Bay Area Real Estate Market
- Thread starter waggie945
- Start date
FRESNO - I grew up in Madera just north of Fresno and my father lives their now..OMG, crime is rampant, (my father has had his Supra's seats stolen TWICE from his driveway), it's 110 degree's on average in the summer and the traffic on Blackstone (main artery through town) and through town is amazing now......BUT housing is very affordable..for my house in Santa Cruz (1,400sq ft 2 bdrm 2 bath) I could live very large in Fresburg. I would suggest you visit it in the summer (hot) and winter (extremely foggy usually)...good luck!
rttrader1 -
Let's be clear, I would never, never, never live in Fresno
All I said was that I would buy a house (i.e. a rent house) and rent it out to other people that lived there. For the price of one house in the Bay area I could buy two or three houses in other places (like Fresno) and rent them out. In time (about 5-8 years) I could easily make the mortgage payments on the other houses as well as pay rent in the Bay Area with the rental income.
The location of Fresno is not important (it could just as well be Redding, Reno, Eureka or wherever), I just chose a place where the price of houses and the rental rates (the P/E ratio) are in some measure of conformity as opposed to the Bay area where there is no relationship what so ever.
All I said was that I would buy a house (i.e. a rent house) and rent it out to other people that lived there. For the price of one house in the Bay area I could buy two or three houses in other places (like Fresno) and rent them out. In time (about 5-8 years) I could easily make the mortgage payments on the other houses as well as pay rent in the Bay Area with the rental income.
The location of Fresno is not important (it could just as well be Redding, Reno, Eureka or wherever), I just chose a place where the price of houses and the rental rates (the P/E ratio) are in some measure of conformity as opposed to the Bay area where there is no relationship what so ever.
Some idea's for a location that also has good access to the bay Area might be Modesto/Turlock area (although that is not showing pricing increasing for the last decade JUST because of this), Merced is still cheap and the gateway to Yosemite and the mountains.......your idea of rental units is exactly what I did, I now have a 4-plex in Madera that I went in net positive and have hired a mngt company to run and I net passive income every month to compliment my salary here at my firm....it works for me
rttrader1 -
Bay Area home prices surged to record highs in February, as hordes of buyers rushed to capitalize on tumbling mortgage rates, a research firm reported.
The median price for a single-family home in the nine-county Bay Area climbed to $476,000 in February, up about 14 percent from the same month last year, according to DataQuick, a La Jolla real estate information company. That was the biggest year-over-year jump in three years.
"It's a frenzy out there," said Peter Richmond, a Mill Valley real estate agent who said some choice homes are receiving as many as 20 offers. "It's a function of small inventory, tons of buyers wanting to buy, and record low interest rates. We're almost, but not quite, where we were in 2000."
Along with the relative small number of houses on the market, experts mainly credit the continued presence of low interest rates -- which let buyers purchase pricier homes while keeping their monthly payments more affordable -- with fueling the price increases. And with rates hitting nine- month lows this week, that momentum shows no imminent signs of easing.
All over the Bay Area, properties are garnering multiple offers for thousands of dollars over the asking price, drawing comparisons to the white- hot real estate market of the dot-com days. And that is happening despite a lackluster employment sector, which lost about 300,000 jobs from 2001 to 2003.
Still, the Bay Area's appreciation rates pale in comparison with those in Southern California. In Riverside County, for instance, the median price for a single-family home soared 33.5 percent to $275,000 in February. DataQuick researcher John Karevoll forecasts that Riverside appreciation will drop below 20 percent by the summer, in part because prices can't sustain such huge increases for long. He predicts Bay Area home prices will remain on their current track, with about 15 percent year-over-year increases.
"The Bay Area is on an even keel -- those gains are pretty sustainable, " Karevoll said.
However, he noted that growing concerns about the federal deficit may push interest rates up this fall, potentially dampening home prices.
"That's when we start getting into maybes," he added.
In February, median prices for detached homes in six counties reached or tied their highest levels going back to 1988, when DataQuick began tracking the market. In Contra Costa, Napa and Sonoma counties, prices fell short of their all-time highs, though in most cases not by much.
The highest median price, $725,000, was in Marin County, where several communities regularly rank among the most expensive in the nation. At $320,000, Solano County had the lowest median. Napa County had the highest appreciation rate at nearly 25 percent. The median is the midpoint; half of sales were above and half were below.
The number of homes sold also hovered near record territory last month. A total of 7,412 homes and condos were sold in the Bay Area, up 10.6 percent over last February and the second-biggest count for that month on record in 16 years.
Santa Clara County logged the largest number of sales last month, with 1, 865 homes changing hands, up 28.6 percent over last year -- the highest annual gain. Sales fell nearly 8 percent in Solano County to 575.
