Market Update - Stephanie Witt's Blog on Marin County Real Estate

Now on the Market! 511 Lovell Ave, Mill Valley

Stephanie Witt - Thursday, September 04, 2014

THE PLANS are in place to build an estate-like home of approximately 6300 SF on 2.5 acres with mesmerizing up close and personal views of Mt. Tam, blending stunning contemporary design with natural beauty and stylish sophistication!

One of Mill Valley's exceptional properties! Located on the 500 block of the Lovell Loop, this 2.5 acres of precious land is a street to street parcel which has a level entry pad and slopes gently to Cascade. The up close and personal view of Mt. Tam is mesmerizing. The privacy and sun this property affords, makes it truly a piece of land with no comparison!

Presently there is a modest 2600 square foot Klyce built home (1946) and a small cottage. Large pool, not filled due to drought, an old tennis court area. This idyllic setting has some level land, groves of trees for wandering pathways all the way to Cascade. It is more than a home, it is a destination.


Pacific Union Makes List of Fastest-Growing U.S. Companies for Second Straight Year

Stephanie Witt - Friday, August 29, 2014
August 28, 2014 by Pacific Union

Pacific Union is happy to share the news that our firm has again been named to the Inc. 5000 list, which ranks the 5,000  fastest-growing companies in the U.S. based on revenue growth from 2010 to 2013. This marks the second consecutive year that Pacific Union has been included in the list, and our firm moved up in the overall rankings substantially.Inc5000

Pacific Union closed 2013 with $5.5 billion in sales volume, for a three-year growth rate of 141 percent. And for the second year in a row, Pacific Union was the only full-service Bay Area-based real estate brokerage to make the list.

In terms of overall three-year growth ranking, Pacific Union moved up the Inc. 5000 list nearly 800 spots from last year, to 2,663.

Between 2010 and 2013, we added 179 of Northern California’s top real estate professionals. Pacific Union closed 2013 with 646 real estate professionals, the most of any California-based firm in our sectornamed to the list.

The industry accolade is one of several that Pacific Union has earned thus far in 2014. In June, The Wall Street Journal and REAL Trends ranked seven of our real estate professionals among the top 250 in the U.S. for closed 2013 sales volume. And this past spring, REAL Trends 500 Report named our firm No. 3 in the country by average home sales price.

Survey: Investors Losing Interest in Bay Area, Opening the Door for First-Time Buyers

Stephanie Witt - Saturday, August 23, 2014
August 21, 2014 by Pacific Union

Good news for Bay Area buyers: A recent survey found that investors today are far less active in the region’s real estate markets than in years past, helping to ease some of the fierce competition for homes.

Toy housesThe news is especially welcome for first-time buyers, who have struggled to compete against well-heeled investors paying all cash for starter homes and then turning them into rental properties or waiting a few months and flipping them at even higher price points.

The California Association of Realtors’ 2014 Investor Survey, conducted in May and released to the public on Wednesday, found that  investors are changing their strategies and moving away from buying homes in more popular, urban areas in favor of rural locations of the state where better deals can be found.

In 2014, nearly half (45 percent) of California investors said they purchased properties in rural counties such as Kern, Fresno, Merced, San Joaquin, and Tulare, up from 27 percent in 2013, according to the survey.

Meanwhile, 15 percent of investors purchased properties in Northern California in 2014, down significantly from 27 percent in 2013.

The organization gave an early look at some of the survey data two weeks ago, and Pacific Union reported at the time that rising home prices have curtailed investment activity in high-dollar Bay Area markets like Silicon Valley.

The survey also found that 67 percent of investors paid cash, and one-third were residents of foreign countries, with China, Mexico, Taiwan, and India being the top countries of origin. Investors owned an average of 8.3 properties in 2014, up from 6.5 properties last year.

Reflecting the recovering housing market, the majority of investment properties purchased in the last year (70 percent) were equity sales, while 18 percent were short sales and 12 percent were foreclosures.

Most investors said they made minor or no repairs to the properties, and 55 percent said they intend to sell them within six years.

(Image: Flickr/Woodleywonderworks)

Bay Area Home Prices Take Midsummer Dip

Stephanie Witt - Friday, August 22, 2014
August 20, 2014 by Pacific Union

Home prices fell from June to July across the nine-county Bay Area, the first time since January that our region has experienced a month-over-month decline.down_arrow_road

According to a just-released report from the California Association of Realtors, the median price for a single-family home in the Bay Area dropped to $760,430 in July, down 1.4 percent from June. Month-over-month appreciation across the region reached a 2014 high of 7.3 percent in March and has since been declining.

