San Mateo heading up full market recovery…

San Mateo County Housing Market Has Lowest ‘Distressed Sales’ in State

“The dramatic drop in the share of distressed sales throughout the state reflects a market that is fully transitioning from the housing downturn,” said C.A.R. President Kevin Brown.

Renee Schiavone| | March 12, 2014 | link

The following is a news release from the California Association of Realtors: 

Vastly improved home prices over the past five years have changed the landscape of California’s distressed housing market, which is now just a fraction of what it was during the Great Recession, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said Tuesday.

In January 2009, 69.5 percent of all homes sold in California were distressed, which includes short sales and real estate-owned (REOs) properties. Five years later, that figure has shrunk to 15.6 percent.  More specifically, REOs comprised 60 percent of all sales in January 2009, while short sales made up 9.1 percent of all sales but rose to as high as 25.6 percent in January 2012. Short sales currently make up 9.2 percent of all sales.

During the same time period, California’s median home price has soared more than 64 percent from $249,960 in January 2009 to $410,990 in January 2014.

“The dramatic drop in the share of distressed sales throughout the state reflects a market that is fully transitioning from the housing downturn,” said C.A.R. President Kevin Brown.  “Significant home price appreciation over the past five years has lifted the market value of many underwater homes, and as a result, many homeowners have gained significant equity in their homes, resulting in fewer short sales and foreclosures.”

Read more…

The new and improved ARM loan – is it for you?

The Hybrid ARM Is Back – And It’s A Smart, Customizable Mortgage Option

Mark Greene | Forbes |  March 17, 2014 | link

Once upon a time in the mid-1990s — 1994 to be precise — 30-year fixed mortgage rates were hovering in the high single digits and threatening to break the 10% threshold. Some smart guy in some small bank somewhere had an idea for a better mousetrap and the Hybrid ARM was born. Part fixed, part adjustable with an initial “teaser” rate far below 30-year fixed rates, the Hybrid ARMs quickly became the mortgage financing product du jour.

Fast forward to last May, as much noise was swirling around the Fed’s tapering strategy: 30-year fixed rates ascended a full percentage point in less than 30 days, based only on the conversations of the small screen financial talking heads, and all before the Fed announced anything!  Not long afterwards, borrowers started to ask me about hybrids.   3/1, 5/1, 7/1, 10/1, what is the spread between the 30-year fixed, what are the caps, what is the index, how do they work?

Let’s review the mechanics:

Hybrid ARMs as the name implies, have a fixed rate component on the front end of the mortgage term (3 years, 5, 7 or 10) and an adjustable rate component on the back end of the mortgage term, when the interest rate can change/adjust annually.  For example; a 5/1 ARM in today’s market could have an interest rate that is fixed for the first 5 years at 3.00% compared to a 30-year fixed rate mortgage at 4.50%. For a $200,000 mortgage, that would save $170/month.  After 5 years/60 months, the interest will adjust annually based on an index (1 year LIBOR or 1 year Treasury/CMT), plus a margin of somewhere between 2.25% and 2.75%.

Of course there are caps on the interest rate adjustments.  Typically the initial adjustment cap is 2% above the start rate, unless the initial term is 5 years or longer, then the initial caps can be as high as 5%. The periodic or yearly caps are typically 2% above (or below) the existing rate and the lifetime cap is 5% or 6% above the initial fixed rate, depending on the term.

Since birth, hybrid ARMs have maintained  space on the entrée side of the menu, for a time even expanding to include interest only variations, which have become scarce now that QM is sheriff.  While fixed rates have enjoyed a prolonged period of historical lows, the demand for hybrid ARMs has fallen dramatically.

Read more…

They may not be low for long – time to lock in that rate!

Home Buyers Act On Seasonally Low Mortgage Rates, Homebuilder Confidence Rises In March

Dan Green | The Mortgage Report | Mrch 18, 2014 | link

Mortgage rates and markets change constantly. Stay 100% current by taking The Mortgage Reports by email each day. Click here to get free email alerts, or subscribe to the RSS feed in your browser.

NAHB Housing Market Index : Homebuilder confidence rises 1 point in March 2014

Cold weather continues to affect U.S. homebuilder confidence.

One month after falling 10 points to reach its lowest point in nine months, the National Association of Homebuilder’s Housing Market Index has stopped its slide and improved by one point.

For buyers of new homes nationwide, home prices are expected to rise through the rest of 2014.

Builder Confidence Points To “Poor” Conditions

Each month, the National Association of Home Builders (NAHB) polls its members on current market conditions as the members see it, asking three specific questions regarding the health of single-family, new construction housing.

The association then collates member responses and presents them as the Housing Market Index (HMI).

The Housing Market Index is scored on a scale of 1-100, with readings below 50 suggesting “poor” market conditions and readings about 50 suggesting “good” market conditions.

In March, homebuilder confidence climbed one point from the month prior to reach 47. The reading follows last month’s 10-point drop which was the largest one-month drop in the history of the HMI.

Read more…

SF starts building affordable homes…

San Francisco Tackles Affordable Housing Disparity

Cheryl Getuiza | | March 17, 2014 | link

Many already know this—there is not enough affordable housing in California for the working middle class.

