A Tale of Two Markets

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc.

Two sets of data about California real estate released this past week reveal a housing market that’s healthy, yet complicated and moving in a few different directions.

What we’re seeing is a market that’s improving overall, but that continues to struggle with supply – especially in certain pockets like the San Francisco Bay Area.

2013 brought about vast improvements in the state’s luxury markets, with sales of homes costing $1 million or more soaring 45% to their highest level in six years, according to La Jolla-based housing data company DataQuick.

Buyers are Optimistic



Affordability Grows Out of Reach in Some Housing Markets

 

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc.

As we continue to closely watch the housing recovery, it's interesting to point out how markets can contrast wildly with one another right now.

For instance, some housing markets are either chugging along slowly or still struggling to get values up to a level that pulls more local homeowners out of low or no equity situations. And other markets are so hot that you'd think the downturn never happened.

One of the statistics that is strikingly different in individual markets right now is affordability.

In some markets, we're still seeing some of the most affordable housing situations in decades. But in other markets where prices have risen more rapidly, affordability has already become an issue once again, pricing out some families.

John Burns Real Estate Consulting this month released data showing the share of median household income devoted to home mortgage payments recently surpassed historical averages in six of 30 major U.S. housing markets.

Five of the markets were in California – San Francisco, Los Angeles, Orange County, San Jose and San Diego. The sixth was Portland, Ore.

Burns said that during the downturn, prices in those cities were more affordable than their historical averages dating back to 1980. But prices have risen rather quickly along with the recovery.

Couple that fact with rising interest rates on mortgages and it's potentially a dangerous mix for first-time buyers in these markets who may struggle to get the right price point. Rates are still really low by historic standards, but a slight increase can make a huge difference in affordability for many families.

This new state of affordability for the six markets identified by John Burns should be a red flag for buyers who may be on the cusp. There's no time like today to make a move. Economists expect rates on mortgages to keep climbing. And in markets facing restricted supply, values will continue to increase a fast clip due to demand.

We will continue to watch these six markets, as well as the recovery at the national level. But for now, it seems like an obvious time to say "Carpe diem!" if you've been waiting to buy your first home.

Some Markets Get a Summer Boost in Available Homes for Sale

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc.

Remember that much-needed housing inventory we've been discussing here? It's raising its head above the fold.

The number of homes listed for sale nationwide climbed 4.3% in June to 1.9 million homes, according to data in the Wall Street Journal pulled this week from Realtor.com. It was the highest level we've seen in a year.

Does this mean we're over the hump? Potentially.

Even with the improvement in monthly gains, inventory levels continue to be below year-ago comparisons. The number of homes listed for sale nationwide in June was 7.3% below levels of last year. But note the improvement from February, when inventories were 18.6% below the year before.

Inventories were up in 20 cities in June compared to May, with a notable spike in Southern California where available home listings jumped 51.5% in Orange County, 45.7% in Los Angeles, and 18.1% in San Diego.

The data pointed out four markets of the nation's largest 30 where the number of listings was above last year's levels. They were: Sacramento (up 11%), Atlanta (up 10.9%), Phoenix (up 6.2%), and Miami (2.2%).

On the opposite end of the spectrum, five cities had inventory levels that were well below last year's levels, including Boston (down 35.1%), Denver (down 30.1%), Detroit (down 25.7%), Seattle (down 23.2%), and San Francisco (down 21.7%).

The falling numbers in these cities isn't a good sign for buyers. Markets will continue to be tight, at least in the short term, as demand remains high. We may see further price increases as a result.

On the other side, however, a tightened supply and healthy demand could help more homeowners in these markets jump off the fence and list their homes for sale if they've been waiting for more signs the market is back.

It's a tough balancing act. But all in all, inventories appear to have reversed their freefall in some markets, while continuing to be scarce in others. As with all things real estate, it's all about location. That's why it's always so difficult to answer the question everyone wants to ask, "How's the market?"

Stay tuned as we continue to watch these numbers closely.

Real Estate Prices Going Up - Infographic

It’s all about recovery, and it appears our area is well on the way. If you’re buying in one of these areas there are challenges. If your selling in one of these areas there are different challenges. We can guide you through your challenging real estate transaction.

 

 

Strong Price Gains Fuel Market Confidence

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc.

Intero value #14 is confidence.  Confidence /con·fi·dence/ •noun.  Freedom from doubt; belief in yourself and your abilities.

