Home Prices Cooling Slightly…

I had to share this article from the SF Chronicles Kathleen Pender. ¬†On that note – I can feel the shift in the market as I type this. ¬†July is coming and vacations are happening – and suddenly the mad house of the Spring market is settling down. ¬†Can you believe – some homes only received 1 offer. ¬†But let’s not forget – all we need is one offer per house. ¬†So enjoy this article – I would love to hear your thoughts!

-Sabrina Caton

 

Home Prices Cooling Slightly by Kathleen Pender

 

Although it might not seem like it in San Francisco, the overheated housing market seems to be cooling off.

It’s not that home prices are falling, they are just rising at a slower¬†pace.

This week S&P/Case-Shiller reported that its 20-city home price index rose “only” 10.8 percent in April compared with April of last year. That was a smaller increase than the 11.6 percent analysts were expecting, and substantially lower than in previous months. All 20 metro areas except Boston saw smaller year-over-year price¬†increases.

The rate of appreciation has been declining every month since November, when prices rose 13.7 percent over the previous year. In March, the increase was 12.5 percent.

Prices “are coasting back into a more normal situation,” said David Blitzer, a managing director with S&P.

The same pattern holds in the San Francisco metro area, which also includes Alameda, Contra Costa, Marin and San Mateo counties.

Year over year, prices rose 18.2 percent in April, compared to 21.2 percent in March and 25.7 percent in September.

Blitzer expects this trend to continue, in part because there has been a drop-off in the number of corporations buying houses to rent out. He predicts that by the end of 2014, year-over-year price increases will be in the 4 to 7 percent range.

The Case-Shiller report confirms other signs that suggest the real estate market is losing momentum.

Asking prices for homes nationwide rose 8 percent year-over-year in May, their slowest rate in 13 months, Trulia reported this month. Asking prices tend to lead sales prices by about two months, making them a good early warning signal.

“In the markets with the most extreme rebounds, there has been a clear slowdown in price gains. That is a good thing. That is happening even before we have gotten back to a housing bubble,” Trulia Chief Economist Jed Kolko¬†said.

Despite the sharp increase in prices, Trulia estimates that homes nationwide were still undervalued by 3 percent in the second quarter of 2014, compared with 5 percent undervalued in the first quarter and 8 percent undervalued a year ago.

At their extremes, homes were 39 percent overvalued in the second quarter of 2006 and 15 percent undervalued in the fourth quarter of 2011.

To determine whether a particular market is over- or undervalued, Kolko looks at factors such as its price-to-income ratio, price-to-rent ratio and prices relative to its own long-term trends.

Even though prices in San Francisco are astronomical, the market was only 6 percent overvalued relative to its long-term fundamentals in the second quarter. Nine other cities were more overvalued, including San Jose (11 percent) and Oakland (10 percent).

Stan Humphries, chief economist with Zillow, said he expects “a substantial moderation in home value growth” as the market transitions from one fueled by ultra-low interest rates and tight inventory to one fueled by household formation and income growth. Although the latter is more organic and sustainable, it’s also slower-growing than the¬†former.

Zillow’s price index, which has wider geographic coverage than Case-Shiller’s, indicates that prices nationwide rose 5.4 percent in May compared to May of 2013. “Our forecast is that home prices over the next year will rise 3 percent,” Humphries¬†said.

In San Francisco alone, Patrick Carlisle of Paragon Real Estate said, there was no evidence of a slowdown in April or May. “This is the most ferocious spring I have ever seen,” said Carlisle, who has been tracking the market since the late 1980s. “In May, 29 percent of all sales (in San Francisco were) 20 percent or more over asking,” he¬†said.

“I’m seeing some signs of a slowdown in June. Inventory is starting to pick up for the first time in a long time,” he said, “and the percentage of listings under contracts is going down a little¬†bit.”

But the market typically slows down in June, and there are no data yet for sales that closed in June.

It’s too soon to say whether the June slowdown is merely seasonal or reflects “buyer exhaustion or some sort of shift in the market,” Carlisle¬†said.

Moody’s upgrades California: Moody’s Investors Service on Wednesday raised California’s credit rating by one level to Aa3, its fourth-highest grade, from¬†A1.

Before the upgrade, Moody’s had California rated one notch higher than rival agencies Standard & Poor’s and Fitch. Now, it has California rated two steps¬†higher.

This is the fist time Moody’s upgraded the state’s general obligation bond rating since 2006. The last time it was at its new level, Aa3, was in May 2001, says Moody’s spokesman David Jacobson.

S&P upgraded the state to single-A from A-minus in January 2013. Fitch Ratings raised its rating to single-A from A-minus in August.

