County rents jump ‚ÄĒ again

County rents jump ‚ÄĒ again

February 02, 2015, 05:00 AM By Austin Walsh Daily Journal

As rents continue to skyrocket throughout the region, housing experts say San Mateo County residents should not expect to see relief in the near future.

In the past year, average monthly rents in the fourth quarter increased $227, jumping to $2,572, according to reports from according to RealAnswers, a group that compiles apartment data.

During the fourth quarter in San Mateo, studio apartments increased by an average of $193 from last year, to $1,762 per month, marking a 12.3 percent increase. One-bedroom apartments with one bathroom increased by 10.3 percent on average to $2,332 per month, up $218 from 2013. And two-bedroom, one-bathroom apartments increased $181 per month, to $2,593, a 7.5 percent increase from the previous year, according to the report.

But some renters have seen increases as substantial as $600 in a year, said Josh Hugg, program manager at the Housing Leadership Council of San Mateo County.

Hugg and other advocates for renters promote policies that protects residents from exorbitant rates or increases.

‚ÄúWe need more affordable housing,‚ÄĚ Hugg said.

Well-paying technology jobs are frequently cited for driving up costs across the region, but Hugg noted that for every job created in the tech sector, there are multiple support workers who are finding it increasingly difficult to live locally.

‚ÄúWhen we bring in all these great jobs, they are creating jobs of more modest means,‚ÄĚ Hugg said. ‚ÄúWe are not making a place for them, even though they are the fastest growing part of the workforce.‚ÄĚ

Some residents are being priced out of their homes, and are forced to move back in with their families to afford the cost of living, said Sally Navarro, a rental, sales and property management Realtor for AVR Realty in Burlingame.

‚ÄúEveryone is piling in until they find something. Folks are just waiting it out to see what‚Äôs going to happen,‚ÄĚ she said.

But the outlook is not optimistic for those hoping to see prices drop, she said.

Navarro, who has worked in the local rental industry for nearly three decades, said she has never seen a tougher rental market than what is currently available.

‚ÄúI don‚Äôt see that it‚Äôs going to get a lot better,‚ÄĚ Navarro said.

The best that renters might hope for is that rates level out from their constant incline. Navarro said that she has not seen rents decrease since the dot-com bubble burst around the turn of the century.

She said that the feeling of dissatisfaction with expensive rents is prevalent throughout the county.

‚ÄúPeople are extremely frustrated,‚ÄĚ she said.

But it’s not bad for everyone involved in the housing industry, said Navarro.

‚ÄúI think landlords are very lucky right now,‚ÄĚ she said. ‚ÄúThey have been reaping the benefits for quite a while.‚ÄĚ

But she expressed compassion for those who are trying to find a new place to live in the current market.

‚ÄúI feel bad for tenants. We don‚Äôt know how it‚Äôs going to go, or when it‚Äôs going to change. In the meantime, we have people looking for places and there is nothing out there. It‚Äôs really frustrating,‚ÄĚ she said.

Those interested in landing a new place should bring all the preliminary paperwork with them to the appointment, and be willing to pay more than the market rate, Navarro said.

Though the region has reaped the benefits of being a globally acclaimed hub of innovation and is seen as a gold mine for people across the globe, Hugg said the success has come at a substantial cost to those who have lived in the region for years.

‚ÄúWe are a victim of our own success,‚ÄĚ he said.

 

I read this article at: http://www.smdailyjournal.com/articles/lnews/2015-02-02/county-rents-jump-again/1776425137606.html?interaction=normal

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Are Home Prices Rising Too Fast?

Hello Readers!
Found this article and had to share it.  Why?  Because this is on all our minds.  My 2 cents are in italics.
  