It’s a harsh reality that’s only highlighted with recently released numbers in the Demographia International Housing Affordability Survey.

Four of the state’s major metropolitan cities landed in the top ten least affordable. They are San Francisco, San Jose, San Diego and Los Angeles.

In fact, the survey states San Francisco’s median multiple jumped to 9.2 times the income which is a big leap from last year’s 7.8.

The report goes on to say, “there are indications of a substantial worsening housing affordability situation in California, which was the core of the U.S. housing bust of the last decade that precipitated the Great Financial Crisis. House prices in the six major markets in California have risen nearly 40 percent relative to incomes since bottoming out in 2009.”

San Francisco’s Mayor has been on a mission to change all of that.

Recently, the Mayor announced the approval of plans by Lennar to begin construction of a new Alice Griffith public housing community to the existing site, fulfilling its promise to build new public housing without disrupting current residents. The Commission on Community Investment and Infrastructure unanimously approved the first “Major Phase” Application for Candlestick Point, which includes plans for the total rebuild of Alice Griffith and its 256 homes.

Read more…

Did you know that 889,000 people once in a state of mortgage distress have already repurchased a home? Welcome back, Boomerang Buyers!

REAL ESTATE: Where are the boomerang buyers?

EBRA GRUSZECKI | The Press-Enterprise | March 5, 2014 | link

A trustee’s sale led by outside the Riverside County Courthouse in Riverside, drew numerous investors on Tuesday, Oct.16, 2012 who bid on multiple homes at one time.

This headline definitely caught my eye: “The Boomerang Veers Off Course.”

It appeared in a March 4 newsletter by Irvine-based John Burns Real Estate Consulting, as Sean Fergus makes the point that of the 5.3 million households that lost a home to a foreclosure or short sale from 2007 to 2013, many are regrouping to become homeowners again.

Fergus wrote that 889,000 people once in a state of mortgage distress have already repurchased a home.

Some 1.6 million households will be stuck renting homes for “at least” seven years. Another 2.8 million households from that group will become homeowners again — making it into the boomerang classification — by 2021.

The Inland region of Riverside and San Bernardino counties is predicted to see the greatest activity, followed by Los Angeles and Phoenix.

Now, for the boomerang part: Renter households created by foreclosure and short sale activity declined annually over the past few years — falling from 5.3 million in 2009 to 4.4 million in 2014, Fergus said.

But with FHA loan limits falling $144,650 in the Inland region to $355,350 this year, he predicted that renters hoping to become a boomerang buyer in 2014 and beyond could be disappointed. FHA-backed loans are common in the boomerang buy-pool, he says.

Many in the industry agree the limit that was lowered from $500,000 could keep that boomerang moving in a straight line across Inland Southern California for some time: Houses that are likely to be affected the most are just rolling off the production line.

Read more…

SfunCubes: our new communities?

Solar Industry Jump-Starts a Revival in California

DIANE CARDWELL | New York Times | FEB. 25, 2014 | link

OAKLAND, Calif. — Back in 2009, when Danny Kennedy was looking for office space for the fast-growing solar services company he had co-founded, his venture capital investors recommended setting up shop in one of the “Twitterville kinds of areas” south of Market Street in San Francisco.

There, social media and peer-to-peer pioneers like Foursquare, Yelp, Airbnb and, indeed, Twitter had created a technology zone where innovative ideas could fly free and cross-pollinate among young workers meeting casually over food and drink.

Instead — after looking at buildings he deemed “foggy and frumpy and cold and wet,” not to mention expensive — Mr. Kennedy ended up in an airy loft across the bay here at Jack London Square. In just four years, the company, Sungevity, has grown to 300 employees from 55 in its 11,000-square-foot space overlooking the Oakland Estuary, helping jump-start the area’s stalled revitalization.

Taking things a step further, Mr. Kennedy, a former environmental advocate, has developed an incubator-accelerator program, the SfunCube, to attract and nurture other solar start-ups.

Danny Kennedy of Sungevity with Emily Kirsch, of SfunCube, in her program’s offices. Credit Jim Wilson/The New York Times

“The whole point of the SfunCube is to bring in a whole bunch of solar companies, populate the whole square with a bunch of solar professionals and turn it into, like, a solar campus,” he said.

“If we succeed in our task,” he added, “we’ll have thousands of solar industry workers here — they’ll want to walk to work or cycle. They’ll become the population that helps make that happen. The whole thing will be this nice, synergistic sort of lift-all-boats kind of deal.”

The effects of a growing solar cluster on Jack London Square are already visible in the crowds of workers grabbing a bite at restaurants like Bocanova, a beer at the sharply slope-floored Heinold’s First and Last Chance, or a Gibraltar at the Blue Bottle coffee roasters up the street. But those developments are merely ancillary to a broader vision, Mr. Kennedy said.

Read more…


Whole Foods is coming to town!