As strengths, the report cited California’s large and diverse economy, high wealth, improving liquidity and governance improvements leading to on-time budgets for the past three years. It also cited “significant improvement in budget deficits through revenue surges and conservative measures to rein in¬†spending.”

As “challenges,” it cited the state’s highly volatile revenue structure (which is heavily dependent on tax revenue from high-income people and capital gains), governance restrictions such as the supermajority needed to raise taxes, lack of reserves for a rainy day and its reliance in the past on one-time fixes to close budget¬†gaps.

Even after the upgrade, California “is still on the lower side for states,” Jacobson said. Two other states, Arizona and Connecticut, have the same rating as California, Aa3. Only New Jersey and Illinois have lower¬†ratings.

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/Housing-prices-cooling-slightly-5579655.php

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The home bidding wars are back!

Always nice to find a good article to share.  Enjoy By Les Christie CNNMoney

The home bidding wars are back!

The bidding wars are back. Seemingly overnight, many of the nation’s major housing markets have gone from stagnant to sizzling, with for-sale listings drawing offers from a large number of house hunters.

In March, 75% of agents with broker Redfin said their clients’ offers were countered by rival bids, up from 56% who said so in late 2011.

The competition has been most intense in California, where 9 out of 10 homes sold in San Francisco, Sacramento and cities in Southern California drew competing bids during the month. And at least two-third of listings in Boston, Washington D.C., Seattle and New York generated bidding wars.

“The only question is not whether a new listing will get multiple bids but how many it will get,” said Kris Vogt, who manages 14 Coldwell Banker offices in the Sacramento area. One home in an Elk Grove, Calif., subdivision recently received 62 separate bids. The final sale price was for more than $150,000, well above its $129,000 asking price.

In Cambridge, Mass., two condos that could be combined into one large home hit the market two weeks ago for $800,000 each, according to Pat Villani, president of Coldwell Banker Residential Brokerage in New England.

“The brokers stopped taking names after the number of bidders reached 250,” she said. The winning bidder offered $2 million for both units.

Related: Five best markets to buy a home

Homebuyers eager to purchase before home prices and mortgage rates rise are finding few homes for sale as sellers hold out for better deals, said Glenn Kelman, Redfin’s CEO.

Many homeowners are still underwater, owing more on their mortgages than their homes are worth, and they want to wait until selling becomes profitable again. By doing so, they can avoid short sales, which carry big hits on credit scores, 85 to 160 points, according to FICO.

“Many people have been holding on for a profit and they’re just now getting their heads above water,” said Kelman.

Those who want to sell and buy a new home are encountering a market where it’s difficult to find a new place of their own, said Vogt.

Related: Five best markets to sell a home

Over the past few months, Jackie and Cliff Kaufman have bid on four different homes in St. Petersburg, Fla., including one short sale and a foreclosure.

The pair, who have two adult children and run an online jewelry business, said they bid $5,000 more than the $495,000 asking price on the first home they had their eye on and never heard back from the seller’s agent. They were later told the house sold for nearly $550,000.

Next, they bid on a short sale listed for $600,000. This time, they came in $10,000 above the asking price and again, they were beaten out. The house was only on the market for two days.

The third attempt to make an offer on a bank-owned property was also met with silence.

Related: Buy or rent? 10 major cities

“It was very frustrating,” said Jackie Kaufman. “We felt we were always on the outside of the loop and that people who won the homes had the inside track.”

By the fourth try, the couple successfully bid through a listing agent, who they believe pushed their bid harder in order to earn a double commission since she was representing both the buyer and seller in the deal. And they managed to get the place for $30,000 less than the asking price.

They were lucky. Inventories of homes for sale continue to shrink. In February, the National Association of Realtors reported a 19.2% decline in inventory year-over-year. While the number of homes for sale should rise with the onset of the spring selling season, housing inventory is expected to remain low, pushing prices higher.

Related: Fastest growing boomtowns

And new home construction, especially in markets hit hard by the housing bust, is still moving forward at a snail’s pace, since the cost to build the homes is often more than what the property ends up selling for, said Jeff Culbertson, president of Coldwell Banker’s Southern California operations.

Even though home prices are on the rise, the balance between buyers and sellers has been thrown off balance, said Kelman.

“With buyers out in force and sellers cautious, the market is in an awkward ‘tweener’ phase,” he said.

I read this article at:  http://money.cnn.com/2013/04/04/real_estate/bidding-wars/index.html?source=linkedin

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Bay Area Real Estate Market is Sizzling!

Found this great article by Carolyn Said of the San Francisco Chronicle.  Had to share and add my 2 cents are in italics.