When¬†the real estate market¬†hit bottom you could feel the thud.¬† Buyers were leery of buying¬†afraid home prices would continue to fall and sellers wouldn‚Äôt sell if their life depended on it not wanting to take any kind of loss.¬† Thankfully those days are behind us.¬† What a difference 1 year makes….it is obvious the memo is out and buyers are ready to buy again.¬†¬†However, sellers are not quite there yet.¬† It seems that the bulk of properties for sale since 2009 were pre and post foreclosures, overinundating the market with options.¬† Come 2012 and today, with sellers not quite ready to put their homes on the market inventory remains low in our area ‚Äď thus pushing prices up.
No Realtor or client enjoys markets like this.¬† Multiple offers, over bidding, no contingencies ‚Äď all this is back in force right now.¬† Ideally we would like to see a normal healthy market with normal growth.¬† But with so few homes for sales and pent up buyers jumping off the fence ‚Äď it is amazing to see this change that has taken place in the real estate world.
Enjoy the article ‚Äď and would love to hear YOUR thoughts too!
Are Home Prices Rising Too Fast?
Some housing analysts are concerned that the sudden rise in home prices could make homes more unaffordable again if the price increases outpace income growth, The Wall Street Journal reports.
Average housing costs for home buyers who took out a mortgage were around 22.5 percent of average incomes, according to John Burns Real Estate Consulting. That is down from 38.5 percent in 2006, the peak of the housing bubble. The historical average is about 33 percent.
But with home prices rising in many markets and, in some, rising at a faster pace than income levels, will more people soon be priced out of the market?
Housing analysts say that, for now at least, lower mortgage rates are offsetting the higher prices of homes.
Borrowers have seen their purchasing power rise by around 33 percent over the past four years due to the low interest rates,¬†The Wall Street Journal¬†reports. For example, a borrower can make a $1,000 monthly mortgage payment and qualify for a $222,000 mortgage at today‚Äôs low interest rates, compared to 2008 when they‚Äôd likely qualify for $165,000 when mortgage rates were around 6.1 percent — nearly double what they are today.
Borrowers are able to withstand home-price increases because of the low rates, not because household incomes are growing, The Wall Street Journal reports. If mortgage rates tick back up to the 6 percent or 8 percent range, homes may look overpriced relative to incomes, according to housing analysts.
By: DAILY REAL ESTATE NEWS
Source: ‚ÄúWhy Rising Interest Rates Could Eventually Curb Price Gains,‚ÄĚ The Wall Street Journal (April 10, 2013)
 
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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

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Home Buyers Face Dilemma with Housing Shortage – SF GATE sheds some light…

After a great open house yesterday with candid discussions with the buyers out there. ¬†It was great to find this article this morning in the Sunday paper regarding what Realtors in the Bay Area were already thinking. ¬†If you want to call our glorious SF Peninsula home – now is the time. ¬†We hit bottom, whether it was 2009 or 2012. ¬†With limited inventory and low rates driving renters from out under their rock – homes are selling with multiple offers and for over their listed price. ¬†And with demand this strong – we don’t feel prices are going to fall anytime soon. ¬†Take a read and let me know your thoughts. ¬†Comment or email us at info@thecatonteam.com! ¬†Enjoy!

Home Buyers Face Dilemma with Housing Shortage

The sharp drop in homes for sale poses a tough choice for buyers: Jump in now and compete with hordes of others or wait until inventory¬†improves.¬† If you buy now, you might have to pay above asking. But if you wait, you could end up paying an even higher price and a higher interest rate if you need a loan. That’s because inventory won’t improve until prices rise enough to get more homeowners to sell and more builders to break¬†ground.

The inventory shortage is especially acute in California. Of the 30 largest housing markets, the four with the biggest drops in homes listed for sale on Zillow in February compared with February of last year were Sacramento (48 percent), Los Angeles, San Francisco (41 percent) and San¬†Diego.¬† Although listings are increasing on a month-to-month basis as the busy spring season gets under way, Trulia Chief Economist Jed Kolko predicts they won’t start rising on a year-over-year basis for a year or¬†more.

An example of that: “In all of Millbrae, there was one listing two months ago. There are about a dozen now,” says Roger Dewes, a Coldwell Banker agent on the Peninsula. In a normal market, there might be 20. “We are not there yet, but going from one to 12 is quite a leap,” he¬†says.

