Fast Facts from CAR and Freddie Mac - July 2006
Compared to last time, this report shows that overall, California's real estate market is slowing even though the mortgage rates are lower. Here are the numbers.
- Mick OrtonCalif. median home price - July 06: $567,360 (Source: C.A.R.)
(note: compared to $575,800 last month)
Calif. highest median home price by C.A.R. region July 06:Santa Barbara So. Coast $1,075,000 (Source: C.A.R.)
(note: compared to $1,300,000 last month)
Calif. lowest median home price by C.A.R. region July 06:High Desert $333,330 (Source: C.A.R.)
(note: compared to $334,790 last month)
Mortgage rates - week ending 8/24:
- 30-yr. fixed: 6.48%; Fees/points: 0.4%
(note: compared to 6.63% last report but points are higher) - 15-yr. fixed: 6.18%; Fees/points: 0.4%
(note: compared to 6.27% last report but points are higher) - 1-yr. adjustable: 5.60%; Fees/points: 0.7%
(note: compared to 5.69% last report but points are same)
- California Association of Realtors & Freddie Mac
Focus on San Francisco Neighborhoods - Outer Richmond
Outer Richmond as described on the SFResidence neighborhoods page:
The Outer Richmond houses world-class recreation as a matter of course, where you're never more than a minute from a hike at Land's End, a walk with the dog at Ocean or Baker Beach, or simply watching the surfers ride the waves of the Pacific.
The San Francisco Chronicle says:
"Before 1900, most of the San Franciscans in the Richmond District were the deceased inhabitants of the municipal and Chinese cemeteries. It's taken over a hundred years for the Outer Richmond to blossom from a giant vacant lot into prime (albeit foggy) real estate. At the turn of the 20th century, it was little but sand dunes and potato fields and was dubbed "The Outer Lands" and "The Great Sand Waste" until streetcars opened it up to the public. Early in its history, those eager to sell homes and property in other parts of the Richmond tried to rechristen it "Park Presidio," but the original moniker stuck fast, though the origins of "Richmond" are uncertain. The most common explanation is that an early settler saw in its stark, gently hilly landscape echoes of his old home in Richmond, New South Wales, Australia.
"While the Inner Richmond is a restaurant haven and one of the city's more difficult parking areas, the Outer Richmond retains a neighborhood feel along its main shopping streets. The many waves of immigrants who have settled have put their stamp on it; whole blocks along Geary Boulevard hum with Russian and Cantonese speakers, and you can find Mexican, Russian, French and Italian restaurants with ease, not to mention a plethora of establishments serving food from every corner of Asia.
"Like the Outer Richmond itself, Geary calms down considerably after 25th Avenue as it meanders off into the fog and ultimately ends at the Pacific Ocean."
- San Francisco Chronicle
Other highlights on this page include:
- Best time to go
- Sights & culture
- Food and drink (including reviews!)
- Shopping
- Nightlife
For more information on other neighborhoods and street maps visit our
website.
- Mick OrtonPrevious Neighborhoods: Castro - Cow Hollow - Diamond Heights - Golden Gate Park - Lake Street - Laurel Heights - The Marina - Nob Hill - Noe Valley - Outer Richmond - Pacific Heights - Russian Hill - Sacramento Street - St. Francis Wood - Sea Cliff - Telegraph Hill
A Lot at Stake in San Francisco's November Election
Real property interests have a lot at stake in every municipal election in San Francisco. A large part of the city's budget is derived from real property taxes collected from real property owners. And, although Proposition 13 controls both the assessed value of real property and the real property tax rate, bond measures passed by the voters can increase the city's indebtedness and the real property tax rate beyond the levels otherwise prescribed by Proposition 13. In addition, there are usually measures on the ballot that, if passed by the voters, can affect how real property owners can use their real property in the city.
The Association every year spends considerable financial and human resources attempting to maintain a political environment in the city that is friendly to the ownership of real property. In that regard, it conducts elaborate public information campaigns to keep REALTORS® and real property owners informed concerning matters of importance to them. This November, voters will fill five vacancies on the Board of Supervisors and decide the fate of 11 ballot measures. A lot is at stake in the election.
To assist REALTORS® in understanding the races a little bit better, the Association has prepared the following election primer. In doing so, it recognizes that not every member will embrace the Association's on the candidates or the issues. Our task, as always, is to adopt positions on issues based on their effect on real estate interests and the city as a whole. It is hoped that you find the following information helpful.
Supervisorial Candidates (This year, vacancies will occur in all of the even-numbered supervisorial districts. What follows is a list of the candidates in each district, with the names of the candidates being or likely to be supported by the San Francisco Association shown in bold.)
(*Note: Districts below are NOT MLS districts, but refer to voting districts!)
District Two (Pacific Heights)- Incumbent: Michela Alioto-Pier
Michela Alioto-Pier was appointed to the Board of Supervisors by Mayor Gavin Newsom. Later she was elected to the Board in her own right.
Michela is a staunch supporter of a fair and balanced approach to the formulation of housing policy in the city. She believes that homeownership leads to more stable neighborhoods and has supported attempts to increase ownership opportunities so that middle class renters are not forced to leave the city in order to find affordable ownership housing elsewhere. - Challenger:Vilma Guinto Peoro
District Four (The Sunset)
- Incumbent: none. District Four Supervisor Fiona Ma is running for State Assembly.
- Challengers:Douglas Chan
Doug Chan has been endorsed by Mayor Gavin Newsom, Supervisor Fiona Ma and Supervisor Sean Elsbernd. He is a former police commissioner who is running for office to make the city's neighborhoods safer, improve the city's economy, broaden access to health services and demand the best from our schools.
If you are interested in assisting Doug, go to his web site:www.electdougchan.com - Ron Dudum
- David Ferguson
- Edmund Jew
- Jaynry Mak
- Houston Zheng
District Six (The Tenderloin, South Beach)
- Incumbent: Chris Daly
- Challengers:Rob Black
Rob Black has been endorsed by the San Francisco Association of REALTORS®. Rob formerly was Supervisor Alioto-Pier's legislative aide and, in that capacity, he worked closely and cooperatively with the Association on a host of legislative issues affecting the interests of real property owners in the city. If Rob is able to replace Chris Daly on the Board of Supervisors, the board is certain to take a more balanced and fair-minded approach to the formulation of housing policy.
If you are interested in assisting Rob, go to his web site: www.robblack2006.com - George Dias
- Matt Drake
- Viliam Dugovic
- Manuel Jimenez, Jr.
- Davy Jones
- Robert L. Jordan, Jr.