Tight inventory Рa dearth of homes for sale Рis driving bidding wars throughout the Bay Area, sending prices up and leaving scores of disappointed would-be buyers. Homes that do hit the market sell within days.

So few homes are listed for sale that agents are resurrecting old ways of drumming up business – going door to door, leaving cards and flyers and writing personal letters, asking owners if they’re interested in selling. Social networking and e-mail blasts are being used to increase inventory as¬†well.

This is all too true.  The Caton Team has started targeting areas, condo complexes, neighborhoods and individual homes to find the right home for our buying clients.  It’s that tough!  And with some first time buyers, the window is closing as prices creep up.  Not to mention we are on the edge of our seats worried if interest rates rise.

“People are going old-school, farming their territory,” said Lynda D, an agent in the East Bay, using real estate agent slang for canvassing¬†neighborhoods.

While tight inventory is a national trend, it’s especially pronounced in the Bay¬†Area.

Alameda County, for instance, had 949 homes for sale in February, down 64 percent from the 2,617 on the market at the same time last year, according to data from Realtor.com, the listings website of the National Association of Realtors. Contra Costa County had 899, down 58 percent from 2,152 in February 2012.

“Those are striking reductions in inventory,” said Errol Samuelson, president of Realtor.com.

While inventory numbers did tick up slightly from January to February, that was a normal seasonal change, not an indication of the logjam loosening.

“After seasonal adjustments, inventory is still falling; the underlying trend is still downward,” said Jed Kolko, chief economist with real estate site Trulia.com.

However, he thinks the rate of decline is slowing.

“Inventory tends to fall the most sharply after prices bottom, as no one wants to sell at the bottom, they just want to buy,” he said. Trulia shows that Bay Area prices bottomed more than a year¬†ago.

Price a factor

Sellers remain reluctant and elusive for several reasons. Those who are still underwater Рowing more than their house is worth Рhave the obvious impediment of not wanting to do a short sale.

But many others “feel underwater based on the price they paid,” Samuelson said. That is, someone who paid $700,000 for a home in 2007 won’t feel good about selling it for $625,000 right now, even though the sale would cover their remaining¬†mortgage.

Some potential sellers, seeing prices surge, are hoping to hold out for more. Others who might want to move up to a bigger house fear that the market frenzy means they won’t be able to find or afford anything¬†else.

This is such a dilemma.¬† If a seller has enough equity, finally, to sell ‚Äď the next question is ‚Äď Where do we go?¬† If a seller wants to stay in the Bay Area, selling now means jumping into the buying pool ‚Äď and that pool is man eat man!¬† So this truly creates a problem.

Now that it’s spring, the busiest real estate season, more homes should start hitting the market. But many agents have been taking matters into their own hands, making pitches directly to potential sellers about why it’s time to get off the¬†fence.

Although there are numerous online sites to track homes for sale, “the way the market is set up now is forcing us to go back to the beginning where (agents) walk up to a door and knock and say, ‘Hi, how are you, my name is … ‘ ” said Adelaida M, a Realtor in San¬†Francisco.

Personal touch

She recently worked with a client seeking a home in San Francisco’s Clarendon Heights neighborhood, above Cole Valley. After losing out with bids, she walked the neighborhood with him and identified houses he particularly liked. Mejia looked up the homeowners and wrote personal letters to each, explaining that her client loved the area and was seeking a house¬†there.

“Three weeks later, one person called me back and said ‘We loved your letter, we’d love to talk even though we’re not on the market, come on over,’ ” she¬†said.

Rich and Renee G, the homeowners, said they received two or three agent solicitations a week after unsuccessfully trying to sell the house last year, but ignored them because they were form letters.

I couldn‚Äôt agree more.¬† The Caton Team has taken this stance and only solicits a seller when we have an actual buyer for their home.¬† We‚Äôre not trying to just get listings.¬† We are trying to unit buyers and sellers.¬† I personally experienced what it feels like to be a seller for the past three years.¬† Back and forth with my loan modification paperwork, we placed our home on the market and with no offers, pulled it off the market for a spell.¬† During that time I got stacks and stacks of form letters.¬† Truthfully, it was starting to frost my cookies.¬† It was evident all us Realtors are trying to drum up business, but the form letters were bothering me.¬† They were heartless and actually hurt me ‚Äď because we didn‚Äôt really want to sell ‚Äď but had to.¬† In the end we listed our home in October of 2012 and sold it within weeks!¬† Now, on the other side of the fence, I consider how a homeowner would feel when they get a form letter.¬† Therefore The Caton Team takes the time to write a real letter, talk about the buyers we are representing and take it from there.