Experts cite five factors contributing to the inventory shortage:

Fewer foreclosures are hitting the market. “California did a good job of disposing of its backlog” of distressed properties, says Zillow Chief Economist Stan Humphries.

In California, where most foreclosures are handled out of court, the process is taking about 11 months on average, according to RealtyTrac. In New York and New Jersey, where foreclosures go through a court proceeding, the process is taking 36 and 32 months, respectively.

Many people still owe more than their homes are worth. If they sold now, they would have to come up with extra cash to pay off their loan. Although prices have rebounded from their lows, 23.3 percent of homes with a mortgage in San Francisco, San Mateo and Marin counties were still underwater in the fourth quarter of 2012, according to Zillow.

Even if they are not underwater, many owners won’t sell for less than they paid. If they bought near the peak, it may take a while before they are ready to¬†budge.

The median price paid for a new or resale home or condo in the nine-county Bay Area was $415,000 in January. That’s less than halfway between its low of $290,000 in March 2009 and its high of $665,000 set in June/July 2007, according to¬†DataQuick.

Many people, even if their homes are worth more than they paid, won’t sell because they are afraid they won’t be able to buy another house. “It becomes a game of musical chairs; they are afraid to get out because they can’t get back in,” Humphries says. This becomes “a self-reinforcing cycle” that keeps homes off the¬†market.

The housing bust put new construction on hold.

The shortage comes at a time when demand is rising in the Bay Area, not just from regular buyers but from investors, second-home buyers and foreign buyers, especially from Asia.

‘Heck of a¬†wreck’

The result is stories like this: A 1,500-square-foot home on Clipper Street on San Mateo’s east side, advertised as a “heck of a wreck,” attracted 97 offers in the first eight days, says listing agent Claire Haggarty of NBT Realty Services.

The home was listed in mid-January at $375,000, which Haggarty considered “a little under market.” It sold for $510,000 in an all-cash deal with no inspections, no contingencies and a 10-day¬†close.

At some point, prices will rise enough to shake lose more inventory, but it won’t happen¬†immediately.¬† Based on what’s happening around the country, Kolko says inventory tightens fastest in the first 12 months after prices hit a bottom. “Everybody wants to buy at the bottom and nobody wants to sell at the bottom,” he¬†says.

About 12 months after hitting bottom, inventory continues to decline, albeit at a slower pace. But it won’t increase on a year-over-year basis until at least two years after hitting bottom, he¬†predicts.¬† If you adjust for the mix of homes sold, Kolko says prices bottomed in February 2012 nationwide and in most parts of California and the Bay Area. (The San Jose metro area bottomed earlier, in June¬†2011.)

Although DataQuick shows Bay Area home prices bottoming in 2009, that’s when most homes being sold were low-priced. The middle and upper end of the market bottomed in early 2012, says DataQuick’s Andrew LePage.

If you believe Kolko’s two-year rule, inventory won’t begin increasing on a year-over-year basis until at least early 2014 in most¬†areas.¬† Humphries says it might improve earlier, by the end of the year, but “this spring will still be challenging from an inventory perspective.” If you wait until next year to buy, the market may be cooler but prices are likely to be higher. There’s also a risk that interest rates will be higher, he¬†says.

Sweet spot 

The sweet spot for buyers might be this summer. Even though inventory is falling year-over-year, “the seasonal pattern means there will be more homes on the market in the summer,” Kolko says. “Search traffic peaks in the spring, but inventory peaks in¬†July.”¬† Many buyers also go on vacation in July and August, Dewes¬†says.

The decision to buy or wait “really comes down to a fundamental decision about how long you will be in a home,” Humphries says. “If you want to be in a home long enough to make buying better than renting, make that decision as soon as you¬†can.”

In the city of San Francisco, the breakeven point where it makes more sense to own is 3.7 years, Humphries says. “If you will be there more than 3.7 years, I’d say buy¬†now.”

By Kathleen Pender SF GATE

I read this article at: http://www.sfgate.com/business/networth/article/Home-buyers-face-dilemma-with-shortage-4342162.php#page-2

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

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