Confidence is also the word in housing this week. At least that's what we're hearing from some of the top companies in housing finance.

JPMorgan Chase revised its forecasts for the industry, prompted by large gains in home prices. And Fannie Mae released its monthly national housing survey, showing a sharp increase in consumer confidence in the housing market.

Home prices could grow as high as 7.2% this year, according to JPMorgan's new report. Analysts at the bank studied prices and demand conditions as the market moves into summer. They revised 2013 predictions higher as well as projections for 2014 and 2015, with an expected 3.9% and 3.2% growth, respectively.

Home Warranties - Not Just for New Homeowners

We've had some conversation today about how home repairs get to be more and more of a burden the longer the homeowner has owned it. A good solution to these high repair costs is to purchase a home warranty. With this program a homeowner pays an annual premium and a fixed co-pay for each service call. While we have our favorite to recommend, we're being fair and giving information on three very good companies that service our area and all of California.

Fidelity National
American Home Shield
Old Republic Home Warranty

Here's short video that explains what home warranties are:



We have many homeowners who buy these programs year after year. We also have several investment property owners who buy them for their rental properties. Hope you find this information useful. Let us know if you decide to purchase one of these policies.

Why Home Sales Slipped in March

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc.

If you've been following housing market news this year, you may have been surprised by the latest home sales numbers to come out this week. Sales of existing homes stalled at 4.92 million, dropping 0.6% in March from February.

But what about this hot spring we've all been anticipating? What about the great recovery and growth period we're supposed to see in 2013? What's going on here?

The problem is lack of homes. There's plenty of demand from buyers, but just not enough to choose from on the market.

Some areas are experiencing multiple bids, which can frustrate buyers after they've been outbid a handful of times and turn them away.

And in some cases, we see sellers being affected as well. For those in tight markets, they may not feel confident enough to list their homes until they know for sure they'll be able to find a new one to move into.

Despite the decline in March sales from February, home sales were still 10.3% higher than the same month a year ago, marking the 21st consecutive month of year-over-year increases. That's good news, and a good indicator of how the market is trending in the big picture.

Demand is still strong, according to the National Association of Realtors, which reported buyer traffic is 25% above a year ago. But the drop in available homes has put upward pressure on prices. And some buyers are getting frustrated and priced out.

The national median home price was $184,300 in March, 11.8% higher than a year ago. The increase was the highest gain since November 2005.

Total housing inventory was up 1.6% to 1.93% homes for sale, representing a 4.7-month supply at the current pace. For-sale inventory was 16.8% below what it was a year ago, showing how lack of supply is truly impacting the pace of sales and overall market activity.

What happens next?

At the rate things are going, we can likely expect more price increases, driven by continued tight markets with some increases in new home building to balance supply.

At some point, prices will reach a tipping point where more sellers are able to sell because values will meet their needs.

Until then, buyers need patience and the ability to act fast; sellers need motivation or the right price points to get out from an underwater mortgage. We have an interesting second half of the year ahead!

Three Reasons to Sell Your House Today!

In case you need them, here are three more reasons to get your house on the market now if selling is part of your plan this year.

Part I - Demand for Real Estate is Much Stronger This Year

When selling anything, owners can only hope there is a strong demand for that which they are selling. The great news for today’s home sellers is that the current housing market is experiencing a stronger demand than we have seen in some time. Read the entire article here.

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Part II - Housing Supply is Low

A seller’s ability to sell their home in today’s real estate market will be determined by both the supply of homes for sale and the demand for that housing. In real estate, supply is represented by the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month). Read the entire article here.



 

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Part III - New Construction Will Soon Be Your Competition

Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. As an example, the National Association of Realtors revealed, relative to last year, year-to-date new home sales are up 19%. Read the entire article here.




 

These articles are from The KCM Blog, A small piece of Keeping Current Matters.

Foreclosures Tumble Significantly

 

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc

Even as things have improved vastly in the housing resale market this year – both in terms of sales activity and prices – foreclosures have remained a concern. Generally, the foreclosure situation has
improved steadily over the last year, but with so many properties to go through and so many local markets suffering, it’s been slow.

This week, we got news of the state of foreclosures as we near the end of the year. And it’s
looking good. The number of foreclosures completed in October slipped to 58,000 from 77,000 in September and 70,000 a year ago, according to the latest report from CoreLogic.