District Eight (Noe Valley)
- Incumbent: Bevan Dufty
Bevan Dufty's motto in his 2002 campaign was "It's All about the Neighborhood." During his four years as a supervisor, that motto has guided his work on scores of neighborhood concerns, including homelessness, clean streets, neighborhood and park beautification, traffic calming, pedestrian and bicycle safety, youth programs and better schools, small business vitality and funding increases for HIV/AIDS and substance abuse prevention and treatment. Bevan has worked closely with Mayor Gavin Newsom, city department heads and staff to help make San Francisco, its neighborhoods and its economy better and stronger.
If you are interested in assisting Bevan, go to his web site: www.bevandufty.com - Challengers: Alix Rosenthal Starchild
District Ten (The Bayview)
- Incumbent: Sophie Maxwell
- Challengers: Sala Chandler
- Rodney Hampton, Jr.
- Marie Harrison
- Espanola Jackson
- Dwayne Jusino
- Charlie Walker
Ballot Measures (Many of the measures on this November's ballot seek funds for various purposes. This year's budget for the City and County of San Francisco is the largest in the city's history—$5.7 billion. In voting on measures with fiscal impacts, ask yourself before casting your vote whether the citizens of San Francisco are getting fair value for the billions the city collects in taxes. Following is a list of the local measures that will appear on the November 2006 ballot and in cases where the measure is either real estate-related or has fiscal impact, a brief description of the measure is provided, along with the position recommendation of the Association, if applicable.
Bond Measures (Requires, in the case of the school bond, a 55 percent vote for passage.)
- Proposition A. School Facilities Bond—Raises $450 million for facilities improvements for the San Francisco School District. (Cost: $33 per $100,000 of assessed value each year.)
Charter Amendments (Requires a two-thirds vote for passage)
- Proposition B. Parental Leave Policies
- Proposition C. Setting Salaries of Certain Elected Officials—Requires the base salaries of the mayor, city attorney, district attorney, public defender, assessor-recorder, treasurer and sheriff to be adjusted every five years based on the average of salaries of comparable officials in other Bay Area counties (Submitted by Aaron Peskin)
Ordinances (Requires a simple majority vote for passage)
- Proposition D. Privacy Protection
- Proposition E. Parking Tax Surcharge—Increase the parking tax rate in the city by 40 percent to make the rate second highest in the nation. (Submitted by Supervisor Chris Daly) Association Recommendation: Vote NO
- Proposition F. Paid Sick Days—Requires San Francisco employers with less than 11 employees to provide five sick days a year per worker and businesses with more than 10 employees to provide nine days a year per worker (Submitter by Supervisor Chris Daly)Association Recommendation: Vote NO
- Proposition G. Small Business Protection Act—Requires a conditional use authorization for the establishment of a formula retail use in neighborhood commercial districts. Also provides that, “Nothing herein shall preclude the Board of Supervisors from adopting more restrictive provisions for conditional use authorization of formula retail use or prohibiting formula retail use in any neighborhood commercial use.” Association Recommendation: Vote NO
- Proposition H. Relocation Benefits for No-Fault Evictions—Requires landlords who evict tenants for capital improvement projects or by invoking the power of State law known as the Ellis Act (allows landlords to evict tenants if they want to get out of the rental business) to pay tenants $4,500 in relocation costs, which is a $3,500 increase. (Submitted by Supervisor Ross Mirkarimi). Association Recommendation: Vote NO
Declaration of Policies (Requires a simple majority vote for passage)
- Proposition I. Monthly Board Appearances by the Mayor. Association Recommendation: Vote NO
- Proposition J. Impeachment of Bush/Cheney
- Proposition K. Housing for Seniors and People with Disabilities—The city would explore ways to meet the need for affordable housing for seniors with limited means and the disabled. (Submitted by Supervisor Chris Daly)
- San Francisco Association of REALTORS®
Focus on San Francisco Neighborhoods - Sea Cliff
Sea Cliff as described on the
SFResidence neighborhoods page:
"Sea Cliff is dominated by Spanish architecture homes perched on the cliffs east of Golden Gate Bridge. Certainly one of the most desirable and picturesque residential areas in the U.S. Success exudes itself from any of houses, stars and theatrical types such as Robin Williams, Sharon Stone, and Carol Hayes of Hayes Productions all have homes here. The Presidio Trust sits to its east with remains of the Land's End Park and the famous Sutro Baths of 1896 to the west. The California Palace of the Legion of Honor museum built in 1924 ( inspired by the Palais de la Legion in Paris), home of Rodin's "The Thinker", and the public golf course of Lincoln Park all share the Sea Cliff address!"
Wikipedia says:
"Sea Cliff (sometimes spelled Seacliff) is a very affluent neighborhood located in northwestern
San Francisco,
California. It is adjacent to the
Pacific Ocean and
Baker Beach, southwest of the
Presidio of San Francisco and east of
Lincoln Park. The Sea Cliff neighborhood is renowned for the large size of its homes (which can resemble large suburban estates) as well as for the impressive views from many of the homes of the Pacific Ocean, the
Golden Gate Bridge and the
Marin Headlands.
"A small public beach named
China Beach is located in the neighborhood.
"Some of the neighborhood's more famous current and past residents have included actor
Robin Williams, actress
Sharon Stone, theatrical producer
Carole Shorenstein Hays, and musician
Chris Isaak."
For more information on other neighborhoods and street maps visit our
website.
- Mick OrtonPrevious Neighborhoods:Castro - Cow Hollow - Diamond Heights - Golden Gate Park - Lake Street - Laurel Heights - The Marina - Nob Hill - Noe Valley - Outer Richmond - Pacific Heights - Russian Hill - Sacramento Street - St. Francis Wood - Sea Cliff - Telegraph Hill
RealBlogging launches new website!
Our editorial from August 25 was printed as an editorial in response to a post on
RealBlogging, a new real estate blog which is gaining popularity. Though our comments were taken out of context and some changes were made, it essentially said what was published previously on our
site.
- Mick Orton
Secret to Tax Savings for Real Estate Investors
Diane Kennedy is a Rich Dad advisor for
Robert Kiyosaki (
www.RichDad.com) and has her own website
www.TaxLoopholes.com. She holds the Maui Mastermind seminars on real estate investing every year and is also the co-author of the new book, Maui Millionaires. We thought you might find her recent e-mail interesting:
- Mick Orton===================================
"I've talked to a lot of people about real estate investments around the country these past few months. Some markets are seeing a real slow down and others are seeing steady growth. This past week, I saw an episode of 'Flip This House' (a reality show that documents the fix and flip method to riches by taking broken down houses and turning them into mansions that sell almost instantaneously) of a young couple in Sacramento, who against the advice of all the real estate experts they asked, bought a house to fix and flip. They figured a budget of $30,000 and something like 3 months to finish it. A month over the timeline and $15,000 over budget, they finished – to a dead market. In fact, they said in one square mile there were 77 homes for sale. They waited months and months and finally got an offer they eagerly accepted that would cause a break even on the house.