Home prices softened on a monthly basis in five of nine Bay Area counties. San Francisco saw the largest month-over-month drops of 4.7 percent, followed by Santa Clara (-4.4 percent), Marin (-2.9 percent), Alameda (-2.8 percent), and San Mateo (-1.1 percent) counties.

On the other side of the spectrum, Napa County put up the highest month-over-month gains in the state in July: 16.9 percent.

Even with the slowdown, Bay Area home prices are still far higher than July’s statewide median of about $465,000. San Mateo and Marin counties were the only in California to post median sales prices above $1 million, followed by San Francisco ($940,620), Santa Clara ($860,500), and Contra Costa ($792,240) counties.

Tight supply conditions persisted throughout the region in July, with the months’ supply of inventory unchanged from the previous month. At 2.4, the Bay Area’s MSI still strongly skews toward sellers, just as it did last July. Meanwhile, the California MSI expanded from 2.9 to 3.8 year over year, a sign that the state’s overall market is headed toward a more balanced condition.

Silicon Valley remains the Golden State’s toughest market for buyers, with San Mateo and Santa Clara counties being the only in California where the MSI was below 2.0 in July. Those two counties were also the state’s fastest moving, with homes leaving the market in about 19 days.

(Image: Flickr/ andrew j. cosgriff)

Bay Area Homebuyers to Benefit From Credit Agencies’ New, Relaxed Rules

Stephanie Witt - Friday, August 15, 2014
August 13, 2014 by Pacific Union

More people will qualify for home loans, and at lower interest rates, thanks to recent policy changes by several U.S. credit agencies.Yellow road sign bearing the word "credit"

Fair Isaac Co.’s FICO credit-scoring system garnered top headlines last week with the news that medical bills and paid-off debts would no longer be counted against consumers in computing their FICO scores. But other credit agencies have also eased their reporting rules in recent months.

The net result will be higher credit scores — perhaps an additional 25 points, Fair Isaac said — enabling some homebuyers to qualify for a loan that otherwise would have been out of reach or at a higher interest rate.

“This move will ultimately make a real difference in the lives of millions of Americans, who have been shut out of the housing market or forced to pay higher mortgage interest rates because of flawed credit scores,” Steve Brown, president of the National Association of Realtors, said in a statement. “Since the housing crash, overly restrictive lending has been the greatest obstacle to home ownership.”

The change follows a recent study by the federal Consumer Financial Protection Bureau that showed that both paid and unpaid medical debts were unfairly penalizing consumers’ credit ratings. An estimated 64 million Americans have a medical-collection item on their credit reports, according to Nick Clements of MagnifyMoney, a personal-finance website.

Two of the nation’s biggest credit bureaus also recently changed their credit-reporting policies.

Both Experian and TransUnion have added verified rental-payment data into credit files, to be used to compute a consumer’s credit score when applying for a mortgage and other type of loan. Experian said the change especially favors consumers with little or no credit history, and a TransUnion study showed that including rental data raised credit scores by 10 points or more for 20 percent of renters.

Together, the changes at Fair Isaac, Experian, and TransUnion could make a noticeable difference in Northern California real estate markets.

Bay Area residents have some of the highest credit scores in the nation, but buyers face added loan pressures here because home prices are far above national averages.

TransUnion recently revealed that the San Jose-Sunnyvale-Santa Clara metro area is tied with the Minneapolis-St. Paul area for the highest percentage of “A” credit scores in the United States, with 23.5 percent of its residents scoring between 900 and 990 on the VantageScore rating system.

The San Francisco-Oakland-Fremont metro area had the second-highest percentage of “A” scores — 22.9 percent.

But looking at the VantageScore numbers by another metric shows the challenges still facing homebuyers here: Residents of the San Jose metro area collectively have an average score of 700 on the 501-to-990 scale — a low “C” grade in terms of credit worthiness. San Francisco metro area residents have an average score of 696 — a high “D.”

Those numbers show how even in a high-scoring region like the Bay Area, plenty of consumers — and potential homebuyers — will benefit from increased credit scores.

(Image: Flickr/401(K) 2012)

Investors Slowly Back Off as California Home Prices Rise

Stephanie Witt - Friday, August 08, 2014
August 7, 2014 by Pacific Union

Increasing prices are mildly cooling investment activity as the California housing market recovery continues, but these buyers still account for a substantial portion of sales.downpayment

In the California Association of Realtors’ 2014 Investor Survey – conducted in May and later presented in a webinar – real estate professionals said that investors made up 32 percent of their business, down from 39 percent in 2013. CAR figures that rising prices likely have something to do with the slowdown.

