Big Day In Real Estate News

Lot’s of Real Estate News Today, so right to it . . .

The Senate Close to Deal Replacing Homebuyer Tax Credit that expirres December 1. The deal replaces the expiring $8,000 tax credit for first- time homebuyers with a smaller one that would expand access to so-called step-up purchasers, two people familiar with the matter said.

The deal would reduce the size of the tax credit to 10 percent of the sale’s price, capped at $7,290, the people said. The credit would be available on home purchases that are under contract by April 30, and borrowers would have 60 days more to close the sale. The existing credit is due to end Nov. 30.

The bigger part of the proposed credit is the change in the income levels. The income eligibility for first-time homebuyers would remain the same at $75,000 for individuals and $150,000 for couples but the big change is for the income criteria for step-up buyers. This would include a whole new set of buyers and increase the eligibility to $125,000 for individuals and $250,000 for couples.

For Alameda buyers the change in income level will allow more buyers for the first time to take advantage of the Federal housing push. Alameda’s home prices made it very difficult for a first time home buyer to qualify for a loan and the credit.

This is one of three proposal lawmakers are trying to push regarding housing. Lawmakers are trying to attach the Senate legislation, which is also being considered by leaders in the House, to a bill extending unemployment benefits.

The Case-Schiller report came out today and reported home prices rose in August for the third straight month, a rapid pace of recovery that surprised economists and raised questions about how long the trend can last.After a steep three-year descent, home prices rebounded this summer at an annualized pace of almost 7 percent, the Standard & Poor's/Case-Shiller home price index.

The upside is affordability has improved creating an opportunity for some buyers that were priced out of the market and investors. Home prices have returned to quaint 2003 levels, according to Standard & Poor’s.

We have seen locally that the Island median and average prices have fallen to $517,000 and $562,064 respectively for September, but are not even close to January’s median of $457,000 and March’s average of $502,720.

Finally a week after the National Association of Realtors reported showing a big jump in sales of existing homes last month, a government report says new home sales declined in September. Sales of single family homes fell 3.6 percent from August levels, and were down 7.8 percent from September of 2008, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development. The report also says the number of new houses for sale at the end of September nationwide was 251,000, representing a 7.5 month supply. That is the smallest number of new homes on the market since November 1982, according to Bloomberg data. The National Association of Realtors last week reported sales of existing homes, which make up the vast majority of home sales, jumped 9.4 percent
Neither report breaks out sales by metropolitan area.

Locally, Alameda has seen increasing sales:
June 41
July 39
August 52
September 53

Predictions, Predictions

Talk in the Real Estate industry surrounds usually two conversations: Has the market bottomed or has the market peaked? An as I eat at Jim’s Coffee Shop or stop by Spritzer’s Café I hear local Alamedans repeat many of these conversations.

There are many that believe that the bottom has not yet come for the Nation’s housing market. CNNMoney writer Les Christie penned an article today titled “Homes: About to get much cheaper.”

If you thought home prices were bottoming out, you may be wrong. They're
expected to head a lot lower.

Home values are predicted to drop in 342
out of 381 markets during the next year, according to a new forecast of real
estate prices.

Looking at the past 21 month, Homeowners in Alameda saw the median home price fall to a low of $457,000 in January of this year. Since that low the median price for the Island has gone up as sales volume increase. April was the peak for the year at a $602,000 median.

On the negative side for our community, September saw a 5 percent year-over-year decline; from $545,000 to $517,000 in 2009. If you compare this to the rest of the Nation this is a mild contraction.



Back to the article. For next year Fiserv, a financial information and analysis firm, predicts the overall national median home price is predicted to drop 11.3% by June 30, 2010.

Places that have been hard hit in Florida will continue to suffer according to the report. Miami, for example, is expected to be the biggest loser. Prices are forecast to plunge 29.9% by next June -- after having already fallen a whopping 48% during the past three years. Fiserv predicts: Orlando, Fla., 27% price decline; Las Vegas, expected to lose another 23.9%; In Phoenix could fall another 23.4%.