"I suppose that brings up the question, 'Whose advice do you trust?' In this case, I just bet they'd attended a real estate seminar or read a book that told them to never listen to the people who say it can't be done, or shouldn't be done. Yet, in reality, caution from someone who is an expert is a really good thing to know. It's not a matter of just shopping opinions until you find the opinion of someone who agrees with you. It's finding someone who has proven success in the field you want and then following what they say.
"I'll never forget what Kelly, one of the Maui Millionaires highlighted in my new book,
Maui Millionaires (co-authored with my friend and real estate mentor, David Finkel) had to say when asked how she went from $77,000 in credit card debt to over $1,000,000 in net worth in just a little less than two years. How did she do it? She explained that she just found people she trusted and did what they told her to do. You don't have to reinvent the wheel. You don't have to research millions of strategies to find the one right one that will work. Just see what's worked for other people and do the same! (By the way, there were lots of short cuts to wealth that Kelly discovered along the way. That's what made the book so much fun to write. It's the secrets of the successful that were proven again and again at Maui Mastermind, the exclusive wealth retreat that is sold out months and months in advance.)
"Good advisors make you money, save you headaches and make life just generally easier. If you're interested in learning more from some of my personal advisors, please go to
www.dkapproved.com. And, if you're really ready to step up and take some action, contact any of the featured advisors with a specific question and learn how you can get them on your team, by clicking on their article or
here to contact them directly."
"If you're in real estate today, you need to be smarter and quicker than the next guy. And, never ever pay more tax than you legally are responsible for."
- Diane Kennedy
San Francisco Real Estate Market Update for 8/14 - 8/20/06
Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area said in his latest weekly report: "The most significant factor affecting the market today is the media. You can’t read a newspaper, e-mail news service, watch T.V. or listen on the radio without hearing a story that the housing market is bust. All these reports tend to lump vast regional areas or the entire country together. The media has been waiting for the bubble to burst for the last four years. Journalism is supposed to be objective reporting, although currently there is a certain amount of glee in the reporters’ accounts. The only show I have watched that has given a least a balanced picture is the Nick Cavuto show. At least he had analysts, not interviewees tied to the industry, who presented both sides of the picture.
"None of us want to live in denial. Yes the market has changed, but it is not bust. Yes, in some areas prices have retreated. Is that a negative? No. Appreciation has been spectacular over the last 3 years. In fact, in most marketplaces the cumulative appreciation has been plus 50%. If it backs down 10 or 15% these are still incredible returns as real estate is a leveraged investment. Real estate has never been perceived as a short term investment, but most financial advisors will tell you real estate is a premier long term investment.
"Now back to last week’s view of the market. It is a kaleidoscope. It seems no two markets are the same. Even where we have two offices near each other the experience is different. With that said, there are a couple of trends. First agents are reporting a new wave of buyers looking for homes. These are buyers that are new to the market place. This is new demand that will be exercising itself. Secondly, more offices are reporting that inventories are decreasing. We may have reached the nadir of increasing inventories. Supplies will decline as more sellers who do not have a true need to sell, as we see more reductions that create sales and as the number of new listings hitting the market diminish inventory. As supplies come in balance with demand the market will find its equilibrium.
"Again the SF/Peninsula had the highest percentage of multiple offers, although Berkeley, Oakland/Piedmont and So Marin had strong multiple percentages too. Open house activity was all over the map---from very active to exceedingly slow. First time opens certainly had the strongest showings. A first time open home in Albany experienced 53 groups and a chic condo listing in the Gourmet Ghetto of Berkeley had 40 groups visit.
"The drivers of sales are still strategic pricing and exceptional merchandising---staging, obtaining pre-sale reports and taking care of any deferred maintenance. Those houses that came on the market overpriced are now selling when reduced to the appropriate price levels. We have even seen a few attract multiple offers. Buyers are certainly price savvy. Keen negotiation is now the key to successful transactions.
"This week’s numbers are as follows: 6 offices reported increasing inventories, 12 steady and 13 decreasing---sales activity showed 6 offices with increasing activity, 17 steady and 8 decreasing."
- Avram Goldman* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with "weekly market report" in the subject line.
Focus on San Francisco Neighborhoods - Cow Hollow
Cow Hollow as described on the
SFResidence neighborhoods page:
"In the 1800's vegetable gardens and dairy farms in Cow Hollow feed the citizens of the then perceived remote city near by, San Francisco. Close by was the underwater soon to be land filled district that housed the 1915 Panama Pacific Exposition. A magnificent structure, the Palace of Fine Arts, designed by Bernard Maybeck stands today. Filled with many Mediterranean-style flats and apartments, the once sleepy commercial street Chestnut St. is now the busy commercial thoroughfare on which many small restaurants, old deli's, upscale retail stores such as Pottery Barn preside. The Marina greens give way to kite flying, volleyball games, endless dog walkers, a nest where many of the privileged can dock their sailboats at the St. Francis Yacht Club and breathtaking views of the Golden Gate Bridge and Marin County."
For more information on other neighborhoods and street maps visit our
website.
- Mick OrtonPrevious neighborhoods: Castro - Cow Hollow - Diamond Heights - Golden Gate Park - Lake Street - Laurel Heights - The Marina - Nob Hill - Noe Valley - Outer Richmond - Pacific Heights - Russian Hill - Sacramento Street - St. Francis Wood - Sea Cliff - Telegraph Hill
Focus on San Francisco Neighborhoods - Pacific Heights
Pacific Heights as described on the
San Francisco Chronicle neighborhoods page:
"This privileged, elegant neighborhood embodies Hollywood's vision of San Francisco, and its blocks of Victorian mansions and its Cinemascope views of the Bay and the Golden Gate Bridge make the area a perennial favorite with visitors to the city. San Francisco locals tend to be a bit more cynical about the exclusive air of Pacific Heights, but that doesn't mean you won't catch residents of other neighborhoods making a special trip for the eclectic, upscale shopping opportunities that Fillmore Street offers.
"The neighborhood is loosely bordered by Van Ness and Presidio avenues and Pine and Vallejo streets and was first colonized by the nouveau riche of the late 1800s when the construction of a new cable-car line made the area accessible. The extravagant dwellings that characterize the district today stand as testimony to the desire of those early residents to impress their Nob Hill neighbors.
"That legacy of luxury has persisted, and the neighborhood remains generally quiet and residential, with the majority of its activity clustered around Fillmore Street. For the most part, the activity of choice is shopping, with an emphasis on costly women's clothing and high-stakes luxury items. The strip is also peppered with nice gift boutiques, bath-and-body shops and consignment stores. But if you don't feel like spending money, it can be fun to settle in at a sidewalk café and watch everyone else parade by. The area draws a variety of American and international tourists and is always well populated by impossibly groomed and outfitted locals who seem capable of strolling through a windstorm without having a hair get out of place."
