Frantic Bidding Has Quieted Down Significantly
The Los Angeles Times reports from California. “Buyers signed fewer contracts for homes in California last month. Pending home sales fell 5% in August from July, the California Assn. of Realtors said Monday. The group’s pending-sales index dropped 9% from last year. The index represents contracts signed but not yet closed — a sign of future market activity. ‘Rising interest rates over the past several months at the specter of a tapering of the Fed’s stimulus program sent buyers to the sidelines in August,’ the association’s chief economist, Leslie Appleton-Young, said in a statement.”
The North Bay Business Journal. “The North Bay has seen housing prices improve markedly over the past year. The San Francisco Bay Area as a whole has seen median home prices rise 31.7 percent in the 12-month period between August 2013 and 2012, according to DataQuick. In places like Marin County, values in some central areas have nearly risen to levels seen before the recession, said Blaine Morris, president-elect of the Marin County Association of Realtors. ‘Everybody who bought a house in 2010, 2011 feels pretty smart right now,’ he said.”
“It is a trend that, along with an uptick in interest rates, has given pause to some prospective homeowners and caused a period of frantic bidding to quiet down significantly, said Bill Facendini, president of Terra Firma Global Partners. ‘I think the consumer is taking a step back,’ he said. ‘Everyone is still wanting to make a good business decision, even if it’s their home.’”
The Merced Sun Star. “Merced County’s roughly 37 percent bump in housing prices in the last year is a sign of an improving housing market, according to some experts. Los Banos has seen a bump of about 35 percent in the past year, DataQuick said. Delhi’s roughly 43 percent increase in home prices during the last year is the county’s highest. Terry Ruscoe, owner of Merced Yosemite Realty in Merced, said a ‘vast majority’ of his clients come from the Bay Area and Los Angeles. A big draw for those investors, he said, is their children attending UC Merced.”
“Ruscoe said investors don’t see those levels dipping again. ‘Parents come in and they want to invest in the area, because the prices are so low compared to Los Angeles, Bay Area, San Jose,’ he said.”
“Los Banos’ proximity to the Bay Area and connection to Highway 152 has made it a bedroom community for a few decades. So, the low home prices have attracted buyers, according to Larry Borelli, owner of Borelli Realty Services in Los Banos. ‘They know that right now it’s pretty much at the bottom, so they just buy, buy, buy,’ he said.”
The Sacramento Bee. “Bay Area investors and long-distance commuters are hitting the road again and bidding up home prices in the Northern San Joaquin Valley. Stockton has seen its median home price rise by 30 percent in the past year, according to DataQuick. Tracy, a burgeoning bedroom community for Bay Area “super commuters” in the boom, experienced a nearly 40 percent gain in the median home price from August 2012 to August 2013. And Lathrop saw its median home price soar by nearly 50 percent.”
“‘Especially Tracy, Lathrop and Manteca have really felt the Bay Area influence coming out,’ said Aaron West, an agent with PMZ Real Estate in Modesto. At first, the buyers were professional investors scooping up cut-priced homes 10 at a time, he said. Then came some Bay Area residents who wanted to buy one or two rental homes. Now, with prices rising fast in the Bay Area, homeowners are once again driving across the Diablo Range to seek out homes they can afford, he said.”
The Union Tribune. “After Milly and Arnold Lee tied the knot in 2008, they settled into a two-bedroom, two-bath apartment in University City where the rent was $1,450 per month. After annual increases, the landlord now charges the couple $1,800. Arnold Lee, 34, a mail carrier, and Milly Lee, 33, a hospital administrative coordinator, said they are looking to spend $400,000 to $475,000 for a three-bedroom, two-bath home possibly in Escondido, San Diego or Mira Mesa.”
“Experts think it’s also a good time to buy because housing prices will only continue to go up, thanks to the rent increases, shortage of supply and growth of well-paying jobs. ‘Our rent has gone up every year,’ Arnold Lee said. ‘We need to capitalize on low interest rates. We need to make an investment. One of my dreams is to own a home.’”
The Santa Cruz Sentinel. “Jamie and Kyle Lawler have given up on Santa Cruz. The couple, married a year ago, tried to buy a home in Santa Cruz, but after making 16 offers and striking out each time, Jamie decided she’d had enough disappointment. She left her job with an email marketing company in Sunnyvale and took a job in San Luis Obispo. As of August, the couple was in Shell Beach in North Pismo. ‘We know that a lot of the houses being sold were strictly to be remodeled and either sold again, or rented out to the UC Santa Cruz student population,’ she said.”
“The couple is among the first-home home buyers who got caught when the median sales price shot up from $449,000 in February to $585,000 in March, turning the buyers market into a sellers market. The median price has been at or more than $600,000 ever since. Lawler said the 16th offer was ‘the one where I thought we had it for sure. We overbid, wrote out the appraisal contingency, if the house appraised for less that what we offered, we would pay the remaining in cash,’ she said.”
“A friend of hers who knew the sellers put in a good word. None of it made a difference, so she asked herself: Why stay in Santa Cruz? ‘I love the area, the people, and the vibe,’ Jamie said. ‘But did I love my three-hour round trip commute and knowing that it would take my whole paycheck to go toward mine and my husband’s mortgage?’”
