October 15, 2014

A Special, Special Part Of The World

The Marin Independent Journal reports from California. “The median price of a single-family home in Marin soared to $1.1 million in September while sales dropped 13 percent from a year ago, according to CoreLogic DataQuick. Sales were down in most Bay Area counties, dropping 6 percent in the area overall and 7 percent in San Francisco. Sales have been declining in Marin and the Bay Area for many months. Regardless of the differences within the county, Fred Kusin of Bradley Real Estate said, ‘Marin is unique. We live in a special, special part of the world.’”

The Telegraph. “According to figures released this week by Forbes magazine, the quiet suburb of Atherton, in Silicon Valley, is now the most expensive postcode in the United States. Estate agents say many of their Chinese buyers looking for homes here are happy to buy sight-unseen and almost all pay upfront in cash - some 80 percent of the $10million homes they sell. ‘I think we have several more years of growth left,’ said Mr DeLeon. ‘It’s a real property boom and not just a bubble.’”

“‘It’s the curse of Silicon Valley,’ added one long-time resident. ‘I just pray that before long, they’ll move on to the next shiny penny.’”

The Press Democrat. “After lagging for most of the year, Sonoma County home sales jumped last month to the highest level for September in nine years. Prices may continue to rise over the next six months, said Jeff Schween, an agent with Pacific Union International in Santa Rosa, because those sellers coming to market now may do so with the thought that ‘this is the kind of price I want to get.’”

“Lori Sacco, manager of Vanguard Properties office in Sebastopol, said some buyers of upper-end properties may be willing to pay extra to get that home they really want. But she cautioned that recent sellers of more modest homes have failed to sell promptly because they sought more than buyers were willing to pay. Her advice: ‘Price it right or it’s going to sit around.’”

The Orange County Register. “A fall chill crept into the Orange County housing market in September, freezing the median home price below the $600,000 threshold touched briefly earlier this year and keeping a lid on sales. The median price of an Orange County home was $585,000 last month, CoreLogic DataQuick reported. Last month was the first time in more than two years that none of the Southern California’s six counties posted double-digit year-over-year price gains. ‘Price appreciation has dipped into single-digit territory as more would-be buyers get priced out, investors back off and incomes rise modestly at best,’ DataQuick Analyst Andrew LePage said.”

The Los Angeles Daily News. “CoreLogic DataQuick analyst Andrew LePage said that September’s small sales increase by no means signals a market turnaround. ‘We still have some summer activity closings, so I wouldn’t read a whole lot into September,’ LePage said. ‘We’ll see what happens over the next couple of months.’”

“Last month the median price across the six-county region increased from $382,000 to $413,000. It fell 2 percent from $420,000 in August, which was the highest median price since $425,000 in December 2007. Economist William W. Roberts, director of the San Fernando Valley Economic Research Center at Cal State Northridge, said that prices have been flattening out since the spring, and he expects that trend to continue for the rest of the year. Sales had lagged last year’s lackluster total until September, in part because inventory remains tight. ‘It’s going to be another crappy year,’ he said of the region’s market.”

The Glendale News Press. “For the first time in over three years, the median prices for single-family homes and condominiums declined last month in Glendale compared to September 2013. The median price for homes slid from $825,000 in September of last year to $740,000 last month, according to statistics compiled by Realtor Keith Sorem with Keller Williams Realty in Glendale. At the same time, the number of homes sold declined almost 18%.”

“‘Prices are stabilized,’ said Margi Simpkins, a Realtor with Coldwell Banker in Glendale. ‘There’s no real sense of urgency on the part of the buyer.’”

The Bakersfield Californian. “In theory, people should be approaching retirement debt free. But life is a long way from theory. A new study by the non-profit Employee Benefit Research Institute reported that an increasing number of boomers are retiring with mortgage debt. The EBRI report found housing-related expenses are the largest category of costs for seniors, consuming 40 to 45 percent of an older homeowner’s budget. By comparison, health costs consume 8 percent of the budget for people 50 to 64 years of age and 19 percent for seniors 85 years of age and older.”

“The Consumer Financial Protection Bureau recently painted an even bleaker picture. The federal agency reported that sixty-five percent of retirement-age people have mortgages today. This is up from 52 percent in 1992. And while many are struggling to make their mortgage payments, the bureau estimates about 5 percent of seniors are seriously delinquent on their debts.”

“My clients Bob and Mary illustrate some of the reasons why many retiring boomers are not debt free. In early 2000, when Bob was receiving promotions and pay raises at work, the couple decided to trade in their modest three-bedroom home for a larger one in northwest Bakersfield. Their children were in high school and the family needed room to stretch out. They seemed to buy just at the right time. Shortly after they moved in, home prices spiked in their neighborhood. They refinanced three times, taking equity out to help pay for their children’s college educations and to pay for one daughter’s wedding. Their monthly mortgage payment climbed to about $3,000.”

“Then the housing bubble burst and the Great Recession of 2009 hit. While Bob did not lose his job, as many of his neighbors did, his wages have not increased significantly in recent years. And Mary, who has worked part time for years to be home with her children, has been unable to find a full-time job.”

“I advised them to consider all their current and future expenses and income. Downsize. The ‘empty nesters’ have put their home on the market, with plans to buy a smaller home, or rent. They are hoping to reduce their mortgage payments and shed related homeowners’ costs. They also will cut spending on entertainment, travel and ‘non-essentials,’ while increasing their funding of retirement investments.”

“It took years of decisions and spending for Bob and Mary to get into their financial situation. There is no easy, one-step solution to getting out. It will take time and discipline to secure their retirement.”

Bits Bucket for October 15, 2014

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