- San Francisco ChronicleOther highlights on this page include:
- Best time to go
- Sights & culture
- Shopping
- Restaurants (including reviews!)
- Nightlife
For more information on other neighborhoods and street maps visit our website.
- Mick Orton
Other neighborhoods:
Castro - Cow Hollow - Diamond Heights - Golden Gate Park - Lake Street - Laurel Heights - The Marina - Nob Hill - Noe Valley - Outer Richmond - Pacific Heights - Russian Hill - Sacramento Street - St. Francis Wood - Sea Cliff - Telegraph Hill
More Bad News, Real Estate Crash Arrives - Oh, really???
As I write this, we are in Chicago. Coldwell Banker is holding its convention called the
Elite Retreat where top agents from all over the country meet to discuss industry trends, new technology and use the time to network with each other. Every year we meet reliable agents in other areas to whom we can refer people we meet who need an agent outside the San Francisco area.
We also use this time to learn about how the markets are doing in areas other than ours. Everyone we talked to in markets from New York, to Florida, to Georgia to Arizona, are all saying the same thing. Real estate is good! In fact, "more normal market" is what we are heaing,
without exception!
For some reason, the media wants to talk about "bubbles bursting" and "housing crashes" and "bad news" and so on. We feel this is a perception they are creating, even though real estate markets are just returning to "normal".
As you will read in the article below,
NewsMax and
MoneyNews are still reporting declining home sales all over the country. However, in our office (TRI Coldwell Banker, Van Ness, San Francisco) we saw 16-20 ratified deals just last week. This would indicate that the market is still very strong (despite the bad press).
In fact, buyers may have the edge right now. As they sit back and wait, houses remain on the market longer giving them a chance to make offers under the asking price; almost unheard of in San Francisco. But we most recently we have seen properties being withdrawn at one price and then relisted at a lower price. In retail, this is seen as good news because bargains abound. Who doesn't want to buy that plasma television at a lower price? So why is it not good news in real estate? Seems like the same principal would apply here too.
Once again Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area weighs in weekly on the state of the market for our area, and his report may be seen
here.
Anyway, the news is what it is. So here is Thursday's
NewsMax article.
- Mick Orton
Existing Home Sales Drop in July
MoneyNews
Wednesday, Aug. 23, 2006
Sales of previously owned homes plunged in July to the lowest level in 2 1/2 years and the inventory of unsold homes climbed to a new record high, fresh signs that the housing market has lost steam.
The National Association of Realtors reported Wednesday that sales of existing homes and condominiums dropped by 4.1 percent in July from June to a seasonally adjusted annual rate of 6.33 million. That was the lowest level since January 2004.
The latest snapshot of housing activity was weaker than analysts anticipated. Economists were forecasting the pace of sales to fall to 6.55 million.
"The housing sector is fragile," said David Lereah, the association's chief economist.
The median price of a home sold last month was $230,000. That was up just 0.9 percent from the same month last year and marked the smallest year-over-year increase since May 1995. The median price is the middle point, where half sell for more and half sell for less.
To read the whole article click
here.
- MoneyNews
San Francisco Real Estate Market Update for 8/7 - 8/13/06
Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area said in his latest weekly report: "It’s that same old song----buyers are slow to write and sellers are still looking for reality. As our Sebastopol manager put it, buyers have glue in their pockets and sellers have sugar plums on their minds. A bit emphatic, but probably not too far from the truth in Sonoma county. For the most part open house activity is still decent and in some cases still quite active as evidenced by the 100 groups that came through a new Millbrae listing. It is still amazing given the current market that a third of our offices had 20% or more multiple offers. Interesting to note is we are seeing a few marketplaces that are experiencing both decreasing listings and sales. This could primarily be due to fewer listings coming on the market at the same time more listings expiring, while sales could be impacted by prime vacation season before children go back to school.
"Nevertheless when buyers see value they move. In Half Moon Bay where the market is beginning to pick up now that Hwy. 1 is open had a $1.4 mil new construction listing that had several offers going over by $400,000. Not the rule, but certainly shows that there are still a number of serious buyers out there. Overall we have seen a slowing this month, although in the past week momentum seems to be building toward the Fall market.
"Price reductions do motivate buyers as seen by several listings that have been on for some time receiving multiple offers, however sales prices still went below the new list price. Merchandising is still the name of the game. Houses still need to be presented in their best light, this includes “reality pricing”, staging and dealing with any deferred maintenance.
"A recent report in the newspaper said that this July was the slowest July in 10 years. That would put it at the 1996 market. As I recall 1996 was a nicely balanced market. Both consumers and the real estate industry have been indulged by a very active market and accelerating appreciation over the last 10 years. Now we are back to a regular real estate market.
"The numbers for the week of August 7th-13th are as follows: 4 offices showed increasing listing inventories, 14 steady and 10 decreasing----6 offices reported increasing sales, 15 steady and 9 declining."
- Avram Goldman* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with "weekly market report" in the subject line.
Who should you believe? Housing bust or slowdown? Mortgage rates rising or falling?
Are you as confused as I am? In this editorial I would like to point out a few things I have seen in the media the last couple of weeks or so. Not being a Realtor gives me the freedom to voice my opinion on market changes a little easier than a licensed real estate agent.
First we have been hearing how the housing market is in for a correction, and that there will be wailing and gnashing of teeth as we have seen reporting recently from
NewMax (see the articles from
July 29,
July 30,
August 12 and
August 19 which were posted previously on our Blog) as well as other sources. And almost once a week on the evening news is a story about how the housing market is falling on hard times. The press seems to love bad news. In San Francisco we have seen a slow down in the number of deals being made. But prices seem to be holding relatively steady. There are some price reductions, but mostly from people who have become "velocitized" by the frenzied market of a year ago and priced their homes too high to begin with.
However, let me share the gist of an article in the August 2006 publication of
Realtor Magazine. On page 22 in an article titled "Harvard: slowdown is merely a breather" the writer stated, "Cooling home sales nationwide won't last long because continuing strong household growth will fuel more housing demand." and cites a study done by
Harvard University's Joint Center for Housing Studies as the basis for its conclusion. The article summarized, "Markets are seeing neither big employment drops nor overbuilding in housing supply - two conditions that precipitated price falls in the past."
Then on Sunday, August 20 in the
San Francisco Chronicle there was a related article that supported the theory of a strong market entitled, "High home prices hamper fed recruiters" reprinted from the Washington Post which said, "A steady climb of housing prices and other living costs in
San Francisco and Los Angeles is making it difficult for federal agencies to recruit and retain employees in those areas..."
So if you can read between the lines, doesn't this indicate that the
San Francisco real estate market is still alive and well? Remember there are several factors that put
San Francisco in a unique category.