These dire predictions should not impact Alameda’s local home price. Jobs and inventory will have more impact than what is happening for the rest of the country. But if housing continues to fall you will see the trickle of decline.

As I wrote about last month both S&P/Case-Shiller Home Price index and NAR have predicted prices have stabilized. The tax credit has help spur sales, but the market assistance ends when the credit expires on Dec. 1 and a new wave of foreclosure problems coming from higher priced loans and prime mortgages are due to hit the market.

Big shout out to my new blogging friends, I taught a session on Real Estate Blogging yesterday and got 30 people up and running with brand new blogs. Welsome and start writing.

Has The Housing Recovery Begun? Maybe

Some more positive news from the July numbers as home prices rose for the third month in a row, the data shows that housing recover is underway but it is still very fragile. The Standard & Poor's/Case-Shiller home price index of 20 major cities climbed 1.2 percent from June to a reading of 143.05. The index has risen at an 8 percent annualized rate in the three months to July, the best performance since early 2006.

The index, however, is down about 33 percent from the peak in mid-2006. Home prices are now at levels not seen since the third quarter of 2003. And prices in Las Vegas, Detroit and Seattle are still falling, on a seasonally adjusted basis.

Home prices continue to fall and are 13.3 percent below July a year ago. The annual declines have manifested in all 20 cities that the report covers. This decline has been reported for six straight months.

In Alameda, we have seen median home price rise and the inventory has been sucked up over the past three months. The Island reached a 45 week low of 122 units. This is 32 percent decline in 10 weeks. Normally low inventory means a price will begin to rise. A preliminary look at September sales shows that this may be the fact.

There are still several risks to the national housing recovery, including rising unemployment and foreclosures and the expiration of a tax credit for first-time home buyers.

The biggest factor, in my opinion, still weighing on the housing sector is jobs and wages. Wages in the United States are lagging and have declined 5 percent year-over-year and job loss continues to grow. This segment of the economy needs to stabilize for housing to correct.

As I have written about in the past, the shadow inventory of distressed properties will have a major impact. If the banks are still holding on to a large number of homes and they flood the market in the spring this will destabilize the housing market.

Some experts believe that the housing market has hit bottom. Low price inventory has cleared in many cities and bidding wars have evolved in many of these areas. The upper levels of the market are having more trouble with higher priced homes sitting longer.Places like Las Vegas that had a gamblers feel to housing was one of the most speculative markets during the boom. As quick as you win in Vegas you also lost with homes down almost 55 percent from their peak. In August, almost 80 percent of home resales in Nevada were either a foreclosure or a sale below the value of the mortgage, according to a survey by the National Association of Realtors. The Detroit housing market is reeling from layoffs in the automotive industry. Seattle, by contrast, was one of the last areas to enter the downturn so prices there have yet to hit bottom.

The Alameda Real Estate market has been more like Austin, TX and Salt Lake City, UT where the pullback has been more moderate. The good part for Alameda homeowners is the region is bouncing back.Home prices rose in 13 metro areas for at least three straight months. The biggest gains in July were in Minneapolis, San Francisco and Chicago.


More on Case-Shiller

Lots of News So Here is: Three Dot Round Up

I have been trying to get to this post but time has been just flying the last two days. There has been a lot of news in the last 24 hours regarding Real Estate both nationally and locally. So I thought a three dot round up would be appropriate.

First a review of the Alameda Real Estate Inventory data, the chart is below. After coming off a 15-week high inventory pulled back this week to 174 units for sale. This may be good news with 33 sales already recorded for the month of July and with a few days left in the month we may be able to surpass last month’s 41 units sold . . .

. 7/26/2009 . Total 174 . 94501 139 . 94502 35 . SFR 105 . Condo 39 . Multi-Family 28 . Short Sale 12 . Foreclosure 13 . Price Reductions 62 . High List $1,899,000 . Low List $232,900 .

