As a Realtor I send virtually all loan questions directly to lenders I like... today that's more important than ever because the loan environment seems to be changing on an almost daily basis. Here's an update I received via email from a lender I trust to work hard on the behalf of Buyers:
From Raffi Soghomonian, BIX Equity Management, Inc.
"The mortgage landscape continues to change with new guidelines coming out weekly. The guidelines change so fast it is difficult to keep up with it all. We have to check each transaction to make sure the loan we are working on is still available. Having said that, there are still some great loan products including higher loan to value loans.
You probably already know about the FHA product which allows up to 97% financing. Make no mistake with this loan, it is a paper intensive process and can take 3 weeks to get an underwriting approval. So if by chance you have an FHA potential transaction, get the approval process started prior to the contract phase.
The new conforming-jumbo loans will now go up to 90% financing, and up to $729,000. Loans over 80% will require MI. The rates are actually very good for these loans. Only thing here is that these are Full Doc, Owner Occupied, and 1 unit properties. Both purchases and refinances are allowed.
There are conforming loans (<$417,000) with attractive rates, that go up to 90% financing with a first and second loan. The bigger challenge is in Jumbo loans. The secondary market for this paper is still conservative which makes it harder for wholesale lenders to sell that paper. 5/1 and 7/1 Jumbo Arms are right around the 6% range, but anything longer term can get a bit pricey."
This is from
Raffi Soghomonian
BIX Equity Management, Inc.
650-591-8830 raffi@bixx.com
www.bixmortgage.com
Getting pre-approved with a Lender is CRITICAL before you start a serious home search. It's taking longer to "underwrite" virtually all loans today, and you could lose out on the home of your dreams if you don't start the process early, and you don't have a Lender who will work diligently to push the process along. This is no time to rely on a "friend" who is new to the business. You need an expert.
Interest rates are PHENOMENAL right now.... and while "perfect" properties are selling immediately, less than perfect properties are sitting longer and you have a chance to negotiate a great deal. Great rates, great buying opportunities.... it's time to Buy!!!!!
5/15/08
5/6/08
Price Trend Comparisons
The biggest question on everyone's minds are how are prices trending.... my mantra is that you MUST ask this in a very specific way. Even a neighborhood comparison from year to year isn't specific enough. You need to pick a segment of a neighborhood because (2 bedroom condos vs. 2 bedroom condos for example).
But to get those answers, you need to ask me or another Realtor what you want to know... in the meantime, using a tool like Trulia's very general neighborhood tool is far better than reading something in the Chronicle, and certainly better than a national or regional news source.
Here's one example.... and look along the left hand column for a few more (be sure to mouse over the lines to see the prices by date):
But to get those answers, you need to ask me or another Realtor what you want to know... in the meantime, using a tool like Trulia's very general neighborhood tool is far better than reading something in the Chronicle, and certainly better than a national or regional news source.
Here's one example.... and look along the left hand column for a few more (be sure to mouse over the lines to see the prices by date):
| San Francisco Real Estate - Trulia |
3/29/08
Marina (District 7A) price appreciation
A question on Trulia about how San Francisco's Marina District has changed, or not, over the past few months. To that end I did a couple of searches and will include the results here:
2 Bedroom Condo Sales from Sept 1st '07 to Dec 31st '07:
7 sales, four with posted SqFt info, price range from $875,000 to $1.48 million. Average price $1.26 million, Median price $1.4 million (4 of the 7 sold btwn $1.4 and $1.48 million). Average price per SqFt (of just the 4 with listed SqFt info) was $875.97
Here's the link to the above report (click "yes" to allow it to open)
2008 Sales, as well as all 2 Bedroom Condos that are currently For Sale, and in contract:
Only 4 sales (only 3 months vs. 4 above), 2 in contract, and 5 listed for Sale. So about 1.5 are selling per month in both reports, so with 5 on the market now, the "supply" of homes should last a little over 3 months. That's a tad slow for San Francisco, but blazingly hot compared to the rest of the country.
The price range of the 4 sales was $1,070,000 to $1.55 million with the average at $1.286 million and the Median at $1.262 million. Here's the link to this report.