One is the amount of wealth that is found in the City.
Two, it is a beautiful place where many people want to own a second or vacation homes.
Three, the city of
San Francisco area is a finite area of only 7 miles by 7 miles with very little construction of new homes or condominiums (most of the construction you see are remodels). And
four, those who do venture into the arena of building new homes and condos find that the San Francisco City government is heavy on bureaucracy so it takes a long time to get plans approved and permits issued. All together these reasons cause a short supply ahd high demand.
Last but not least, another factor that will surely affect what happens in the market is interest rates. As you probably know by now, the Fed has decided to postpone raising interest rates for the time being as a slowing economy has eased their concerns about inflation. As a result, mortgage rates have dropped for the
4th consecutive week according to the Associated Press in an article which appeared in the same Sunday, August 20 San Francisco Chronicle issue quoted above.
So what does this all mean? Who has the crystal ball? As we have said before, real estate investing is a long term strategy. Given the information above, it's quite possible that the slowdown is only temporary and the strong economy could fuel another housing boom in the near future.
We'd love to hear your opinions on this topic! Send e-mails to
info@sfresidence.com.
- Mick Orton
Glossary of real estate terms - San Francisco and beyond - Part 3
Below is the final part 3 - glossary of real estate terms (Part 1 may be seen
here.)
(Part 2 may be seen
here.)
PMI:Private Mortgage Insurance. If the first mortgage loan-to-value ratio is higher than 80 percent, a special insurance is required and typically paid monthly or annually to protect the lender should the loan go into default.
Prepaids:
Distinct from Closing Costs, these include recurring expenses a buyer would normally pay over time, but pays in advance at closing to set up an escrow or impound account to pay monthly for taxes and insurance. Prepaids will also include any interest due on the loan from the day of closing until the end of that month.
Quitclaim Deed:A document that releases an owner from any interest in a property.
Sales-Leaseback or Sale-Rentback:The buyer rents back the property they are purchasing to the seller for a specific period of time.
Sales Concession:A cost that is typically paid by the buyer at closing is instead paid by the seller.
Table Funding:
The ability of a lender to provide loan funds on the same day the transaction is signed by all parties.
Title Insurance:Insurance that protects your home purchase should a title problem that existed prior to the purchase be discovered after your transaction closes. There are two types of title insurance: a fee title policy insures you, the owner; a mortgage title policy protects the lender.
Walk-Through:
A buyer does a final inspection of the home prior to closing to confirm that all conditions in the purchase agreement have been satisfied.
*reprinted courtesy of
California Real Estate magazine, September 2005 issue
(Part 1 may be seen
here.)
(Part 2 may be seen
here.)
Mortgage broker versus a loan officer
A reader asks:How do I decide whether to use a mortgage broker versus a loan officer from my bank? What's the difference?
Our reply:Wikipedia defines a
mortgage broker as follows. "A mortgage broker acts as an intermediary who sources
mortgages on behalf of individuals or businesses." In other words, they can determine what loan packages you are qualified to participate in from a
variety of lending institutions.
A
loan officer from a bank only has the products and services offered by that bank.
- Christine Serventi
First time buyer has questions before purchasing a condominium in San Francisco
A reader asks:As a first time buyer I will be purchasing a condominium. As I go through these units what are the main items I should be concerned with? Some of the things that concern me are HOA dues, pet restrictions, storage and parking.
Our reply:Concerning your expenses, you need to calculate the monthly (or quarterly or annual) HOA dues into your budget. They are not usually tax deductible and are in addition to your mortgage and tax payments.
Additionally, each condominium complex has its own Home Owner's Association. Each association has its own Covenants, Conditions and Restrictions (CC&Rs) which set forth the rules for the association. To match your lifestyle, knowing if a condominium allows pets, has storage and parking gives you the freedom to have it all!
- Kathleen Macdonald
Glossary of real estate terms - San Francisco and beyond - Part 2
Below is part 2 - glossary of real estate terms
(Part 1 may be seen here.)
Closing Statement (also know as the Settlement Statement or HUD):
A document that provides an item-by-item breakdown of all costs as well as the source of funds associated with every real estate transaction. Also called a HUD-1, the name of the standard form created by the Department of Housing and Urban Development, it is required for the completion of every real estate transaction.
Contingency Clauses:
These are terms in a contract that give a party to the contract a legal excuse for not performing (i.e. a buyer does not have to buy the property if the buyer does not approve of an inspection of the property or the buyer is not able to obtain a loan.) Contingency clauses typically have a set number of days by which the contingency must be removed from the contract or the decision made not to proceed with the sale.
Conventional Mortgage:
A home loan that is not insured or guaranteed by an agency of the federal government.
Covenants, Conditions and Restrictions (CC&Rs):
This document establishes the rights and responsibilities of owners typically within a subdivision, often enforced by an association of owners organized to maintain common areas owned by all owners within the subdivision.
Days on Market:
The number of days that a property is listed as available for sale before being sold or removed from the marketplace.
Earnest Money:
Money a buyer provides as a deposit when an offer is made to purchase a property.
Easement:
Access given to a third party to use a portion of one's property for a specific purpose, such as for utilities or a driveway.
Encroachment:
Any structure, such as a fence, that extends into a property owned by someone else.
Encumbrance:
A claim or a lien that appears on the title that, unless resolved, can interfere with the transfer of property.
Escrow Agent or Closing Agent:
A person who is impartially responsible to both the buyer and seller (or borrower and lender) to make certain that all of the terms and conditions of the real estate transaction (or loan) are completed. Also known as a Settlement Agent.
Fee Simple:
A type of ownership of property, it entitles the owner to use their property as they see fit, in accordance with state and local laws.
Insurance Binder:
Proof of coverage required by a lender to show that a sufficient hazard insurance policy exists on a property. This document must be provided to a lender by an insurance agent before the lender will agree to loan money for the purchase of the property.
Liquidated Damages:
The buyer and the seller determine in advance a set amount of money to be paid should one of the parties fail to meet the terms of their Purchase and Sales Agreement.
Mediation:
When a mortgage payment does not cover all of the interest that is due, the unpaid amount is added to the principal balance, causing the loan balance to increase instead of decrease.
Negative Amortization:
When a mortgage payment does not cover all of the interest that is due, the unpaid amount is added to the principal balance, causing the loan balance to increase instead of decrease.
Non-Conforming Loan (known as a Jumbo Loan):
Any loan that is too large to be purchased by the secondary marketing firms, Fannie Mae or Freddie Mac. (In most markets the single family dwelling limit is $359,650, with higher amounts for higher cost areas.)
PITI:
Principal, Interest, Taxes and Insurance. The total monthly payment for a property with an amortizing loan that includes the principal, interest, taxes and insurance.
*reprinted courtesy of California Real Estate magazine, September 2005 issue
Part 1 may be seen here.