The Bay Area is "Hot" in distressed neighborhoods. Oakland 94606 has been named one of the top 10 "hottest" real-estate markets in the country by Online real-estate company Zip Realty. A glut of foreclosures is leading some areas to see bidding wars -- just like the old days. Eight of Zip Realty's ten hottest markets are in California. While the cold markets, where offers are coming in at less than list price, are concentrated in the southeast, principally in Georgia and Florida. Of the 182 Bay Area zip codes the company included Alameda’s 94501 was 99th with homes selling for 97.51 percent of the list price. The 94502 was 137th on the list at 96.24 percent. I guess the Island is lukewarm. The details of the company's second-quarter Home Hunter Report. . .

Prices nationally continue to decline but just not as much as the past months. The Standard & Poor's/Case-Shiller home price index for May showed a narrower decline in prices for a fourth straight month, but in its 20-city gauge was still down 17.1% from a year ago. While the reading was an improvement from the 18.1% decline in April, it was also the latest reminder that the struggling housing market still has a long road to recovery. . .

New home sales rose by the largest amount in more than eight years last month, in another sign the housing market might be bouncing back from the worst downturn in decades. The Commerce Department said Monday that sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000. . .

The Fall of Home Prices Nationally Continues

Today, starts the release of a fresh batch of housing report with The Standard & Poor's/Case-Shiller home-price index for March is due today, the National Association of Realtors releases April home-resale data Wednesday, and the Census Bureau releases new-home-sales numbers Thursday.

These numbers will be the first indication if home sales and construction are at the bottom and could soon rise. Most Economists and industry expects expect to see in this week's numbers a confirmation that the swing has leveled.

For housing to recovery prices must stop falling. For Alameda we saw April of this year stop the slide of both median and average sale price. The concern is the month-to-month volume is small and variations in these numbers are easily manipulated by just a few sales.



Link to Larger Chart

The news from Case-Shiller Home Price Indices Prices showed that the falling prices have not stopped, but have slow down. U.S. single-family homes fell 18.7 percent in March from a year earlier and 19.1 percent in the first quarter, the most in its 21-year history. Home prices have fallen 32.2 percent since peaking in the second quarter of 2006 and are at levels not seen since the end of 2002.

All 20 cities in the index showed monthly and annual price declines, with nine setting annual records. Fifteen cities posted double-digit drops and three cities — Phoenix, Las Vegas and San Francisco — all recorded declines of more than 30 percent.

Nationally an avalanche in the supply of housing has driven prices down and will keep a lid on prices even as demand rises. Six months of inventory is considered balanced and given the inventory levels the market still has a long road to recovery. Currently, national existing-home inventories are down to 9.8 months' supply, but off their recent peak of 11.3 months. In Alameda, using a four month median of sales, the Island is carrying a little more than seven months of inventory.

Last week we discussed a massive shadow inventory of bank- and investor-owned homes. This inventory could be enough to push existing-home supply pass 12-months. Based on the RealtyTrac numbers we reported last week a 192 properties have yet to hit the open market, that would push Alameda’s inventory beyond 15-months.

The states of Nevada, Florida, Michigan and California, also have unemployment rates above the national average, inhibiting demand. Many areas with big overhangs also are riddled with distressed sales, which comprise more than 50% of total sales in some metro areas of California, Arizona and Nevada.

As long as prices are falling, banks will take more losses, consumers will wait to buy.

Down But Not Out

This week the Case Shiller report was released and the data for San Francisco Bay Area showed the home housing prices have been hit hard. Home prices in the San Francisco Bay Area fell a massive 32.4 percent for the month of January. The more than one-third making decline gave our metro the distinction of being the third worst area out of the 20 metro areas the reports covers.

Only Las Vegas (32.5%) and Phoenix (35%) had larger declines. These two markets have been hit hard by foreclosures and are much smaller metros. The Case Shiller report tracks single-family home prices from available sales data.