Unfortunately the above two reports don't paint a clear picture. You could argue that the market has gone down because there were so many $1.4 million sales in late 2007. But you could argue the market has gone up because there was a recent $1.55 million sale, and the average price is slightly higher than 2007's.
So what's a Buyer to do? First off, as a "feet on the street" Realtor who looks at properties in the Marina every week, I'll share my thoughts... and that is that "special" properties are selling very fast, and going for the upper most of their "fair market value". Properties that Buyers aren't clamoring over are sitting on the market until they are reduced in price. Several of these are clearly over priced, and I can tell almost the moment I walk in the door. But either the Seller won't listen to their agent, or on occasion the Realtor mis-judged the property's worth, and how Buyers would receive it. In the hot 2004 market, they too would have sold immediately and for crazy prices, but today, Buyers are being very picky.
So my answer is.... "special" properties are up modestly in price, and non-special properties are down modestly in price.
By the way... the above is a Condo only report, and only for 2 Bedroom Condos. I'll run a Single Family Home report shortly and post in below.
For a specific property's current "fair market value" visit www.Evaluate-My-Home.com and enter the address and your email to get a similar report to the above two, but specific to that property.
2 Bedroom Condo Sales from Sept 1st '07 to Dec 31st '07:
7 sales, four with posted SqFt info, price range from $875,000 to $1.48 million. Average price $1.26 million, Median price $1.4 million (4 of the 7 sold btwn $1.4 and $1.48 million). Average price per SqFt (of just the 4 with listed SqFt info) was $875.97
Here's the link to the above report (click "yes" to allow it to open)
2008 Sales, as well as all 2 Bedroom Condos that are currently For Sale, and in contract:
Only 4 sales (only 3 months vs. 4 above), 2 in contract, and 5 listed for Sale. So about 1.5 are selling per month in both reports, so with 5 on the market now, the "supply" of homes should last a little over 3 months. That's a tad slow for San Francisco, but blazingly hot compared to the rest of the country.
The price range of the 4 sales was $1,070,000 to $1.55 million with the average at $1.286 million and the Median at $1.262 million. Here's the link to this report.
Unfortunately the above two reports don't paint a clear picture. You could argue that the market has gone down because there were so many $1.4 million sales in late 2007. But you could argue the market has gone up because there was a recent $1.55 million sale, and the average price is slightly higher than 2007's.
So what's a Buyer to do? First off, as a "feet on the street" Realtor who looks at properties in the Marina every week, I'll share my thoughts... and that is that "special" properties are selling very fast, and going for the upper most of their "fair market value". Properties that Buyers aren't clamoring over are sitting on the market until they are reduced in price. Several of these are clearly over priced, and I can tell almost the moment I walk in the door. But either the Seller won't listen to their agent, or on occasion the Realtor mis-judged the property's worth, and how Buyers would receive it. In the hot 2004 market, they too would have sold immediately and for crazy prices, but today, Buyers are being very picky.
So my answer is.... "special" properties are up modestly in price, and non-special properties are down modestly in price.
By the way... the above is a Condo only report, and only for 2 Bedroom Condos. I'll run a Single Family Home report shortly and post in below.
For a specific property's current "fair market value" visit www.Evaluate-My-Home.com and enter the address and your email to get a similar report to the above two, but specific to that property.
Single Family Homes in the Marina
Here's the 2008 report.... all Single Family Homes on the market now, in contract now, or Sold since Jan 1st 2008.
Here's the report for Sept 1st thru Dec 31st 2007 Sales of Marina District Single Family Homes.
Price per SqFt is higher now $1,065 vs. $916. But the Average and the Median prices are both lower now vs. the latter part of 2007... Average was $3.3 million and is now$2.97 million. The Median was $3.07 million and is now $2.38 million.
But back to my "feet on the street" opinion... and that is that Buyers in this price range are snapping up the "special" properties in competitive bid situations. So if you're a bargain hunter, look for the properties that have some issues (small or no yard, odd layout, not the best block, poor condition, or even something that hasn't been painted and staged). Whereas, if you're interested in a property that everyone would want to live in, be prepared to compete.
For an analysis of a specific property visit www.Automated-HomeFinder.com
Here's the report for Sept 1st thru Dec 31st 2007 Sales of Marina District Single Family Homes.