Leading Indicators Forecast Housing Crash
This article was posted today from
NewsMax.com. Again with the negativity in forecasting gloom and doom about a coming housing crash. Remember that all markets are not created equal.
What we want to do on our website is point to what is
actually happening in the
San Francisco real estate market by giving you an accurate
weekly appraisal by
Avram Goldman, President and COO of
Coldwell Banker, San Francisco Bay Area .
Here's what Newsmax is reporting.
- Mick Orton===================================
A key gauge of future economic activity fell unexpectedly for the fourth time this year amid signs of a slowing housing market, according to a report released by a private research group Thursday.
The so-called U.S. index of Leading Indicators declined 0.1 percent in July to 138.1 after inching up 0.1 percent a month earlier, according to the New York-based Conference Board. Wall Street economists in a Reuters survey were expecting the index to advance by a modest 0.1 percent.
"The economy is cooling but it isn't likely to stall out," said the firm's labor economist Ken Goldstein. "The cooling off in the housing market has been more pronounced, however, and is one factor in the softer domestic pace of economic activity."
Meanwhile, the coincident index - a measure of current economic activity -rose 0.2 percent last month, building on a 0.2 percent gain a month earlier. So far this year, this index has logged monthly gains.
The leading index measures a basket of economic indicators ranging from unemployment benefit claims to building permits and is intended to forecast economic trends up to six months ahead.
According to the Conference Board, half of the ten indicators that make up the leading index increased in July, but it was mainly a decline in building permits and a steady number of weekly claims for jobless benefits that drove down the index.
© 2006 Reuters.
Editor's Note:
Housing prices nationwide could fall by as much as 40% over the next few years. Here are the five easy ways to protect yourself and profit from the coming real estate crisis.
Go here now.
- NewsMax.com
Pre-qualified versus pre-approved by a lender
A reader asks:What is the difference between being "pre-qualified" and "pre-approved"? What should I get from my lender when I want to make an offer on a house?
Our reply:
Depending on the vocabulary of your mortgage broker or loan officer, "pre-qualified" can be a general terms to describe that your situation has been reviewed by a loan professional and deemed to be acceptable. "Pre-approved" can be a more specific term to describe that your application for a loan has been approved and they are ready to process your purchase contract to fund a loan.
It is recommended that you have a "pre-approval" letter prepared to go along with each individual offer you make on a property. The letter should include the address of the property and the price you are offering to pay for it.
- Kathleen Macdonald* related reading - About.com has a nice article called "You're Only 11 Steps Away From Buying a Home" by Janet Wickell which lists 11 things to consider before setting out to buy your first home.
California luxury home values post small gains
This article was posted yesterday from the California Association of Realtors. They, in turn, quote First Republic Bank's "Prestige Home Index" report. Here's what they have to say:===================================Luxury home prices in Los Angeles, San Diego, and San Francisco continued to increase during the second quarter of 2006 but at a slower pace, according to the First Republic Prestige Home Index™, which tracks homes valued at more than $1 million in key California markets. In Southern California, sales of homes valued $10 million or higher have remained strong, while sales in the lower- to mid-tiers of the luxury home market have slowed. In San Francisco, the entire market for high-end homes has cooled.According to the report, the value of luxury homes in Los Angeles edged up 3 percent from first quarter and 12.8 percent compared with the second quarter of 2005. The average value of a high-end home in Los Angeles now stands at a record $2.36 million. The prices of luxury homes in San Diego and San Francisco also recorded gains during second quarter, rising 6.4 percent and 4.8 percent, respectively, from a year ago. The average luxury home in San Diego is $2.14 million, while the average luxury home in San Francisco is valued at $2.93 million.- C.A.R. NewslineHere is the link to the latest "Prestige Home Index" report from First Republic Bank which changes periodically. Read the August 16th report below:===================================Luxury Home Values Rise in Second Quarter of 2006 Modest Gains in Los Angeles, San Diego and San Francisco August 16, 2006
SAN FRANCISCO — Luxury home values posted small gains in Los Angeles, San Diego and San Francisco in the second quarter of 2006, according to the First Republic Prestige Home Index™ by First Republic Bank (NYSE: FRC), a leading provider of wealth management and private banking services.The Index, which has tracked luxury homes since 1985, found: - San Francisco Bay Area values increased 0.3% from the first quarter of 2006 to the second quarter of 2006 and gained 4.8% from a year ago. The average luxury home in San Francisco is now a record $2.93 million, up $134,978 from a year ago.
"Over the past year, the luxury home market in California has transitioned to a more normal, stable market in which properties sell at a more measured and less frenetic pace," said Katherine August-deWilde, Chief Operating Officer of First Republic Bank. "Luxury home values continue to increase, but at a much slower rate due to rising inventory and interest rates. Homes are being priced more aggressively to sell because buyers have more options."
First Republic Bank produces the Prestige Home Index each quarter with Fiserv CSW Inc., a leading provider of automated property valuation services and home price metrics to U.S. financial institutions. Historical results of the Index are accessible at www.firstrepublic.com.
In San Francisco, values were up 0.3% compared to the first quarter—the slowest rate of appreciation since the third quarter of 2004. Over the past two years, quarterly increases in the San Francisco Bay Area have been no greater than 6%.
Agents in the San Francisco Bay Area said that well-priced homes in great locations are selling very well, but the market overall has weakened over the past year.
"The market between $2 million and $6 million is really strong because of continuing demand," said Caroline Kahn Werboff of Hill & Co. in San Francisco. "If the house is priced fairly, you're seeing multiple offers at or a little over the asking price. Interest rates would have to get up to double digits to make a significant difference." In the high end of the market, Kahn Werboff said there have been some price reductions. She said some buyers are reluctant because they believe prices will decline.
David Gowan of TRI Coldwell Banker said the market is more balanced, although slower than it has been in recent years. "Instead of selling in two weeks, properties are selling in two months, just like they would in a normal market. What we've seen the past six years is unusual." Gowan said buyers are generally making offers slightly under the asking price.
In San Francisco's East Bay, the market is slowing. "Over $2 million, our inventory is up and buyers aren't in a terrible hurry," said Tara Rochlin of Village Associates in Orinda. "We're seeing more sellers willing to negotiate and lower their prices. We're headed toward a more balanced market, which is better for everyone over the long term."
- First Republic Bank's "Prestige Home Index" Report
Buyer is requesting an extension on the closing date for San Francisco real estate
A reader asks:I have signed a contract for my property to close in 30 days. It is currently 2 weeks before closing, and the Buyer would like to extend closing by 1 week. I am not opposed to this, but can I request additional money (or anything else) for the inconvenience?