The median sales price for a single-family home in the state was $457,160 in June, a 7 percent annual increase. The current median price in California is 86 percent above its February 2009 low of $245,230 but still 23 percent short of its peak, set in May 2007.

In Pacific Union’s Silicon Valley region, where the median single-family home price has hovered around $2.5 million for most of 2014, escalating prices have also led to a noticeable decline in investor activity, according to company Vice President David Barca.

“The investment activity that has practically disappeared is for property that can be flipped or developed,” Barca says. “Prices are now so high that investors cannot realize acceptable margins when the property comes back on the market.”

California Investor Trends and Demographics

The vast majority of investors in the state – 80 percent — purchased single-family homes, a moderate gain from 2013. Investors have been moving much faster than typical buyers this year, scooping up properties in a median time of 15 days, more the twice as fast as the overall California market is moving.

Perhaps not surprisingly, investors are primarily motivated by profit, with 58 percent citing the potential to make money as their main reason for buying. Indeed, CAR found that about three-quarters of investors expect home prices to rise in the coming year and over the next half-decade.

And perhaps fearing another housing downturn, the majority of investors don’t plan to hold for long: 55 percent expect to keep the home for less than six years.

The survey also found that home flips across the state have increased on an annual basis, up from 20 percent in 2013 to 28 percent this year. Like the decrease in investment activity, CAR says that price appreciation is probably the main factor driving the trend.

Most of California’s real estate investors already have skin in the game, with 83 percent replying that they own at least one other property. Investors had an average age of 51 and skewed 75 percent male.

And as one might expect, the majority of Golden State investors are affluent and liquid: 58 percent earned more than $200,000 per year, and two-thirds paid all cash for their home.

CAR’s data shows that the state saw a slight 3 percent decrease in international investors from a year ago, but overseas buyers still make up about one-third of all California investors. China was the most prevalent country of origin for international investors.

But even though most California investors plan to sell in less than six years, Chinese buyers in the Bay Area don’t typically make deals to turn a quick buck, according to Pacific Union CEO Mark A. McLaughlin.

“It’s added a demographic of buyers who generally take a long-term view,” McLaughlin told KPIX in a televised interview in June. “They’re not sellers in the next five to seven years. So it is going to drive housing prices up.”

McLaughlin offered his in-depth thoughts on Chinese homebuyers in the Bay Area in a May interview with SFGate. And earlier this week, he explained Pacific Union’s unique China Concierge program in an interview with Real Estate Coaching Radio.

(Photo: Flickr/Steven Depolo)

SOLD! 205 Lovell Ave in Mill Valle

Stephanie Witt - Wednesday, August 06, 2014

205 Lovell Ave in Mill Valley closed escrow today.

Sold for $1,375,000.

Are Mortgage Rules Tightening? Relaxing? It Depends on Which Lender You Ask.

Stephanie Witt - Wednesday, July 30, 2014
July 30, 2014 by Pacific Union

A survey of mortgage lenders shows a widening gap in qualifying loan standards over the past six months, with small and midsize lenders tightening their credit rules for homebuyers. Large lenders, meanwhile, moved in the opposite direction and made it easier to obtain home loans.

Lenders most often cited “changing regulatory requirements” for the tightened credit rules, according to the survey by federal loan guarantor Fannie Mae.

“Lenders have been trying to find ways to manage their operational costs and meet new regulatory rules,” Doug Duncan, Fannie Mae’s chief economist, said in a statement accompanying the survey results. “They appear to feel cost-constrained and, thus, may be applying more conservative standards in their lending practices.”

No explanation was given for the opposite approach by large lenders, but Fannie Mae said the gap in mortgage requirements by large and small lenders is expected to further widen during the next three months and possibly longer.

Meanwhile, demand for mortgages rose during the second quarter of 2014, and Fannie Mae said that, too, will continue rising.

“These results are broadly in line with other major indicators released recently,” Duncan said, adding that they “support our expectations of a steady but unspectacular rebound for housing during the second half of this year.”

For homebuyers, the mixed mortgage outlook drives home the importance of planning ahead and securing financing before shopping for a home.

If you plan to buy a home in the Bay Area or the Tahoe/Truckee region, Pacific Union’s mortgage partner, Mortgage Services Professionals, can offer loan advice and consultation to help make your purchase a success.