Price per SqFt is higher now $1,065 vs. $916. But the Average and the Median prices are both lower now vs. the latter part of 2007... Average was $3.3 million and is now$2.97 million. The Median was $3.07 million and is now $2.38 million.
But back to my "feet on the street" opinion... and that is that Buyers in this price range are snapping up the "special" properties in competitive bid situations. So if you're a bargain hunter, look for the properties that have some issues (small or no yard, odd layout, not the best block, poor condition, or even something that hasn't been painted and staged). Whereas, if you're interested in a property that everyone would want to live in, be prepared to compete.
For an analysis of a specific property visit www.Automated-HomeFinder.com
1/23/08
SF December prices lowest in 2 years
According to my feet on the street feel for the market San Francisco hit "bottom" for a couple of brief months in early 2006. According to Dataquest this December matched those lows. To put it all in perspective I've included all of Dataquest's 2007 numbers:
Jan '07 - Median Price $750,000 - up 0.7% over Jan '06
Feb '07 - Median Price $757,500 - up 2.4% over Feb '06
Mar '07 - Median Price $753,000 - down 2.1% from Mar '06
Apr '07 - Median Price $790,000 - up 1.4% over Apr '06
May '07 - Median Price $835,000 - up 8.4% over May '06
June '07 - Median Price $825,000 - up 4.4% over June '06
July '07 - Median Price $799,000 - up 3.1% over July '06
Aug '07 - Median Price $822,000 - up 7.8% over Aug '06
Sept '07 - Median Price $773,500 - up 1.9% over Sept '06
Oct '07 - Median Price $795,000 - up 3.9% over Oct '06
Nov '07 - Median Price $760,000 - up 7.2% over Nov '06
Dec '07 - Median Price $731,000 - down 1.9% from Dec '06
You'll note the seasonality of the San Francisco market... low in January, picking up steam and peaking from April through October and sliding back down again.
So how "real" are these numbers? Are there other factors at play? Should YOU be worried if you're an owner, or slow down your plans if you're a Buyer?
Outside of San Francisco, probably yes, you should be worried, although I'd strongly suggest buyers speed up... don't try to time the bottom since so many markets are already so low and you can bargain hunt and pick up something even lower than the overall market. However, in San Francisco, especially in the more affluent areas of town, "my feet on the street feel" tells me our market is going back up.... and quickly.
My belief has always been that there's much more behind the numbers to begin with... so let's look at them. First, a monthly "closed" number is actually the PREVIOUS month's activity because most Escrows are 30 days in San Francisco, so if you went into contract on a home in November, you Closed in December. So the above December numbers are actually November activity. November is Thanksgiving, and I can tell you almost nothing happened for me personally. In fact, even those that actively looked in December passed up on the homes they liked. But they are still active.... AND I've got several more active Buyers... so demand is picking up in my little world.
There were also fewer overall homes sold... and it's a median number, so more lower priced homes sold. Does that mean people are buying fewer higher priced homes? Well, back to "feet on the street feel". I have a couple of higher end buyers, and they've been extremely disappointed in the "inventory". It seems more likely that Seller's are not selling their premium homes. Unfortunately the general media can scare people into not Buying AND not Selling. Those that have to sell right now are those who can't afford to hold on... and that's usually owners of lower priced homes who don't have large cash reserves. Owners of multi-million properties don't have to sell... so they wait. If I were advising a Seller right now I'd advise them to hold off listing their home until March or April. And guess what, that's what most agents do. So this April through October's numbers are likely to go up just like 2007's numbers.
So... should you be worried about the San Francisco market? Well, if you want to buy in the "affluent" neighborhoods, expect prices to continue to rise. If you're a Seller you are still in a Seller's market. If you're in a less affluent area on the outskirts of the city, I expect this to be another tough year. As the Chronicle said a couple of weeks ago, this is a "tale of two cities".