Our reply:A key idea to remember in any agreement is: EVERYTHING IS NEGIOTIABLE!! However, much of what you ask for depends on what kind of market we are in..... for example if it is a seller's market and the buyer wants to extend the closing, the seller can expect to be able to get some kind of compensation for the delay. A good place to start is asking for the PITI (principle, interest, taxes and insurance) that it costs the seller to hold the property. They buyer is then motivated to close escrow because it is costing them money to delay the closing.
However, if it is a buyer's market the seller may not be able to get the buyer to pay more and is just grateful to have the buyer close escrow. But you can agree to a one week extension and in that agreement put in a large penalty if the buyer does not close after one week.
The key is to keep the buyer motivated to close escrow as soon as possible and the best way to do that is it have it cost the buyer money to delay.- Janis Stone
Counter offers when buying San Francisco Real Estate
A reader asks:If I make an offer on a home and the Seller comes back with a counter offer, which I decide to sign, can they decide to withdraw from the contract without any penalties?
Our reply:If you have signed the counter offer within the expiration period and the counter offer has been delivered to the seller or seller's agent as specified in the contract then it is a binding contract. It remains so until one of the parties becomes in breach of contract by not complying with one or more of the terms of the agreement or does not approve of some contingency.
So if you have a question about whether a seller has to pay a penalty for withdrawing, you would want to take the contract to a good real estate attorney. Only an attorney can tell what your legal options might be after reviewing all of the documents. Do not depend on the advice of a real estate agent, friend or relative unless they are an experienced real estate attorney!! Remember, you get what you pay for!- Janis Stone
No Parking in San Francisco Condominium - Parking Permits
A reader asks:There is no parking in the condominium building I am considering buying. How do I get a permit to park on the street in San Francisco?Our reply:On their website, the City of San Francisco says, "The preferential residential parking system was established in 1976 to preserve neighborhood living within a major urban center. It is designed to promote the safety, health and welfare of all San Francisco residents by reducing unnecessary personal motor vehicle travel, noise and pollution, and by promoting improvements in air quality, convenience and attractiveness of urban residential living, and increased use of public mass transit. The program’s main goal is to provide more parking spaces for residents by discouraging long-term parking by people who do not live in the area. There are now 27 residential permit areas in the City. "After all this wonderful rhetoric, the parking permit system is just another way for the City to generate revenue. They continue, "You are eligible to purchase a permit for your vehicle if you live in an established residential permit parking area. A clear indication that you live in a permit parking area is if a residential permit parking sign is displayed on your block. However, some addresses on meteredstreets are eligible where signs will not be posted. To confirm whether or not your address is eligible for a permit, call the Traffic Engineering Division at 701-4686. A block not currently part of an RPP area may be included in one through a petitioning and legislativeprocess that takes approximately six months."To be fair, the law was originally created because people who lived outside of San Francisco and worked in the City would drive in, park their cars and then take public transit to their jobs leaving no parking for the people who lived in the different neighborhoods.There are restrictions on the number of permits that will be issued per address (currently limited to 4 per address) but exceptions may be filed to the Department of Public Transit. There are also limitations if you are a business. Check the San Francisco City website for the latest details.- Janis Stone
Tenancy In Common financing problem with more than 4 units
According to the Sunday San Francisco Chronicle, Carol Lloyd, staff writer, posted an article on the troubles of a couple trying to get rid of an adjustable loan after buying a TIC in a 10 unit building. Apparently anything over 4 units requires a commercial loan which triggered higher interest rates and required a higher loan to value ratio. Although it seemed like a good idea at the time, now the couple is having major concerns. Read their story here.- Mick Orton
San Francisco Real Estate Market Update for 7/31 - 8/6/06
Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area said in his latest weekly report: It is officially summer. Vacations are in full force. The market is in slow motion. The same consistent pattern exists between geographic regions. The SF/Peninsula still is receiving the largest number of multiple offers. However, these transactions with some exceptions are going for list price or a little above. Multiples are few are far between in the North and East Bay regions.
Inventory growth has slowed due to fewer listings coming on the market and more properties expiring. Price reductions are becoming a way of life. The market is finding its level. Buyers are exceedingly deliberate in their decision making. Most don’t have a sense of urgency. These buyers are very knowledgeable. What a terrific time for buyers who now find much to choose from, still very affordable interest rates and the ability to negotiate. All of this was not the case a year ago.
Most sellers are just beginning to realize that market conditions have changed from the last several years. For those savvy sellers who know they have to do all they can to prepare their properties for the market and price competitively are reaping the benefits, because they are setting themselves apart. When buyers see a value they are like bees to honey. A few examples are the 9 offers on a Mill Valley listing at $1.1 mil. that went well over asking, or the 17 offers in Palo Alto or the 8 offers on a Monterrey Peninsula property. We are seeing those sellers who don’t have an immediate need to sell are beginning to drop out of the market.
It is challenging to predict where the market will go, particularly with summer seasonality. Activity normally picks up as we enter the fall months. If that happens, it portends positive notes for the real estate market. Given the Bay Area positive job growth figures, the diversity of our local economy, the attributes of a desirable lifestyle and the demographics of immigrant groups, the local market should be positioned to withstand any challenges, just as it did after the dot.com fiasco. - Avram Goldman* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with "weekly market report" in the subject line.