Groundbreaking for Whole Foods, Nordstrom Rack, Homegoods

Autumn Johnson | | March 11, 2014 | link

DUBLIN, Ca:  Hacienda Drive and Martinelli Way. Map Courtesy: Google Maps
DUBLIN, Ca: Hacienda Drive and Martinelli Way. Map Courtesy: Google Maps

Construction begins today on the highly anticipated Whole Foods, Nordstrom Rack, Homegoods trio of stores. Dublin Mayor Tim Sbranti and other local dignitaries will attend a ceremony to mark the groundbreaking for Persimmon Place in Dublin at 10 a.m. this morning.

The shopping center will be located at corner of Hacienda Drive and Martinelli Way in Dublin.

“We are ecstatic to welcome Persimmon Place to our community,” said Mayor Sbranti said in a statement. “This center will offer the upscale, high-quality retail choices that residents of Dublin want and expect, and we couldn’t be more pleased with the progress being made on this development.”

Read more…

Tax 101 for Landlords

Do You Understand Income Tax Considerations of Rental Properties?

Professor Baron | Zillow Blog | March 3, 2014 | link

A rental property can generate “taxable losses” that can be used to reduce your normal salary income, hence the federal income taxes you pay. It’s difficult for most people to understand how taxes work, and even more confusing once we get into the realm of rental properties and taxes. Note that understanding how taxes impact personal residences are a completely different topic, as those are governed by totally separate tax codes and go elsewhere on your 1040 form.

Below are some of the basics to understanding rental properties and federal income taxes.

Often I hear people saying that they want to buy some real estate to save money on income taxes. However, depending on your tax situation, owning real estate might not save you a dime on taxes. It wholly depends on your specific tax picture and the IRS rules about Passive Activity Loss Limitations

First and foremost you should never make real estate investment decisions based solely on tax considerations. The first order of business is do your due diligence and determine if an investment makes sense based on cash flows, cash on cash returns, renovation costs, rental income, financing, and the risk of any particular property. Once you believe it makes sense in every other sense, then you can contemplate the tax effects.

Important note: Always have a CPA, attorney or licensed tax professional guide you through your individual tax picture — this article is an illustration of one scenario but your scenario can be very different based on your financial picture.

To better understand, let’s first quickly discuss the IRS 1040 form.

Read more…

Could Oakland Become the Next Silicon Valley?

We’ve had several reports that Silicon Valley is moving north to San Francisco, but one report asks, “Why not Oakland?”

Oakland is cheaper than San Francisco and easy to commute to and from, argues GigaOm editor Tom Krazit, and despite its problems boasts a central location and a “vibrant” community. Krazit doesn’t oversell Oakland, in fact, he mentions it “isn’t exactly paradise.” However he does tout the culture, restaurants, weather and plenty of vacant commercial real estate.

The main commercial district of Oakland — which for the sake of this discussion we’ll consider the area roughly bordered by Jack London Square, Lake Merritt, I-980, and Grand Avenue — is already home to a few tech companies, including Pandora and whatever is left of But there are an awful lot of spaces that could accommodate a rapidly growing tech company, and a few places — like the old Sears store at Broadway and 20th right above BART — that used creatively could house much larger enterprises.

Krazit offers Oakland as a way to stop the tech sector polarization of San Francisco — mainly by moving it to Oakland.

While it is true that Oakland would benefit from more businesses, jobs and a bigger tax base, steeper real estate prices and rents may not benefit Oakland residents. At least one article, which appeared in the Guardian (U.K.) told about Oakland residents disliking techies setting up shop. In it, Oakland’s Mayor Jean Quan said the city would absorb the new residents to the city even if they were “white people from the Midwest.”

Read more…

Buyers still coming from across the Pacific…

Bay area real estate investing gets boost

Yu Wei | China Daily USA | February 11, 2014 | link

A new partnership is opening up opportunities for Chinese investors interested in San Francisco Bay Area real estate.

The collaboration is between Kidder Mathews, a San Francisco-based commercial real estate firm, and China’s Tsinghua Real Estate CEO Chamber of Commerce, a non-governmental organization comprised of more than 3,000 real estate company members.

“This will act as a bridge for Chinese business investment that wants to come to the Bay Area,” said Skip Whitney, executive vice-president of Kidder Mathews.

In 2012, Kidder Mathews opened its China Services Group (CSG), the only China-focused cross-Pacific real estate group in the US that aims to help Chinese investors based on the increasing flow – both business-wise and personal-wise – between China and the US.

“CSG is uniquely situated to help Chinese investors since we have Chinese Nationals in our company, which allows us to communicate in Mandarin and allows the investors to feel comfortable in understanding the local customs and challenges in doing business in the US,” Whitney said.

“We also go beyond the initial investment and acquisitionto work with other professional service providers, such as legal, tax and financing to insure that our client has covered all of the bases for compliance at the highest level for their investment to insure it will be successful,” he added.

Whitney said he and his team will be able to provide a menu of opportunities for the Tsinghua Real Estate CEO Chamber of Commerce investors, including acquisitions of core commercial office buildings in the West Coast gateway cities, office and tech buildings in Silicon Valley, life science building assets, residential joint ventures and development opportunities and retail projects.

Read more…