DataQuick's reports, based on filings with county recorders' offices, reflect sales initiated roughly 30 to 60 days earlier.
While sellers are no doubt pleased with the continued strength of home prices, however, buyers are becoming increasingly frustrated as they vie against many others for too-few properties.
San Jose real estate agent Colleen Badagliacco said that with inventory levels far lower than they were one year ago, most buyers must be prepared to put in five or six bids on different properties.
"Right around that median price, which is $520,000 to $560,000 in Santa Clara County, competition is fierce," said Badagliacco, who is also treasurer of the California Association of Realtors.
Other home shoppers are discouraged by the quality of available properties.
Software salesman Michael Hamilton has been looking for a one- or two- bedroom condo in San Francisco since October.
"I'm just shocked at what people are selling for $400,000 -- slanted buildings with no maintenance," Hamilton said. "And they don't even have parking. I'm 43 years old and I commute to Mountain View -- I'm not going to drive around for an hour looking for parking."
In addition to the region's chronically tight supply of new housing, another factor boosting Bay Area prices is consumers' enhanced buying power.
The average rate on a 30-year, fixed-rate conforming mortgage, which refers to loans under $333,700, dropped from 5.41 percent last week to 5.38 percent this week, home loan titan Freddie Mac reported Thursday in its weekly national mortgage rate survey. Most Bay Area home buyers require jumbo loans, whose rates are slightly higher. This week's rate marked the lowest level for 30-year mortgages since late last June, when rates averaged 5.24 percent. In mid-June, rates hit a 40-year low of 5.21 percent, rekindling a historic refinancing boom and buoying home prices despite a stagnant economy.
But some industry insiders worry that consumers are selecting riskier loan products, putting themselves in a vulnerable position when interest rate inevitably rise. Kevin Clay, a mortgage broker at Reign Financial in San Carlos, said an increasing number of his clients are opting for so-called interest-only loans. Because the initial monthly payments are typically lower than those for traditional amortizing loans, interest-only loans usually allow buyers to qualify for a bigger loan.
However, if home prices fall -- as some economists predict will happen if interest rates rise substantially -- those homeowners could end up owing more than their home is worth.
"When markets turn down, prices can drop as much as 10 percent in the first 30 days," Clay said. "In that case, some people might find themselves in a tough situation."
--------------------------------------------------------------------------------
E-mail Kelly Zito at kzito@sfchronicle.com.
The median price for a single-family home in the nine-county Bay Area climbed to $476,000 in February, up about 14 percent from the same month last year, according to DataQuick, a La Jolla real estate information company. That was the biggest year-over-year jump in three years.
"It's a frenzy out there," said Peter Richmond, a Mill Valley real estate agent who said some choice homes are receiving as many as 20 offers. "It's a function of small inventory, tons of buyers wanting to buy, and record low interest rates. We're almost, but not quite, where we were in 2000."
Along with the relative small number of houses on the market, experts mainly credit the continued presence of low interest rates -- which let buyers purchase pricier homes while keeping their monthly payments more affordable -- with fueling the price increases. And with rates hitting nine- month lows this week, that momentum shows no imminent signs of easing.
All over the Bay Area, properties are garnering multiple offers for thousands of dollars over the asking price, drawing comparisons to the white- hot real estate market of the dot-com days. And that is happening despite a lackluster employment sector, which lost about 300,000 jobs from 2001 to 2003.
Still, the Bay Area's appreciation rates pale in comparison with those in Southern California. In Riverside County, for instance, the median price for a single-family home soared 33.5 percent to $275,000 in February. DataQuick researcher John Karevoll forecasts that Riverside appreciation will drop below 20 percent by the summer, in part because prices can't sustain such huge increases for long. He predicts Bay Area home prices will remain on their current track, with about 15 percent year-over-year increases.
"The Bay Area is on an even keel -- those gains are pretty sustainable, " Karevoll said.
However, he noted that growing concerns about the federal deficit may push interest rates up this fall, potentially dampening home prices.
"That's when we start getting into maybes," he added.
In February, median prices for detached homes in six counties reached or tied their highest levels going back to 1988, when DataQuick began tracking the market. In Contra Costa, Napa and Sonoma counties, prices fell short of their all-time highs, though in most cases not by much.
The highest median price, $725,000, was in Marin County, where several communities regularly rank among the most expensive in the nation. At $320,000, Solano County had the lowest median. Napa County had the highest appreciation rate at nearly 25 percent. The median is the midpoint; half of sales were above and half were below.
The number of homes sold also hovered near record territory last month. A total of 7,412 homes and condos were sold in the Bay Area, up 10.6 percent over last February and the second-biggest count for that month on record in 16 years.
