March 24, 2016

People Are Nervous That Prices May Come Back To Earth

The Orange County Register reports from California. “Orange County home prices continued to rise through February but at a slower pace than in recent years, new housing figures show. CoreLogic reported that last month’s median home price – or price at the midpoint of all sales – was $610,000, down $8,500 from January, but up by $20,000 from the previous February. That’s a year-over-year gain of 3.4 percent, the second-lowest price appreciation rate in almost a year. It’s also just the ninth time in the past 29 years the median home price dipped from January levels. Los Angeles housing economist G.U. Krueger and some local real estate agents also noted many buyers struggle with affordability.”

“Realty One broker-agent Sherry Bahrami said buyers are balking at high asking prices, and sellers are giving in. ‘Sellers … softened their response and negotiated an under-asking (price) contract,’ she said.”

The Desert Sun. “Home prices sank to their lowest levels of the winter season in February, hitting a median of $283,000, according to CoreLogic DataQuick. Resale home prices fell by 10.3 percent from February 2015, down to a median of $287,500, CoreLogic DataQuick’s records show. New homes sold for a median price of just $327,000, down 5.6 percent year-over-year and by far their lowest level of the winter homebuying season.”

“‘It helps to know that over 50 percent of homes in the Coachella Valley are owned by non-resident owners and more than 70 percent of money generated in real estate transactions comes from those buyers,’ said California Desert Association of Realtors president Judy Horn. ‘America’s current economic uncertainty, coupled with the decline of Canada’s currency as measured against the American dollar, has a negative impact on our second home market and out of area investment in Coachella Valley’s real estate market.’”

The Lake County News. “Home sale prices in February edged down, but the number of sales was up, according to the Lake County Association of Realtors. LCAOR reported that the February median sales price of single family residences in Lake County pulled back by 18.24 percent when compared to the January 2016 median sales price. Distressed property sales jumped to 18.5 percent of the sales after falling to 8 percent in January. A number of different types of sales make up distressed properties including auction sales, real estate owned (foreclosed properties) and short sales, LCAOR said.”

“‘Even though the month to month median price went down the real estate market has been very active especially for this time of year,’ said 2016 LCAOR President Erin Woodward. ‘As inventories tighten and prices increase in surrounding counties more buyers will consider opportunities in Lake County.’”

The Marin Independent Journal. “The median price of a Marin home fell 4 percent in February, to $925,000 compared with the previous February, and sales dropped 3 percent. The median price of a condominium also dropped, going from $505,000 in February 2015 to $448,800 in February 2016, according to CoreLogic. There has been a lot of talk lately about ‘unicorns,’ new technology companies, many of them social media, with valuations of a billion dollars or more. While there has been a lot of funding of such ventures, the view today is that there may be too many of them and valuations might be affected, Dreyer said. ‘Some experts are cautioning that we’re at the end of a hot cycle,’ Dreyer said.”

“As goes Silicon Valley, so goes the Bay Area, so the economy and the real estate market might see an effect if the cycle ends. David Swaim, owner of Tam Realty in San Anselmo, said, ‘It’s still a strong seller’s market, it’s just starting to show signs of coming back to earth. People are nervous that prices may come back to earth later this year.’”

The Mercury News. “Silicon Valley luxury home sales rose sharply in February from the month before, though they dropped 11 percent from the level set a year earlier, according to Coldwell Banker. The median sale price of a luxury property in February was $2,550,000 in Santa Clara County, up 6.5 percent from the January median of $2,395,000 — though down 4.2 percent from the median of $2,662,500 in February 2015.”

“Arthur Sharif, an agent with Sotheby’s International in Menlo Park, called this year’s market ‘topsy turvy,’ with buyers’ confidence swinging this way and that, at least partly because of recent stock market fluctuations. ‘The underlying theme, I think, is that the go-go days of 2014 and 2015 are behind us,’ he said. ‘I think we’re going to see a little bit of sober reality.’”

“He said that homes priced between $2.5 million and $5 million ‘are staying on the market for a little bit longer time. And we’re seeing fewer multiple offers and the prices are down a little from where they’d been. And that’s true in Los Gatos and Saratoga and even in the holy grail of the market, Palo Alto. After what we’ve experienced for the last two years, it’s been a little bit of an eye opener.’”

From KCBS All News. “Real estate firm Trulia finds that starter home inventory is down overall by more than 40 percent since 2012, and in the Bay Area, investors are holding onto a large percentage of those homes. In the Bay Area, the median price of the homes that normally attract first-time buyers is higher than anywhere in the nation.”

“‘The shocking number that came out of the report was actually the share of income the starter home buyer, even if they can put 20 percent down on a home, would have to spend to service the mortgage, is like 110 percent of their income. That’s unbelievable. That’s uncharacteristic of the rest of the country, but that really is a sign that home-seekers are starting to look down the housing ladder,’ Ralph McLaughlin, Chief Economist for Trulia told KCBS.”

Bits Bucket for March 24, 2016

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