“Adelaida’s note was different; more personalized,” Rich said. “We were planning to put the house on the market again, but the note just pre-empted¬†that.”

Her client ended up visiting the house, making an all-cash offer and buying it. “It was a really stress-free experience for both” the buyer and seller, she¬†said.

If you do ask The Caton Team of your Realtor to solicit homes for you ‚Äď be prepared to pay fair market value or more because if you aren‚Äôt willing too ‚Äď the seller will simply put the home on the market, get multiple offers and sell for top dollar.¬† So in other words, you need to ‚Äėmake them an offer they cannot refuse.‚Äô

Beating the bushes for sellers is an about-face from just 18 months ago, when the challenge was to find people who wanted to buy.

A corresponding trend is that homes are selling very quickly.

‘Unbelievable’

“The median days on market in Contra Costa is 13 days – that’s unbelievable,” Samuelson said. A year ago it was 33¬†days.

Redfin has identified another trend it calls “flash sales” – homes that sell within 24 hours of being listed, usually because a buyer swoops in with an offer too good to refuse. Often, those are buyers who have lost other bidding wars and are determined to land a¬†property.

In the past six months, almost 1,000 Bay Area properties went under contract within one day, Redfin said.

That‚Äôs the truth.¬† The Caton Team has started showing homes the day they come on the market and are prepared, right then and there, to write an offer if our client likes the home.¬† Gone are the days, for now at least, that you could see a home, think about it, maybe sleep on it, then write the offer.¬† Lately it‚Äôs felt like ‚Äď ‚Äėyou like it ‚Äď let‚Äôs write‚Äô! ¬†¬†And with each offer we write for each buyer, we‚Äôre doing everything we can to make the offer more likable to the seller.¬† We are using every tool in our toolbox and the toolbox of our clients.¬†

“I just had that experience at a house in the Oakland hills,” DiVito said. “I held the brokers’ tour just before putting it on the market. A buyer and agent walked in and offered us our list price in cash on the¬†spot.”

Underscoring how much the market has changed, she said her sellers had tried to sell the house a year ago “and could not move this property, even though they lowered the price three¬†times.”

Been there done that.¬† It is amazing how much our real estate market has changed in one year alone.¬† In 2010 and 2011 I had my own condo to sell, and nobody was interested.¬† October 2012 ‚Äď put it on the market and within days I had several offers.¬† In the end, 20 offers on the same condo.¬† Amazing what a year can do.

Same-day offer

The sellers, who were buying a new home and needed to sell quickly, were happy to take the same-day offer since a cash deal meant it couldn’t be derailed by problems with financing or¬†appraisals.

“Flash-sale terms tend to be really good because (buyers) really want to lock down that property quickly,” DiVito said. “They’re more willing to meet the sellers’ needs to scoop it up before anyone else gets¬†it.”

What happens next with inventory is a big question hanging over the real estate recovery.

“My best guess is that you’ll see an orderly return of inventory to the market,” Samuelson said. “I don’t expect that you’ll see the floodgates open and torrents of properties hit the market. But for each percentage point increase in price, there will be some people who for life reasons have wanted to sell for the past five years – their kids moved out, they got divorced – and now feel that the time is right and they have enough¬†equity.”

Don‚Äôt be discouraged if you are a buyer out there.¬† Don‚Äôt sit back either.¬† The best education a buyer can have is living the market.¬† So if you are thinking of buying a home, get pre-approved, call The Caton Team or your Realtor and come up with a plan.¬† The more active you are today ‚Äď the better prepared you will be tomorrow.

I read this article at: http://www.sfgate.com/default/article/Homes-sell-faster-than-ever-in-Bay-Area-4375058.php

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

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Thanks for reading – Sabrina

Bay Area Home Prices Projected to Surge – SF Gate Reports

As a full time Realtor – I’ve seen prices rise since we hit bottom. ¬†Low inventory, cash buyers, and low interest rates have generated multiple offers on each home. ¬†So if you are thinking of selling – there is opportunity now. ¬†The Caton Team is here to answer questions – email us at info@TheCatonTeam.com. ¬†Enjoy this article from the SF Chronicle.

SF Gate reports…

Almost every corner of the Bay Area is poised for robust home-price appreciation this year in a surge that will outpace projected national growth, according to a forecast from real-estate information site Zillow.com.

Looking at 245 Bay Area ZIP codes, Zillow projects that 244 will see home values ratchet up by significant margins in 2013, with 27 ZIPs seeing double-digit appreciation. Only one of the ZIPs analyzed Р94515 in Calistoga Рis forecast to see values recede, by a modest 1.4 percent.