Since I focus on Alameda, I wanted to see if we had seen similar declines in homes purchase in 2004 and 2006 and sold in the last few months. Although there were only a handful of examples these sharp declines did exist in Alameda.

Here are just a few examples:

Property: 3221 Encinal

Purchased: November 1, 2006

Purchase Price: $679,000

Sold Date: February 19, 2009

Sold Price: $420,000

Decline: 38%

 

Property: 1809 St. Charles

Purchased: August 15, 2005

Purchase Price: $690,000

Sold Date: January 22, 2009

Sold Price: $457,000

Decline: 34%

 

Property: 26 Maitland

Purchased: February 7, 2006

Purchase Price: $592,000

Sold Date: February 25, 2009

Sold Price: $460,000

Decline: 22%

I thought it would be interesting to see how a few properties purchased in 2004 were holding their value. I used Zillow for the estimated value, but I am very cautious about using Zillow valuations because the accuracy can be off. This is a whole lot of what if game, because there may be hidden value that is not taken into account. I do think the tool gives a fair overall look into what the declines in Alameda have been in the past few years.

The first property was the highest price property sold for the year 2004.

Property: 1193 Sherman

Purchased: July 27, 2004

Purchase Price: $1,675,000

Zillow’s Estimate: $1,532,500

Decline: 9%

 

Then next one was a million dollar home.

Property: 1831 San Jose

Purchased: May 5, 2004

Purchase Price: $1,000,000

Zillow’s Estimate: $814,000

Decline: 19%

 

The final two were a home purchased in the $700,000 and $500,000 ranges.

Property: 1311 San Antonio

Purchased: June 4, 2004

Purchase Price: $780,000

Zillow’s Estimate: $689,500

Decline: 12%

 

Property: 2056 Pacific

Purchased: April 16, 2004

Purchase Price: $560,000

Zillow’s Estimate: $485,000

Decline: 13%

 

Link to the Report: Case Shiller Indices,

A little mood Music from the Animals:

Tumbling Down

Yesterday, it was reported that U.S. home prices tumble at record pace with home prices off 18.5 percent in December from the prior year according to two housing indexes.

As we talked about in yesterday's post, the Federal Government’s new “Homeowner Affordability and Stability Plan” may find more people ineligible as prices fall, because homeowners may not qualify. The estimated 5 million borrowers in good standing who are current on their payments but owe from 80 percent to 105 percent of their home's value would be able to refinance into a lower interest-rate loan.

Nationally, home prices have fallen to 2003-levels, and half of the metro areas in the 20-city Case-Shiller Home Price Index have lost more than 20 percent of their values from their peaks in 2006. The Federal Housing Finance Agency also reported that prices saw their largest annual decline on record since 1991; dropped 8.2 percent from 2007 to 2008.

The Case-Shiller Report revealed that San Francisco saw home values lose more than 30 percent in December. In Alameda, those on the Island saw a 10% decrease from December 2006 to the same month in 2008. The year-over-year change was 4.3%.

December 2006 median $615,000

December 2007 median $588,000

December 2008 median $552,500

The more startling number is if you look at 24-months of median pricing and see the 20% swing from a high in September 2007 to the low in September 08. Because of the low sales volume in Alameda the swings in median can move pretty dramatically.

If you look at the Alameda 2007 median home price verse the 2008 you will see about a 7.5% decline in price. I think that this more of a reflection of the actual market, but we are seeing several individual properties with bigger declines. The next three months will give us a true feeling of the direction of the market as we enter the traditional buying season.

12-months 2007 median price $649,000

12-months 2008 median price $600,000

Video on the Industry reports

Sigh and an Ugh: National Housing Numbers

Well . . .(BIG sigh). . .the National Housing picture continues to paint a very bleak outlook. The two best quarterly housing reports came out yesterday, The Standard & Poor's/Case-Shiller housing index and the National Association of Realtors (NAR) report on median home price, and (another BIG sigh and an Ugh) the numbers are just down right scary.

