The Golden Gate Bridge 75th Anniversary is finally here. Most of the big events take place Sunday, from 11 AM to 11 PM. You’ll find stages with bands and live performances on the Marina Green and Crissy Field. Fireworks, launched from the Bridge, are scheduled to run from 9:30 to 9:50 PM, with KFOG radio providing a soundtrack on air. Weather forecasts indicate there won’t be any fog, so the evening should be perfect for fireworks.
See the complete schedule of events at the Anniversary’s official site, along with a link to the Golden Gate Bridge Flickr page, where you’ll find more than 3,200 images of the bridge – three of which we’ve posted here.
Auto sales. Consumer confidence. Manufacturing. Retail Sales. Exports. You name it. Over the last six months, nearly every facet of the US economy has shown improvement. And the real estate market is no exception.
Here’s the irrefutable proof:
Recovery Sign #1: Housing Starts. In February, housing starts checked-in at an annual rate of 698,000 units. That’s up 14.7% from the 608,800 starts in 2011… up 18.9% from the 586,900 starts in 2010… and up 25.9% from the record-low 554,000 starts in 2009. Bidding wars!
Recovery Sign #2: Building Permits. In February, building permits – a proxy for future construction – climbed to an annual rate of 717,000 units. That was ahead of expectations.
Recovery Sign #3: Dwindling Inventory. Expect even more building on the horizon. Why? Because new home inventories plumbed their lowest level on record in January at 150,000 units. In Marin we are seeing high competition and low inventory.
Recovery Sign #4: Bidding Wars. The lack of inventory is creating a competitive bidding environment. Check out yesterday’s blog post for an updated list of multiple offers in Marin.
Recovery Sign #5: A Bottom in New Home Sales. Last year, new home sales fell to 302,000 units – the worst reading on record. For comparison’s sake, in 2005, 1.28 million new homes were sold. The market has likely bottomed out. I say that because new home sales in February checked-in at an annual rate of 313,000 units, which is 11.4% higher than last February’s rate.
Recovery Sign #6: A Rebound in Existing Home Sales. In the last year, demand for previously owned homes ticked 8.8% higher to an annual rate of 4.59 million. And the number of contracts to buy existing homes in February jumped even more – up 14% year-over-year.
Recovery Sign #7: Prices. As I’ve written before, prices will be the last sign of a recovery. They’re a lagging indicator, like unemployment. That being said, signs of a price rebound are materializing. Based on the latest Case-Shiller Indexes, prices in Miami and Phoenix – arguably two of the hardest-hit real estate markets – were up in January by 1.2% and 2%, respectively. That marks the third consecutive month of improving prices in Miami and the fourth in Phoenix.
Recovery Sign #8: Rising Confidence. If insiders know best, they’re certainly sending bullish signals. The National Association of Realtors/Wells Fargo Index of builder confidence climbed for the sixth month in March. It’s now at the highest level since 2007.
Individual builders aren’t hiding their optimism, either. The CEO of the nation’s third-largest homebuilder recently said, “A very real trend is beginning to take shape… There are empirical data points that are today confirming that the market is showing real signs of stability.” Indeed!
Recovery Sign #9: Historic Affordability. With prices down an average of 36% from the peak – and rent prices rising – it’s never been cheaper to buy a home. In fact, the National Association of Realtors Housing Affordability Index hit a record high of 206.1 in January. (A value of 100 means a family earning the national median income can afford a median-priced property at current mortgage rates.)
Recovery Sign #10: Employment. It’s hard to buy a house if you don’t have a job. And no one can deny that the labor market is improving. In the last eight months, the unemployment rate is down almost one full percentage point.
Recovery Sign #11: An Influx of “Smart Money.” Greg Zuckerman of The Wall Street Journal reports, “Over the last couple months some of the best investors on the street… have been making big bets on homebuilders.” And he’s not kidding.
It’s not too late to act on the opportunities we revealed. Call Jimmy for a free home evaluation!
5 Simple Steps to Succeeding in Multiple Offer Situations:
How to Succeed in a Multiple Offer Market in Marin
1. Get pre-approved
2. Identify your target criteria so you don’t waste your time
3. Scour the market for both on and off market properties
4. Be aggressive by viewing properties ASAP
5. Write offers to WIN! Great terms, great price, and most importantly have a great team representing you
Give Jimmy a call (415) 990-8990 if your thinking about writing an offer.
Click below to view JimmyMarin’s video regarding Pacific Union’s Exclusive Gatefold Advertising in Marin Magazine and C Magazine. A great example of how Pacific Union leads the Bay Area is creative print advertising. Call us to see how we can leverage this unique vehicle to market your home.
Residential remodeling rose 11% in January, up 13% from December. January’s measure is the highest since June 2006! All regions showed significant growth during January 2011, with only the Northeast on the decline from December. The South had largest number of projects at 1.12 million, comprising more than one-third of U.S. remodeling.
“From a macro perspective, this all looks good,” Emison said. “The Northeast is still well below where it was pre-recession, but all the other regions are basically back.”
