are automatically deemed qualified.

Government loans account for the vast majority of the mortgages nationwide but a smaller percentage in the Bay Area, where many borrowers exceed the government limit, which tops out at $625,500 for Fannie, Freddie and FHA loans in high-cost areas.

In the Bay Area, 15.4 percent of home-purchase loans exceeded $625,500 in the fourth quarter, but this number ranged from less than 0.4 percent in Solano County to 32 percent in San Francisco, according to DataQuick.

Kathleen Pender is a San Francisco Chronicle columnist. Net Worth runs Tuesdays, Thursdays and Sundays. E-mail: kpender@sfchronicle.com Blog: http://blog.sfgate.com/pender Twitter: @kathpender

I read this article at: http://www.sfgate.com/business/networth/article/Signs-of-possible-slowdown-in-housing-recovery-5146631.php
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2014 – What will the Real Estate Market be like?

It’s on my mind – maybe it’s on your mind – but I enjoyed this article about the 2014 market forecast. Enjoy!

The housing recovery hit high gear in 2013 with bigger than expected price gains and solid home sales. This year isn’t likely to be as exciting. Rising mortgage interest rates will price out some potential buyers. Instead of double-digit price gains, look for single-digit ones, economists say, while existing home sales remain at last year’s level.
Sound boring? “You want boring in the housing market,” says Svenja Gudell, Zillow director of economic research.
Here’s what’s ahead for:
• Home prices. They were the highlight of the 2013 housing market, up 12.5% in October year over year, CoreLogic says. Prices are now 20% off their 2006 peaks after falling more than 30%, shows the Standard & Poor’s Case-Shiller index.
Economist John Burns looks for a 6% gain in 2014. Many others see smaller increases ahead. Zillow forecasts just a 3% rise.
Prices will likely rise more slowly as more homes come on the market, fewer investors bid for homes and higher ownership costs — including interest rates and home prices — take a bite out of housing affordability, housing experts say.
Still, U.S. housing remains 4% undervalued when compared with other economic fundamentals, such as consumer incomes and the cost to rent, says Jed Kolko, Trulia economist. At their 2006 peak, home prices were 39% overvalued based on the same metrics, Kolko says.
•Existing home sales. They’ve started to slow. In November, they were down year over year for the first time in 29 months, National Association of Realtor data show.
The dip was driven by higher interest rates and a tight supply of homes for sale. It doesn’t mean the housing recovery has come off the rails, because home prices and housing starts continue to improve, says Capital Economics economist Paul Ashworth.
Existing home sales, which came in at a 4.9 million seasonally adjusted pace in November, are expected to be about 10% higher in 2013 than 2012 and stay about the same at 5.1 million in 2014, NAR forecasts. That’s roughly back to 2007 levels but below the inflated levels preceding the housing crash.
New-home sales, which make up a smaller part of the market, have more room to grow. They hit an annual pace of 464,000 in November, up almost 17% from a year ago but still below the 700,000-a-year pace generally considered healthy.
The new year will be different for home buyers, though.
Look for fewer bidding wars and a less frantic market, says Glenn Kelman, CEO of brokerage Redfin. Its data show bidding wars recently falling to one of two offers handled by Redfin agents, down from three of four at the peak in March.
Homes are taking longer to sell, and more sellers are also reducing prices to win sales, Kelman says. At the same time, the supply of existing homes for sale edged up to 5.1 months from 4.9 months in October, NAR says. That’s still below the six-month supply that Realtors generally consider to be a balanced market for buyers and sellers.
Supply should get closer to that level in 2014, Kelman says.
Donaee and Jeff Reeve hope he’s right. The couple sold their Seattle-area home in just 10 days amid a hot June market. They’ve been renting as they search for a new home with a few acres. Meanwhile, prices have risen. The lack of suitable homes for sale is “discouraging,” says Donaee Reeve, 36, a dental hygienist.
• Housing construction. This part of the housing recovery has been a laggard.
November’s data showed an improvement, with housing starts topping 1 million on an annual basis, the Commerce Department says. That was up almost 30% from a year earlier, but it’s still far below the norm. Starts averaged 1.5 million a year before the mid-2000s housing boom.
Construction won’t return to normal this year, but it will strengthen enough to be the main driver of the housing recovery as home price gains shrink, says investment manager Goldman Sachs Asset Management.
It sees housing starts increasing 20% a year for the next several years as household formation picks up with the strengthening economy.
More home construction means more jobs for construction workers, plumbers, civil engineers and others in the building trades, as well as related industries such as furniture manufacturing, it says.
Construction alone will add 300,000 to 500,000 jobs a year to the nation’s job base for the next three years, GSAM predicts. That’s up from about 100,000 in 2013.
“The construction revival is primarily a matter of when, not if,” says Tom Teles, GSAM head of securitized and government investments.
• Mortgage rates. Sarah and Andrew Katz know home prices are going up, and mortgage interest rates, too. But they’re still convinced it’s a good time to buy a first home. They’ve set their sights on spring.
“We’re banking on interest rates staying under 5%, but they are what they are,” says Sarah, 29, who works in public relations in Manhattan.

We’re banking on interest rates staying under 5%,

— Sarah Katz
The couple better not wait too long, economists warn.
Average rates for a fixed 30-year mortgage will rise to 5.5% by the end of 2014, says Lawrence Yun, NAR chief economist. Rates have already risen about 1 percentage point in the past year as the economy has strengthened. They’ll be pushed up further as the Federal Reserve winds down its $85 billion monthly bond-buying program.
Each percentage point increase in mortgage rates makes homes about 10% more expensive in terms of higher housing payments.
Another factor could weigh on borrowers. Starting in January, lenders must make home loans that meet new federal qualified mortgage standards or face greater liability from borrower lawsuits, should the loans go sour.
At least 5% of mortgages extended in 2013 wouldn’t meet the new standard, Yun says. More than that will likely face additional scrutiny from lenders as they implement all parts of the new rule, says Brian Koss, executive vice president of lender Mortgage Network.
He says the higher rates and tighter rules will likely drive some home buyers out of the market or into lower-priced homes than they could have afforded last year.
“People have gotten spoiled,” Koss says. Higher rates and home prices will test the strength of the housing recovery in 2014, he says.

I read this article at: http://www.usatoday.com/story/money/business/2014/01/01/home-prices-2014-housing-starts/4181021/#!

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/
Got Questions? – The Caton Team is here to help.
Email Sabrina & Susan at: Info@TheCatonTeam.com
Call us at: 650-568-5522 Office: 650-365-9200
Want Real Estate Info on the Go? Download our FREE Real Estate App: http://thecatonteam.com/mobileapp
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Thanks for reading – Sabrina
The Caton Team – Susan & Sabrina – A Family of Realtors
Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008