I always wait for the Standard & Poor's/Case-Shiller 20-city housing index each quarter but report revealed that home prices continue the free fall. Home owners saw prices decline by a record 18.2 percent from November 2007. This is the largest decline in home value since the inception of the Case-Shillar report began in 2000. The 10-city index dropped 19.1 percent, tied with October for the biggest drop in its 21-year history.

Of course Alameda has seen it share of decline in the market, but not the type of numbers in the cities that had the biggest housing bubbles. Phoenix, Las Vegas and San Francisco all reported annual price declines of more than 30 percent in November, according to Case-Shiller. If the Island does see this type of decline you will see homeowners in shock and walking the streets asking what happened. An example of the impact of this decline: $600,000 home in 2007 (multiplied by 18% decline) is now $492,000. 

If you use the National Association of Realtors median home numbers it is not much better. NAR reported the national median home price fell a record 15 percent last month to $175,400, down from $207,000 a year ago. In Alameda we saw a 7.6% decline in median home price.

The light at the end of the tunnel, the good news, the thing to hang you hat on is interest rates are low and with a  significant down payment, anyone who buys now will save money in the long term. The trouble in Alameda is most homes fall into the Jumbo Loan category and trying to find financing will be difficult.

Alameda's median price in 2007: $649,500

Alameda's median price 2008: $600,000

Bad News in Residential Housing Continues

The news does not get any better with housing, even on the second to last day of the year. After the holiday I will take a closer look at how today's report is reflected in the Alameda Residential Housing market. But the synopsis is: The Standard & Poor's/Case-Shiller 10-City Composite Index was released today and it showed a plunged 19.1 percent from a year ago, the steepest declines in 20 years of available data. The 20-city index declined 18 percent.

Read the SF Chronicle Story:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/12/30/BUBJ15147U.DTL&tsp=1

Alameda October Sales Data

The National and Regional data concerning existing home sales is downright depressing. So I dug into the Multiple Listing Service to take a look at sales in Alameda over the last 13-months and found that our micro market is holding up.

Starting in November 2007, Alameda saw a four consecutive months of declining sales. Sales spike in April and July of this year and bottomed in September. Unlike the National numbers Alameda had a solid October with 47 closed transactions a small increase over the prior year.

According to the National Association of Realtors , existing-home sales fell 3.1 percent to a seasonally adjusted annual rate1 of 4.98 million units in October from a downwardly revised pace of 5.14 million in September, and are 1.6 percent below the 5.06 million-unit level in October 2007. Total housing inventory at the end of October slipped 0.9 percent to 4.23 million existing homes available for sale, which represents a 10.2-month supply2 at the current sales pace, up from a 10.0-month supply in September.

Alameda is see pricing pressure with 71 of 172 listing have instituted a price reduction. Plummeting national home prices established yet another benchmark low in September and according to several reports and real estate observers many say the worst is still to come.

In the Case-Shiller report released yesterday, of the 20 cities tracked, the San Francisco metropolitan region experienced the third largest annual drop, 29.5 percent, and by far the largest monthly decline, 3.9 percent. The San Francisco Metro is defined as Alameda, Contra Costa, Marin, San Francisco and San Mateo counties.

 

 

The true test of the Alameda Housing Market will come in the upcoming slow winter months. If January and February sales can outpace last years sales it will be a good sign that the market in Alameda may have found the bottom.

Weekly Inventory Report -- Total Alameda Inventory

Data Pulled November 24, 2008 at 11:30 AM

Total Listings: 172

Single Family Residences: 102

Condominiums: 40

Multi-Family: 30

Short Sales: 20 

Foreclosures: 15 

Highest List Price: $1,995,000 

Lowest List Price: $219,900

U.S. home prices in free fall

The Chronicle is reporting new housing numbers for the Bay Area. The San Francisco region experienced the third largest annual plunge of 29.5 percent, and the largest monthly decline, 3.9 percent.

http://tinyurl.com/5mhj9j