Clients asked the North Carolina data firm to make the measurement more like others in the housing market, Emison said.
Investors paying in cash continue to drive sales in the Bay Area, with the uptick in purchases for the month of February, with the majority of sales occurring among lower-priced homes. DataQuick reported a sales increase of 4.1% from January and 14.2% increase on the year, marking the eighth consecutive annual increase for the area. Experts warn that February data is not representative of a trend due to timing in the year, but the gains are still welcome considering the persistence of tight credit restrictions and drop in median sales prices. Short sales and foreclosures accounted for roughly half of sales for the month, although sales of homes priced at $500,000 or more climbed a fractional percentage to 28%. For more on this continue reading the following article from TheStreet.
Last month’s Bay Area home sales bounced up a bit more off bottom, fueled in large part by investors with cash who were buying discounted properties in the lower half of the price spectrum. The median price paid for a home dropped year over year for the 17th month in row, a real estate information service reported.
A total of 5,702 new and resale houses and condos sold in the nine-county Bay Area in February. That was up 4.1% from 5,479 in January, and up 14.2% from 4,991 in February 2011. The year-over-year sales increase was the eighth in a row, according to San Diego-based DataQuick.
“The market is still strange, just a little less strange than it was. We also need to keep in mind that, when it comes to statistical trends, February is the least typical month of the year. Over the winter you’re left with a higher concentration of investors and people who must buy or sell because of a major life event.
“In the spring, when many traditional buyers return, we’ll get a much better read on the market. Meanwhile, many potential buyers are still waiting for the lending spigot to open more. Drum-tight credit conditions continue to undermine housing, along with negative equity and the various uncertainties plaguing would-be buyers,” said John Walsh, DataQuick president.
The median price paid for all new and resale houses and condos sold in the Bay Area last month was $325,500. That was down 0.3% from $326,000 in January, and down 3.6% from $337,250 in February 2011. The median has declined on a year-over-year basis every month since October 2010.
Last month distressed property sales — the combination of foreclosure resales and “short sales” — made up about half of the Bay Area’s resale market.
Foreclosure resales — homes that had been foreclosed on in the prior 12 months — accounted for 27.4% of resales in February. That was up from a revised 27.2% in January, and down from 32.6% a year ago. Foreclosure resales peaked in the current cycle at 52.0% in February 2009. The monthly average for foreclosure resales over the past 15 years is about 9%.
Short sales — transactions where the sale price fell short of what was owed on the property — made up an estimated 23.1% of Bay Area resales last month. That was down slightly from an estimated 23.5% in January — the high point for this cycle — and up from 20.1 % a year earlier.
Last month 28% of Bay Area sales were for $500,000 or more, up from a revised 27.4% in January, and down from 30.6% in February 2011. The low for the current cycle was January 2009, when just 22.7% of sales crossed the $500,000 threshold. Over the past 10 years, a monthly average of 47.7% of homes sold for $500,000-plus.
The number of homes that sold for $500,000 or more last month rose 1.8% from February 2011, while sales under $500,000 rose 14.9% year-over-year and sales below $300,000 increased 16.8%.
Silicon Valley has been significantly boosted by Apple’s growth and is experiencing the biggest office leasing boom since the dot-com era. The most valuable publicly-traded company in the world is currently waiting for its 2.8 million-square-foot, flying saucer-like headquarters to land in Cupertino.
Office occupancy in the region has risen by 2.7 million square feet last year, the most since 2000, and rents may grow 11% to an average $36 a square foot this year. Apple’s Norman Foster-designed headquarters expansion has attracted players such as New York’s Tishman Speyerto invest in Sunnyvale, and Swedish pension manager Alecta Pensionsförsäkring, which purchased office buildings in Cupertino and Mountain View.
A report released by the National Low Income Housing Coalition shows that San Francisco is the most expensive place in the country to rent housing. The average rent on a 2 bedroom property in SF is $1,905 per month. The tenant would need to make at least $76,000 a year to be able to afford rent.
The city’s median family income of $103,000 is above the nations average, high rents have the effect of pricing people on the lower side of the economic spectrum out of the market almost entirely. Rent increases have increased into overdrive in recently since many have been the hardest hit in the nation by the foreclosure crisis.
Since so many people have been displaced from home ownership that are coming back into the rental market, and the rental market in the past 4 years has not had too much new supply added. Therefore, the vacancies have dropped and the rental rates have begun to go up much faster than anyone anticipated.
A common misconception the foreclosure crisis has made in San Francisco is that it is now a more affordable place to live.
Another factor pushing up rents in San Francisco is the lack of inventory . The city’s high density and aversion to new developments makes the construction of new housing rare. Rent control also tends to encourage people to stay put longer, ultimately resulting in a low supply of open units.
The high cost of housing in San Francisco is the main reason families flee the city for the suburbs every year. Only 13.4% of San Francisco’s approximately 800,000 people are under the age of 18– the lowest proportion of kids for any major city in the United States.
What’s happening in the city mirrors the growing trend in the rest of the country– home ownership rates are at their lowest level since 1998, resulting in more Americans turning to the rental market.