In addition, CoreLogic reports that fewer properties were in the foreclosure process in October – an indicator of the months to come. About 1.3 million homes were in some stage of foreclosure in October, down 1.3% from September, and accounting for about 3.2% of all mortgages.
The total foreclosure inventory has fallen 9% this year.

For comparison, CoreLogic reports that in the years before the housing market collapse,
2000-2006, an average 21,000 foreclosures were completed in a month. And in total, there have been about 3.9 million foreclosures since September 2008, when the financial crisis kicked into high gear.
Foreclosure activity is spread across the country, but five states accounted for nearly half of all
completed foreclosures in the last 12 months: California, Florida, Michigan, Texas and Georgia.
The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida with 11.1%, New Jersey with 7.7%, New York with 5.3%, Illinois with 5%, and Nevada with 4.8%.

It appears 2012 was the big turnaround year for foreclosures. As the resale market continues its pickup next year, we’ll likely see even larger drops in the percentage of foreclosures that make up all mortgaged homes. We see the light!

And in related news, a bit of relief for impacted families:

Fannie Mae and Freddie Mac each announced their moratorium dates, halting evictions on foreclosure properties during the holiday season so that families can stay in their homes until after the new year. Fannie Mae’s moratorium applies to single-family and 2- to 4-unit properties and runs from Dec. 19, 2012 through Jan. 2, 2013. Freddie Mac’s eviction moratorium starts Dec. 17 and runs through Jan. 2.

The DONT'S of the Home Loan Process

10 Things to Avoid When Applying For A Loan

If you are going through the home buying process you’ve probably heard a lot about what you should do. But, if you are planning to get a loan to help you buy the house, there are also things you should not do.  Read all 10 of them.

Potential Impacts of the Debt Ceiling Law on Real Estate

This video is published by the National Association of Realtors. The speakers talk about the details of the law that raised the debt ceiling, and kept the government in business. They also talk about what's next, with an emphasis on the real estate industry.

Get the Score Lenders Use to Evaluate Your Home Refinance Loan

After you’ve determined that you’re ready to refinance, you need to understand how lenders see you. Lenders will determine your credit-worthiness based on your three FICO® scores. By getting your scores, you can be sure that you know the kind of loan offers you should be receiving before lenders present you with numbers. Read more...

Are Falling Home Prices Saving Marriages?

By Gino Blefari
President & CEO
Intero Real Estate Services, Inc.

You'll often hear people in the real estate business talk about how most home sales are triggered by life events: marriage, divorce, babies, job relocation. These are the standard igniters. But how do situations change when the housing market is slow? Read the whole story...

Real Estate Is This Summer's Biggest Blockbuster for Buyers

Summer is almost here – typically a busy season for home sales. But, what about this year? Will high gas prices and the rising cost of just about everything else from inflation dampen a typically active time of year in real estate? We're on shaky ground, but could there be a better market for buyers? I don't think so. Let's look at what we know...

Realtor Nationwide Open House Weekend Opens Doors to Home Ownership

Team Patereau will be hosting open houses both Saturday and Sunday. We'll be at our Eagle Ridge listing as well as our Church Street listing. Please stop by to see these beautiful homes. Both are well priced and the owners are motivated. Hope to see you at one or both. And, remember, even if you own your home, you may be able to teall a friend or family member about one of the homes that will be perfect for them.

Bankruptcy and 2nd Mortgage Information

The San Jose Mercury News, and reporter Pete Carey, have specific information about Second Mortgages in relation to those who have filed bankruptcy. This is really good information and helps people in financial distress see the light at the end of the tunnel. Read on...

San Jose Mercury News Reports on the Real Estate Market Gone "Crazy"

The San Jose Mercury News' reporter Patrick May reports on the whole Bay Area, but be assured that all of the situations May writes about are happening right here in Gilroy and the close surrounding area. It's not pretty, but when you have an experienced and ethical Realtor to represent you, real estate transactions can happen, and they can benefit you. Here's the full story...

Housing Recovery Confusion – The 3 Things We Know

A lot of news is happening in the world of mortgage finance and the housing economy. The government is trying to figure out how to fix and/or prevent another bubble and collapse in housing finance, while also trying to help boost the housing market – an impossible feat when you think about it. Kind of like running in two opposing directions at once. Read the full story...

Great Rental in Old Gilroy