Jan '07 - Median Price $750,000 - up 0.7% over Jan '06
Feb '07 - Median Price $757,500 - up 2.4% over Feb '06
Mar '07 - Median Price $753,000 - down 2.1% from Mar '06
Apr '07 - Median Price $790,000 - up 1.4% over Apr '06
May '07 - Median Price $835,000 - up 8.4% over May '06
June '07 - Median Price $825,000 - up 4.4% over June '06
July '07 - Median Price $799,000 - up 3.1% over July '06
Aug '07 - Median Price $822,000 - up 7.8% over Aug '06
Sept '07 - Median Price $773,500 - up 1.9% over Sept '06
Oct '07 - Median Price $795,000 - up 3.9% over Oct '06
Nov '07 - Median Price $760,000 - up 7.2% over Nov '06
Dec '07 - Median Price $731,000 - down 1.9% from Dec '06
You'll note the seasonality of the San Francisco market... low in January, picking up steam and peaking from April through October and sliding back down again.
So how "real" are these numbers? Are there other factors at play? Should YOU be worried if you're an owner, or slow down your plans if you're a Buyer?
Outside of San Francisco, probably yes, you should be worried, although I'd strongly suggest buyers speed up... don't try to time the bottom since so many markets are already so low and you can bargain hunt and pick up something even lower than the overall market. However, in San Francisco, especially in the more affluent areas of town, "my feet on the street feel" tells me our market is going back up.... and quickly.
My belief has always been that there's much more behind the numbers to begin with... so let's look at them. First, a monthly "closed" number is actually the PREVIOUS month's activity because most Escrows are 30 days in San Francisco, so if you went into contract on a home in November, you Closed in December. So the above December numbers are actually November activity. November is Thanksgiving, and I can tell you almost nothing happened for me personally. In fact, even those that actively looked in December passed up on the homes they liked. But they are still active.... AND I've got several more active Buyers... so demand is picking up in my little world.
There were also fewer overall homes sold... and it's a median number, so more lower priced homes sold. Does that mean people are buying fewer higher priced homes? Well, back to "feet on the street feel". I have a couple of higher end buyers, and they've been extremely disappointed in the "inventory". It seems more likely that Seller's are not selling their premium homes. Unfortunately the general media can scare people into not Buying AND not Selling. Those that have to sell right now are those who can't afford to hold on... and that's usually owners of lower priced homes who don't have large cash reserves. Owners of multi-million properties don't have to sell... so they wait. If I were advising a Seller right now I'd advise them to hold off listing their home until March or April. And guess what, that's what most agents do. So this April through October's numbers are likely to go up just like 2007's numbers.
So... should you be worried about the San Francisco market? Well, if you want to buy in the "affluent" neighborhoods, expect prices to continue to rise. If you're a Seller you are still in a Seller's market. If you're in a less affluent area on the outskirts of the city, I expect this to be another tough year. As the Chronicle said a couple of weeks ago, this is a "tale of two cities".
1/18/08
CleanOffer San Francisco Trend Report
CleanOffer.com is the most complete MLS search service for consumers to search for homes for sale in San Francisco, and it allows you to save favorite listings and set up email alerts for specific searches. In addition they product Trend reports on the market.
The complete 2007 report is now available at this link. Interesting to see the trends for the past 7 years. The only segment of the market that was down significantly in '07 is the "Southwest" Condo market. Meanwhile, the "Northwest" market was up significantly.
If you'd like access to MLS searches on CleanOffer it's an invitation only service, but you can invite yourself at my specific link here.
The complete 2007 report is now available at this link. Interesting to see the trends for the past 7 years. The only segment of the market that was down significantly in '07 is the "Southwest" Condo market. Meanwhile, the "Northwest" market was up significantly.
If you'd like access to MLS searches on CleanOffer it's an invitation only service, but you can invite yourself at my specific link here.
1/17/08
Pacific Union's Avram Goldman on FOX Business News
My firm's CEO gets interviewed about the San Francisco and Bay Area real estate market. His opinion about the state of the market, and what to expect in the future.
1/15/08
The news media finally gets one right
Well, I generally rant against national media, but while local media generally don't know what they're talking about either when it comes to Real Estate, I finally read an article where the author actually did some research.
Carol Lloyd of the San Francisco Chronicle wrote an article two Sunday's ago which you can read here. She analyzed data from two sources to come to the conclusion I've been writing about for a while... that the "working class" neighborhoods in San Francisco are suffering, whereas the areas of "storied affluence" are up significantly in the last year.