(Image: Flickr/401(K) 2012)

Bay Area Job, Population Growth Will Continue to Fuel Housing Demand

Stephanie Witt - Tuesday, July 29, 2014
July 29, 2014 by Pacific Union

The Bay Area’s tech-industry-driven economy continues to add extremely desirable and high-paying jobs, attracting talented workers from around the nation and globe. But even though our region’s phenomenal economic growth likely will begin to slow over the next couple of years, intense demand for housing is almost certainly here to stay thanks to a pronounced lack of available homes.

“We’re getting closer to full employment,” says Stephen Levy, director and senior economist of Palo Alto-based Center for Continuing Study of the California Economy. “And what that means is that as we near full employment, that’s going to bring in people, which will add to the housing demand.”

May statistics from the California Employment Development Department show that each one of our Bay Area counties boasts an unemployment rate lower than the statewide average of 7.6 percent. Job growth remains particularly strong in Marin, Napa, San Francisco, and San Mateo counties, all of which have unemployment rates of less than 5 percent.

Levy believes that the Bay Area’s unemployment rate will never return to dot-com-era lows, when it hovered in the 2 to 3 percent range in San Francisco and Silicon Valley. However, he forecasts that even though job growth will level off over the next two years, the Bay Area will continue to outperform the rest of the country.

Population Growth Outpacing New Housing in Key Markets

Since the U.S. began to emerge from the Great Recession in 2010, the Bay Area’s population rate has jumped sizably, according to California Department of Finance data. Over the past four years, the number of residents in San Francisco and San Mateo counties has grown by nearly 4 percent while increasing by almost 5 percent in Santa Clara County.

But those counties have failed to build enough new housing units to keep up with the expanding populace. Since 2010, new housing has grown by just 2 percent in Santa Clara County, 1.3 percent in San Francisco, and 0.9 percent in San Mateo County.

“Peninsula prices and rents will continue to outpace the state and national average unless we see a dramatic increase in supply, and even then it would be snapped up pretty quickly,” Levy says.

Economic Climate Much More Stable Than in Dot-Com Days

As was the case in the dot-com boom and subsequent bust, the tech industry remains the primary driver of Bay Area employment growth. However, Levy believes that our current economy is far less frenetic than it was 15 years ago.

“I think it’s quite different,” he says. “These are real companies, and they have customers, profits, and burgeoning sales. The dot-com era was more about business plans.”

Still, technology companies aren’t the only businesses fueling Bay Area job growth. Other industries, including hospitality, health care, and construction, are seeing employment upticks, Levy says. However, he cautions that tremendous growth in the Internet sector could eventually slow expansion in other industries, including brick-and-mortar retail and financial services.

While the Bay Area’s economic outlook appears solid for the foreseeable future, the housing shortage may eventually impede growth, as workers could become wary of relocating to an area where finding a home is so difficult. Therefore, new construction remains a crucial factor in keeping our region’s economy moving upward and onward.

“I think [our economy] will always grow, but absolutely, housing poses a constraint to our growth over the long term,” Levy says. “The lack of housing could take some of the bloom off of the rose and limit some of the growth that might otherwise be there.”

(Photo: Flickr/Thomas Hawk)

Survey: Purchasing a Home ‘Overwhelming’

Stephanie Witt - Friday, July 25, 2014

July 25, 2014 by Pacific Union

A recent survey of prospective homebuyers found that most believe they are financially prepared for home ownership, yet many admit they aren’t sure what purchasing a property will actually cost them.

Illustration of a house made of hundred-dollar billsNearly 90 percent of buyers surveyed say they know what type of property they can afford, but only 52 percent have actually determined what their monthly mortgage payment would be, according to the poll byDiscover Home Loans.

Forty-one percent say they haven’t yet calculated their down payment, and nearly half — 48 percent — say they don’t know how much their mortgage payment would be if they chose a more or less expensive property.

Most homebuyers say they find the financing process “overwhelming,” including 76 percent of first-time buyers and, surprisingly, 54 percent of previous owners.

“The sheer amount of information can lead to confusion and stress,” Cameron Findlay, chief economist at Discover Home Loans, said  in a statement accompanying the survey results.

For help understanding the financial aspects of home ownership, buyers say they are more likely to turn to real estate professionals than other sources of information such as family, friends, and mortgage bankers.

Fully two-thirds of buyers said they consulted a real estate professional for help and information to assess whether purchasing a home will be a good investment, compared with 56 percent who said they spoke with family or friends and 39 percent who went to a mortgage banker.

For help evaluating mortgage terms and competing offers, 59 percent sought the advice of a mortgage banker, and 49 percent turned to a real estate professional.

(Image: Flickr/401(K) 2012)

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