Unsold homes at record levels
This article was posted yesterday from NewMax.com. As with the previous warnings, they are predicting more gloom and doom. It seems incredibly irresponsible to anticipate that all markets are going to do the same thing at the same time. While it's true we have seen the San Francisco real estate sales climate change, activity is still quite strong and prices are holding steady with few price reductions.As we stated before, it is precisely because the Fed keeps raising interest rates that home sales are cooling, yet they are the ones reporting this potential catastrophe as if they are not complicit in what is happening! To be fair, we decided to post this information so you can make your own decision. However, real estate investing has always been a long term strategy, and we are still bullish on the San Francisco market.- Mick Orton===================================The nation’s housing market is quickly going from boom to bust. Houses are on the market longer and prices are being slashed. So the question is how much is this housing bust going to hurt the overall economy? For over two years now, we at Financial Intelligence Report have been warning that soaring U.S. real estate prices were unsustainable and that a collapse could soon occur. Sir John Templeton last October warned FIR readers that a housing bust was imminent. Now the Associated Press and scores of major U.S. and international newspapers and magazines - including the New York Times, Fortune, and The Economist - are echoing those same sentiments on their page-one stories. In fact, The Economist magazine bluntly declared that the current worldwide boom in residential real estate prices is "the biggest bubble in history." "We recognize the risk ... and we are watching it very carefully," Federal Reserve Chairman Ben Bernanke told Congress recently.The Fed has hiked interest rates 17 times during the current rate cycle. They’re currently at the highest level in more than four years. But this week, the Fed halted its rate hiking cycle. The Fed said in its statement that they see a “gradual cooling of the housing market,” which will slow the economy and moderate inflation.We’ve seen evidence of a slowing housing market practically everywhere. Yesterday, Toll Brothers reported that new contracts plunged 45 percent. Construction spending dipped. Both new housing starts and existing home sales fell. The AP points out that gains in housing prices have been the smallest in years. The inventory of homes on the market is climbing to a record level, which would likely force sellers to slash prices. “We are going from a seller's market to a buyer's market,” says David Lereah, chief economist for the National Association of realtors. “It looks like the worst is behind us and sales are starting to level off.” In addition, rising interest rates are pushing up the payment on adjustable-rate mortgages. “As interest rates increase, mortgage payments increase. Between $400 billion and $500 billion in ARMs are due to be reset by the end of 2006. The following year will be even more dramatic, when more than $1.5 trillion will be reset,” says BusinessWeek. The Wall Street Journal says, “The portion of adjustable-rate mortgages that were at least 90 days past due has climbed 141% in the past year, according to a recent study by Credit Suisse that looked at loans made to borrowers with good credit. That compares to a 27% rise in such delinquencies for fixed-rate mortgages.” “So far, the correction in housing has been orderly, but there is a significant risk that this orderly correction could become more chaotic,” said Mark Zandi, chief economist at Moody's Economy.com, to the AP. “The housing market has been driven by euphoric optimism about future house price growth. That could quickly change to dark pessimism and we could see sales and prices fall much more than expected,” Zandi said. A significant slowdown in the housing market is likely to spread to throughout the economy. Says the AP, “even a moderate slowdown could have a big impact since housing has been one of the economy's standout performers over the past five years. Low mortgage rates allowed millions of homeowners to refinance and use the savings to go on a shopping spree.”- NewsMax.com
Flipping real estate in San Francisco
A reader asks:What is "flipping"?Our reply:"Flipping" is a term used to describe buying a house or property, fixing it up and then turning around and quickly re-selling it for (hopefully) a profit. In most cases the property needs only cosmetic changes (new kitchen, bath, paint, roof), as opposed to structural construction (foundation, adding garage) - although not always. If the seller has access to a dependable construction team, lots can be accomplished in a short period of time!- Kathleen Macdonald
Fast Facts from CAR and Freddie Mac - June 2006
Calif. median home price - June 06: $575,800 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region June 06:Santa Barbara So. Coast $1,300,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region June 06:High Desert $334,790 (Source: C.A.R.)
Mortgage rates - week ending 8/3:
30-yr. fixed: 6.63%; Fees/points: 0.3%15-yr. fixed: 6.27%; Fees/points: 0.3%1-yr. adjustable: 5.69%; Fees/points: 0.7%(Source: Freddie Mac) - California Association of Realtors & Freddie Mac
Explaining Escrow and Escrow Accounts
A reader asks:
I recently moved to San Francisco and have heard the term "escrow" used when speaking of real estate. Can you please explain what escrow is and the process involved in buying a home in California?
Our reply:
Think of escrow as a non-interested 3rd party to handle the transaction, attached to neither the buyer's nor the seller's interests. As the middle man, the escrow officer oversees the transaction and holds funds. The legal-speak reads, "an escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of a particular condition or event." So essentially escrow is opened as soon as the deal is ratified by both buyer and seller and the buyer's deposit is put into an escrow account.
After the purchase is complete there may be what is called a mortgage escrow account, also known as an impound account, which is explained by alliemae.org as, "Mortgage escrow accounts ensure that homeowners' property taxes, fire and hazard insurance premiums, mortgage insurance premiums and other escrow items are paid in a timely fashion. They are a guarantee that there is always enough money to pay these bills when they are due so that the homeowner avoids the risk of lapsed insurance coverage or delinquent taxes." These are more common when property is purchased with little or no downpayment. In these instances most lenders will add extra funds to the mortgage payments which are then held in an impound account to ensure that property taxes and insurance get paid on behalf of the buyer.
- Mick Orton
Marketing strategy for San Francisco Real Estate during a slowing market
A reader asks:What is the benefit to taking a listing off the market during the 'slow' season and relisting it again when the market picks back up? Would you recommend this?Our reply:A listing often gets the best price when it's "fresh" on the market. You present it to the public all bright and shiny! So when the market slows, a property can get "stale" by sitting on the market too long. And because not that many people come to see it, it doesn't sell very quickly. In situations like that, it may be better to take the property off the market for a while and then bring it back in "primetime" as a new listing!- Kathleen Macdonald
San Francisco Real Estate Market Update for 7/24 - 7/30/06
Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area said in his latest weekly report:The theme this week is status quo----sort of. There is a change that we haven’t seen for awhile---some marketplaces showed inventories decreasing. This was due to an increased number of expired listings and fewer listings coming on the market. San Francisco and San Mateo counties are the first to see this trend. Only time will tell if this trend will continue. What it means in San Francisco and San Mateo is the reduction of months supply of inventory which helps to keep those market moving and active. As of the end of July both San Francisco and San Mateo are a little under 3 months supply which indicates a balanced to a sellers market depending on price and property class (single family residences vs. condos). Santa Clara is a little under 4 months. Alameda and Marin are at a little over 4 months---balanced to buyer’s market. Contra Costa and Sonoma counties are over 6 months showing more of a buyer’s market. As a reminder you cannot paint a whole county with a broad brush. Even in more challenged markets there are pockets where demand outstrips supply. We need to focus on what is occurring in your specific market.
Buyers are still being patient and cautious. Multiple offers have tailed off. The majority of these transactions are still occurring on the SF Peninsula. The most active price area on the Peninsula is $1-1.5 price category among single family homes. We are still observing good open house activity. This is exemplified by the 130 groups through a Burlingame open house. This is certainly not the rule. First time open listings are generating the largest crowds.
The rule is for those homes that are totally prepared for the market and priced strategically are selling quickly and at the highest prices. That means total staging and all deferred maintenance taken care of. Pricing is also critical as buyers are more price conscious than they have been over the last 8 years- Avram Goldman* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with "weekly market report" in the subject line.
Differences between personal property and real property
A reader asks:What is the difference between personal property and real property? Are items such as a chandelier or draperies included when purchasing a home?
Our reply:Personal property is considered anything that is not permanently attached to the "real property" such as a free standing stove, refrigerator, furniture, potted plants, pictures, floor lamps, table lamps, wall to wall carpet, etc.
Real Property is not only the physical structure but also is property that is permanently attached such as a built in cooktop or range, built in refrigerator, shelves permanently attached to the wall, and all light fixtures that are attached to the property, area carpets.
If you are selling or buying a property and have a question about whether or not something is real property and is included in the purchase price, be sure to specify what you want in the contract. It cannot hurt to clearly state what you want included in the purchase price to avoid disputes later in the transaction.
- Janis Stone