She also sites Atherton, a gated community down south on the Bay Area's Peninsula, where the writer says people are "continuing to snatch up mansions like fresh cream puffs." If you can scroll to about minute 45 in this nearly 47 minute video you'll hear a Peninsula agent echo the same thing.
The bottom line reason cited in the article for the tale of "two cities" is that "people in Pacific Heights never had to lie for a loan". Although another agent rightly states that there are many highly paid technology professionals would rather live in urban areas with "walkable neighborhoods". In San Francisco there are a number of little communities that have fared quite well over the past year with central business district streets that locals love to live near. Examples include Fillmore Street in Lower Pac Heights, Polk Street in Russian Hill, 24th St in Noe Valley... and even Clement in the Richmond.
There are quite a few others... clean, safe blocks in affluent areas with coffee shops and restaurants, and the market is up in 2007, and from early "feel" it looks like they'll be up again in 2008.
Carol Lloyd of the San Francisco Chronicle wrote an article two Sunday's ago which you can read here. She analyzed data from two sources to come to the conclusion I've been writing about for a while... that the "working class" neighborhoods in San Francisco are suffering, whereas the areas of "storied affluence" are up significantly in the last year.
She also sites Atherton, a gated community down south on the Bay Area's Peninsula, where the writer says people are "continuing to snatch up mansions like fresh cream puffs." If you can scroll to about minute 45 in this nearly 47 minute video you'll hear a Peninsula agent echo the same thing.
The bottom line reason cited in the article for the tale of "two cities" is that "people in Pacific Heights never had to lie for a loan". Although another agent rightly states that there are many highly paid technology professionals would rather live in urban areas with "walkable neighborhoods". In San Francisco there are a number of little communities that have fared quite well over the past year with central business district streets that locals love to live near. Examples include Fillmore Street in Lower Pac Heights, Polk Street in Russian Hill, 24th St in Noe Valley... and even Clement in the Richmond.
There are quite a few others... clean, safe blocks in affluent areas with coffee shops and restaurants, and the market is up in 2007, and from early "feel" it looks like they'll be up again in 2008.
1/7/08
Noe Valley
In Summary - a family oriented neighborhood where Real Estate prices always seem to go up.
1/2/08
SF up again per Dataquest
DQNews.com came out with their November report and San Francisco (the entire city) is up 7.2% over November '06. Solano County got crushed, down 14.8% with sales off by 50%. That's just crazy. 15.7% fewer homes sold in San Francisco, but a 50% drop for Solano is off the charts. My personal belief (and I know I can back this up with numbers if I felt like spending a couple of hours crunching numbers) is that San Francisco is up because the "luxury" market (in quotes because $1+ million isn't necessarily luxury in this town.... even $2 million isn't always luxury here) is strong, and higher priced homes going up will lift the overall figures.
Of course another look at the San Francisco number reveals that at $814,750 as the median price for November, it's BELOW the top of the market which came in May ($835,000) and June ($825,000) (see my full 2007 chart here). But, all that means is a seasonal drop off. November everyone is focusing on Thanksgiving and other travel and holiday plans. It's also the start of San Francisco's rainy season. Whereas May sales are reflective of April activity (30 days to Close is typical in SF, so something that got an Offer on April 15th would not Close and record it's Sold price until May 15th), and April is when the SF market almost always takes off with Buyers coming out of the wood works.
Plus Seller's know this, so the best and priciest homes also come on the market. If a Seller comes to me and asks to Sell their home in November, I'll ask if they can wait it out until April. Often, the price differential can be worth it to them if there isn't another monetary reason to sell then.
Bottom line... San Francisco is still going up. National news... well... it's news, and only bad news sells, so don't expect to hear about the strong markets like San Francisco.
Of course another look at the San Francisco number reveals that at $814,750 as the median price for November, it's BELOW the top of the market which came in May ($835,000) and June ($825,000) (see my full 2007 chart here). But, all that means is a seasonal drop off. November everyone is focusing on Thanksgiving and other travel and holiday plans. It's also the start of San Francisco's rainy season. Whereas May sales are reflective of April activity (30 days to Close is typical in SF, so something that got an Offer on April 15th would not Close and record it's Sold price until May 15th), and April is when the SF market almost always takes off with Buyers coming out of the wood works.
