December 31, 2013

As Summer Began, The Carousel Stopped

The Union Tribune reports from California. “Q: What do you think the San Diego County median home price, now standing at $415,000 (via DataQuick), will be at the end of 2014? Linda Lee, president of the Greater San Diego Association of Realtors: ‘While it’s difficult for any expert to predict market prices, I believe the median price will be higher at the end of 2014 than it currently is now. I estimate the median home price in San Diego County will be approximately 21 percent higher at the end of 2014.’”

From ABC News 10. “Homebuyers Jeffrey and Amy’s dream home includes a spacious kitchen and bright rooms – something a Rancho Penasquitos home has but again, it comes down to the price. A 4-bedroom home in that area is going for $649,000, a drop in price since it was listed in September. ‘Prices have stabilized and because of that, it will be less competitive,’ said Angela Ordway, who is with the Greater San Diego Association of Realtors. ‘We won’t see a lot of multiple offers, so there will be good chances that the first-time home buyers can get those key properties.’”

“‘As newlyweds, we were saving for a down payment and no matter how much we save, we can’t keep up with investors,’ said Amy. ‘The prices are definitely intimidating,’ said Jeffrey. ‘I’m thinking about a few years later down, is it going to drop in price if we’re putting down that much money?’”

The Sacramento Bee. “The housing market roared back to life – for a while, anyway. During the first half of 2013, the market pulled out of its five-year tailspin faster than anyone predicted. At midyear, prices were up nearly 30 percent compared with 2012 – and about 50 percent from the trough two years ago. And then, as summer began, the carousel stopped. Higher prices shooed away many of the investors. Almost out of nowhere, the inventory of homes for sale doubled. Experts called it a breather, not the end of the comeback. Pat Shea, president of Lyon Real Estate in Sacramento, predicted a ‘more stable appreciation’ in prices in 2014 – something in the 5 percent to 10 percent range.”

The Desert Sun. “In November, there were 745 homes and condos sold across the desert, a 7.7 percent drop from the year before, according to DataQuick. Existing single-family home sales fell 18.8 percent from November 2012. Declining sales were due to a short supply of homes across the desert, agents said. But new construction homes have bumped up some inventory, and agents expect more homeowners will put their houses on the market after the holidays. John Burge, president of the Palm Springs Regional Association of Realtors, expects the high end of the market to pick up in January.”

“‘The homes priced a million-plus have taken a price dip,’ said Burge. ‘We’ll see that disappear in the middle of January. More of our buyers will be back on the market looking.’”

“During the summer, the desert hovered around three months of inventory. In November, the inventory increased to about five and a half months, according to the California Desert Association of Realtors. Jon Caruana, an HK Lane agent based in La Quinta, said he had 15 listings at his lowest point. Now, he has about 40 listings, he said. Caruana said investors who snapped up short sales mainly cared about price. Now, with more equity sales, buyers are looking for the bigger package: upgrades, location and appearance. ‘We’re getting back to a market where your house really has to look good,’ Caruana said.”

The Santa Cruz Sentinel. “The recovery has yet to reach the high end. For homes selling for more than $1 million, the median price rose less than 1 percent. ‘Only two sales have been above $3 million this year,’ said longtime agent Tom Breszny. ‘We had more sales over $2.5 million and $3 million in 2008 (the crash year) than what we had this year.’”

From CBS Local. “With soaring real estate prices, and little supply of homes to occupy, East Palo Alto may allow homeowners to let people live in their garages and storage buildings. ‘The housing crunch does not get any easier, it doesn’t get any less expensive. And we don’t want to end up with people going homeless,’ East Palo Alto Councilmember Ruben Abrica told KPIX 5.”

The San Francisco Chronicle. “Art Concordia, a teacher with the district since 1998 and at Balboa High School since 2002, recently moved to his in-laws’ house in Pleasant Hill. His wife is pregnant with twins, and they also have a 13-month-old and an 11-year-old son from a previous marriage who lives with them half-time. He said it would break his heart to leave Balboa, but many nights, he and his son don’t get home until after 8 p.m.”

“‘When I have my son with me, that’s just brutal. By the time I get home, the 1-year-old is usually asleep,’ he said. ‘I get paid well - there’s no way I am saying I don’t make good money. It’s just the cost of living is so high.’”

The Los Altos Town Crier. “The California Association of Realtors recently reported that housing affordability in the third quarter of 2013 fell for the sixth consecutive quarter. California housing affordability hit a record high of 56 percent in the first quarter of 2012. The third-quarter 2013 figure fell below 35 percent for the first time since the third quarter of 2008.”

“Homebuyers needed to earn a minimum annual income of $89,170 to qualify for the purchase of a $433,940 statewide median-priced existing single-family home in the third quarter of 2013. The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $2,230, assuming a 20 percent down payment and an effective composite interest rate of 4.36 percent.”

“The composite interest rate was 3.72 percent in the third quarter of 2012. The median home price was $339,930 in the third quarter of 2012, and an annual income of $65,828 was needed to purchase a home at that price. The California Association of Realtors reported that nearly every county experienced a double-digit decline in affordability when compared to last year.”

“In Santa Clara County, only 21 percent of homebuyers could afford to purchase a median-priced single-family home in the third quarter of 2013, down from 32 percent in the third quarter of 2012. Buyers needed to earn a minimum annual income of $165,420 to qualify for the purchase of an $805,000 median-priced single-family home. The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $4,140.”

Bits Bucket for December 31, 2013

Post off-topic ideas, links, and Craigslist finds here.