Santa Clara County logged the largest number of sales last month, with 1, 865 homes changing hands, up 28.6 percent over last year -- the highest annual gain. Sales fell nearly 8 percent in Solano County to 575.
DataQuick's reports, based on filings with county recorders' offices, reflect sales initiated roughly 30 to 60 days earlier.
While sellers are no doubt pleased with the continued strength of home prices, however, buyers are becoming increasingly frustrated as they vie against many others for too-few properties.
San Jose real estate agent Colleen Badagliacco said that with inventory levels far lower than they were one year ago, most buyers must be prepared to put in five or six bids on different properties.
"Right around that median price, which is $520,000 to $560,000 in Santa Clara County, competition is fierce," said Badagliacco, who is also treasurer of the California Association of Realtors.
Other home shoppers are discouraged by the quality of available properties.
Software salesman Michael Hamilton has been looking for a one- or two- bedroom condo in San Francisco since October.
"I'm just shocked at what people are selling for $400,000 -- slanted buildings with no maintenance," Hamilton said. "And they don't even have parking. I'm 43 years old and I commute to Mountain View -- I'm not going to drive around for an hour looking for parking."
In addition to the region's chronically tight supply of new housing, another factor boosting Bay Area prices is consumers' enhanced buying power.
The average rate on a 30-year, fixed-rate conforming mortgage, which refers to loans under $333,700, dropped from 5.41 percent last week to 5.38 percent this week, home loan titan Freddie Mac reported Thursday in its weekly national mortgage rate survey. Most Bay Area home buyers require jumbo loans, whose rates are slightly higher. This week's rate marked the lowest level for 30-year mortgages since late last June, when rates averaged 5.24 percent. In mid-June, rates hit a 40-year low of 5.21 percent, rekindling a historic refinancing boom and buoying home prices despite a stagnant economy.
But some industry insiders worry that consumers are selecting riskier loan products, putting themselves in a vulnerable position when interest rate inevitably rise. Kevin Clay, a mortgage broker at Reign Financial in San Carlos, said an increasing number of his clients are opting for so-called interest-only loans. Because the initial monthly payments are typically lower than those for traditional amortizing loans, interest-only loans usually allow buyers to qualify for a bigger loan.
However, if home prices fall -- as some economists predict will happen if interest rates rise substantially -- those homeowners could end up owing more than their home is worth.
"When markets turn down, prices can drop as much as 10 percent in the first 30 days," Clay said. "In that case, some people might find themselves in a tough situation."
--------------------------------------------------------------------------------
E-mail Kelly Zito at kzito@sfchronicle.com.
Quote from TraderC:
According to DQ, So Cal homes went up by 20.2% in Feb, while Bay Area homes went up by 13.4%. The faster rate of appreciation in So Cal has been observed since 2001.
Looks like the sector rotation continues. Pretty soon, we will catch up to the Bay Area price level.
I am sure you meant to say "20.2% in Feb, YEAR OVER YEAR".
I believe that the faster rate of appreciation in the southern part of the state stems because the Bay Area started its appreciation much earlier due to the tech bubblemania. LA was still in a funk.
Sector rotation thinking is a stretch as real estate in both areas is the same asset class. Greenspan's liquidity is having its purposeful effect on most all asset classes....except he has been denied the only thing that matters, job creation, so no brass ring for the old man. This is nothing more than Bubblemania II, The Sequel. It will be judged a flop in the box office and historically with critics just like the first one.
No matter if "we will catch up to the Bay area price level", the higher it goes the more seeds for destruction are sowed along the way and the more ruinous the outcome. Bubbles always end that way.
Quote from TraderC:
According to DQ, So Cal homes went up by 20.2% in Feb, while Bay Area homes went up by 13.4%. The faster rate of appreciation in So Cal has been observed since 2001.
Looks like the sector rotation continues. Pretty soon, we will catch up to the Bay Area price level.
Remember that SoCal recently had 3000-4000 homes disappear from the market (fires). That leaves a lot of people with insurance money either throwing down big money on the current inventory of homes for sale, or tying up the time of the contractors that would typically build the new home inventory. Either way, I think LA, SD market is in for quite a ride until the loss of 3500 houses is fully absorbed.
Logically LA should catch up with the Bay area anyway. For the decade of the 90's there was a giant split in home prices around 90-91 (prior to that prices moved in sync in both areas). I suppose the 90-91 split can be blamed on SoCal's loss of defense contract jobs. With this current recession's job loss focused more on SF style jobs, its only natural that LA is surging ahead considering the current economic climate.
The P/E ratios are still way out of whack in both areas. Until something improves on that front I would be very leery of buying a house.