“The forces of supply and demand seem to be exacerbated here right now,” said¬†Svenja Gudell, senior economist with Zillow in Seattle. “We’re happily surprised by how well (the market) is doing and how much it’s picking up¬†steam.”

Strikingly, some of the strongest percentage increases are likely to happen in both the cheapest and the priciest areas in the nine-county region, Zillow predicts. Low-end Solano County markets such as Vacaville, Fairfield, Dixon and Suisun City, where values plunged during the real-estate downturn and are still half off their peaks, should see values bump up by more than 14 percent Рadmittedly easier to do off a low base.

At the same time, Portola Valley, Atherton and Palo Alto Рwith million-dollar-plus median values that now exceed their boom-time heights Рshould see appreciation above 12 percent, Zillow said.

Popular San Francisco neighborhoods such as Noe Valley, the Castro, Twin Peaks, the Mission and Bernal Heights are poised for double-digit appreciation, along with Menlo Park, Larkspur, Palo Alto, Alameda and North Berkeley, Zillow predicts.

Regaining value

One major way that the low-cost and high-end markets diverge is in where values are now relative to their peak. Zillow shows 25 ZIP codes where values have regained all the value lost during the downturn and then some. All are in pricey Silicon Valley or San Francisco neighborhoods where the median price is around $1 million. Meanwhile, about 100 ZIP codes are still 30 percent or more below their peaks Рall in hard-hit, lower-end communities in Solano, Alameda and Contra Costa counties.

For the San Francisco metropolitan area (the counties of San Francisco, San Mateo, Marin, Alameda and Contra Costa), Zillow projects that that values will rise 7.3 percent this year, more than double its predicted 3.3 percent national increase. The San Jose metro area (Santa Clara and San Benito counties) should rise 6.6 percent, it said.

“That is a really great number in the San Francisco metro,” Gudell said. “It is rather special compared to the U.S. as a¬†whole.”

Zillow’s projections take into account both long-term historical trends back to 1997, as well as current data on how markets have behaved in recent months. It also factors in information on employment, income and other economic factors to predict what housing values might do, she¬†said.

Can’t meet¬†demand

Every market around the Bay Area Рwhether low-end, high-end or somewhere in the middle Рnow has one outstanding characteristic that is driving up prices: too few homes for sale to meet buyer appetite.

“There is no place where we see a steeper decline in listed homes (for sale) than the Bay Area,” said¬†Lanny Baker, CEO of ZipRealty in Emeryville, which has agents throughout the Bay Area and the country. “This time last year there were 13,000 homes listed here. Today we see about 5,000 homes – a 60 percent¬†reduction.”

Moreover, the mix of homes being sold has changed dramatically, something that particularly affects lower-end markets such as Solano County. Far fewer bargain-priced, bank-owned foreclosures are on the market.

In the low-cost markets, investors waving fistfuls of cash are snapping up properties, usually to keep as¬†rentals, sometimes to flip. In the high-end markets, it’s tech millionaires – armed with far bigger wads of cash – who are jostling to live in homes in Silicon Valley or San¬†Francisco.

“As soon as something new hits the market, it’s snapped up,” said¬†Sandy Rainsbarger, an agent with ZipRealty in Vacaville. That town’s 95688 ZIP, where the median value is now $287,900, is projected by Zillow to see values rise 17.1 percent this year – the biggest price appreciation in the Bay Area. “There are multiple offers on every single¬†property.”

Buyers pushed aside

Meanwhile, “regular” buyers, especially first-time home buyers who are relying on¬†Federal Housing Administration¬†mortgages, are finding themselves shoved aside time after time in frenzied bidding¬†wars.

“The Bay Area is one of the fastest-moving markets in the country,” Baker said. “We see houses sell on average in 26 days here. One statistic we look at is what percentage of homes sell in just seven days; that’s like a red alert. If it gets to 15 percent, we know we’re in a zany market. In the Bay Area, it’s at 13 percent. In Sacramento, 25 percent of homes sell in less than seven¬†days.

“I think throughout this year, we’ll see Bay Area markets continue to be very, very strong,” Baker said. “On the lower end, the specter of foreclosures and ‘Gosh, nobody’s ever going to want to live this far out’ has washed away, and there is more confidence in values¬†recovering.

“On the high end, we’ve got Silicon Valley and the tech economy doing really¬†well.”

Read more: http://www.sfgate.com/realestate/article/Bay-Area-home-prices-projected-to-surge-4288392.php#ixzz2LOK2EMfM

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

Email Sabrina & Susan at:  Info@TheCatonTeam.com

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

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Please enjoy my personal journey through homeownership at:

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Thanks for reading – Sabrina