Plus Seller's know this, so the best and priciest homes also come on the market. If a Seller comes to me and asks to Sell their home in November, I'll ask if they can wait it out until April. Often, the price differential can be worth it to them if there isn't another monetary reason to sell then.
Bottom line... San Francisco is still going up. National news... well... it's news, and only bad news sells, so don't expect to hear about the strong markets like San Francisco.
Donald Trump says it's time to buy
I came across a CNN hour long interview of Donald Trump... and besides finally discovering that, yes, it is his real hair... but a comb over... so yes, he's bald with foot long hair combed backwards... I agreed with virtually everything he said about the current market.
Firstly, he thinks we're near the bottom, and it's about 6 months before it's totally bottomed out.
Secondly, he thinks it's time to buy. Yes, some markets will still go lower, but there it doesn't take much effort to find amazing bargains in any market that's taken a hit.
Third, New York City has done nothing but go up. It's a unique market. And while he didn't say this about San Francisco... San Francisco didn't come up... the same applies. If you've read my posts, you know I think there's a market within the market here in SF. Actually, there are several... many even... markets within San Francisco. If you want to be in the nicer neighborhoods, with proximity to restaurants, parks, or the Bay... you're gonna pay.
The #1 Selling season is almost here... it can start as early as January... but it's always strongest from March through June. If you're a Buyer, you'll have a lot to choose from, but probably a lot of competition. If you're a Seller, the Buyers come out in droves this time of year. Be sure to paint, clean and Stage your home to set yourself apart. And call me to get your home marketed right!!!
Firstly, he thinks we're near the bottom, and it's about 6 months before it's totally bottomed out.
Secondly, he thinks it's time to buy. Yes, some markets will still go lower, but there it doesn't take much effort to find amazing bargains in any market that's taken a hit.
Third, New York City has done nothing but go up. It's a unique market. And while he didn't say this about San Francisco... San Francisco didn't come up... the same applies. If you've read my posts, you know I think there's a market within the market here in SF. Actually, there are several... many even... markets within San Francisco. If you want to be in the nicer neighborhoods, with proximity to restaurants, parks, or the Bay... you're gonna pay.
The #1 Selling season is almost here... it can start as early as January... but it's always strongest from March through June. If you're a Buyer, you'll have a lot to choose from, but probably a lot of competition. If you're a Seller, the Buyers come out in droves this time of year. Be sure to paint, clean and Stage your home to set yourself apart. And call me to get your home marketed right!!!
12/5/07
Good news for subprime borrowers
More and more news is popping up about progress towards a "freeze" on ARM's (adjustable rate mortgages) for subprime borrowers. Until the official announcement comes out it's hard to say if this will effect you. After all, interest-only 5/1 ARMs were the most popular loan for nearly every class of borrower in 2004 and 2005 when they represented a significant savings over fixed rate loans. Today the rates are virtually the same on interest-only vs. fixed-rate, so you only choose interest-only to avoid paying down principal. In '04 and '05 you chose interest-only because your interest rate was as much as a full point cheaper too.
But in all the articles, like this one, they say the "relief" is for sub-prime borrowers. I don't know if that means only those who were originally sub-prime, or if it includes people who would now be sub prime due to a drop in their credit score, or a loss of a job or decrease in annual income? Since most '04 and '05 borrowers took on loans that are due to re-set in the next 1 to 3 years... there are going to be a lot of people wondering if they can keep their same low interest rate. Or, will the most well to do be forced to pay more, so that those with poor credit can pay less?
But in all the articles, like this one, they say the "relief" is for sub-prime borrowers. I don't know if that means only those who were originally sub-prime, or if it includes people who would now be sub prime due to a drop in their credit score, or a loss of a job or decrease in annual income? Since most '04 and '05 borrowers took on loans that are due to re-set in the next 1 to 3 years... there are going to be a lot of people wondering if they can keep their same low interest rate. Or, will the most well to do be forced to pay more, so that those with poor credit can pay less?
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