Walkable Neighborhoods Are Key to Millennial Homebuyers

Living in a highly walkable neighborhood is more important to millennials than it is to other generations, as nearly one-third of them use their feet as a regular form of transportation.

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In a recent survey conducted in conjunction with Portland State University, the National Association of Realtors found that 50 percent of millennials – defined here as persons born in 1981 and later – said that living within an easy walk of amenities was very important when choosing a place to live. The importance of walkability decreases with age: 43 percent of Gen Xers ranked it as critical, compared with 38 percent of baby boomers.

One reason that a neighborhood’s walkability is so important to millennials is because a significant number of them – 32 percent – reported walking to work or school within the past month, compared with 19 percent of Gen Xers and 13 percent of baby boomers. Millennials were also the most likely to stroll in their free time, with 62 percent saying that they walked to restaurants and shops and when running personal errands. Additionally, the survey found that millennials walked an average of 13.3 days per month, more than older generations.

Members of Generation X were slightly more prone to travel by bicycle: 28 percent reported having ridden a bike for transportation or exercise in the past 30 days compared with 26 percent of millennials and 21 percent of baby boomers. Gen Xers favored neighborhoods with bike lanes more than other generations, with 28 percent calling them very important.

Millennials are flocking to the Bay Area to take advantage of a booming economy and high-paying jobs, and the fact that the region’s major cities are some of the most walkable in the U.S. is likely an additional attraction. In its 2015 rankings of America’s most walkable cities, Walk Score named San Francisco as the second most walkable city in the country, with a score of 83.9 out of a possible 100. Chinatown ranked as the city’s most walkable neighborhood, with a perfect score, while four other enclaves received a 99.

Oakland ranked No. 9 in the country for walkability, notching a 68.5. Downtown tied Koreatown-Northgate as the most walkable neighborhood in the city, both scoring a 97.

Walk Score also ranks neighborhoods for their bike-friendliness based on four factors, including number of bike lanes and hills. Even with its famously steep terrain, San Francisco ranks No. 2 in the country for bike-friendliness with a score of 75.1. Perhaps not surprisingly, San Francisco’s best neighborhoods for bicyclists are all in relatively flat parts of the city, including the Civic Center and the Mission District, both of which received a score of 98.

With a Bike Score of 60.9, Oakland ranks No. 14 in the U.S. for bicyclists, with the Bushrod neighborhood in the northern part of the city netting a high score of 98. Nearby Berkeley actually has a higher overall Bike Score – 88.8 – than either of its larger neighbors but didn’t make the top 20 due to its size.

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New Homes Today Are Larger, With More Amenities

How does your home compare with the latest trends in residential construction? The U.S. Census Bureau recently released reams of data on new-home characteristics for 2014.

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Looking at data compiled over the past 40 years, new homes today are larger and come with more amenities than in decades past. Rental units are more likely to be part of large, multifamily developments than they once were. And some construction features, such as vinyl siding, have seen their popularity wax and wane over the years.

Take a look at some of the Census Bureau’s findings:

Of the 620,000 single-family homes completed in 2014:

  • 91 percent had air conditioning (up from 48 percent in 1974).
  • 10 percent had two bedrooms or less, while 46 percent had four or more. (Forty years earlier, 64 percent of new homes had three bedrooms.)
  • 4 percent had one and one-half bathrooms or less, while 36 percent had three or more. (It was a different story in 1974: 40 percent of homes had one and one-half bathrooms or less, and there were so few homes with three or more bathrooms that they weren’t even counted.)
  • 30 percent had vinyl siding as the principal exterior wall material. (Vinyl siding was first tracked by the Census Bureau in 1992, when it appeared on 23 percent of new homes. Its use peaked at 40 percent of new homes in 2002.)
  • The median size was 2,453 square feet (up from 1,560 in 1974).

Of the 437,000 single-family homes sold in 2014:

  • 72 percent were in a homeowners’ association.
  • 4 percent were in an age-restricted development.
  • 39 percent had one story, 56 percent had two stories, and 6 percent had three or more.
  • 71 percent were paid for using conventional financing, and 9 percent were paid for in cash.
  • 31 percent had both a patio and a porch.
  • The average sales price was $345,800 (up from $97,600 in 1984).
  • The average price per square foot was $97.09 (up from $60.21 in 1994).

Of the 264,000 multifamily units completed in 2014:

  • 48 percent were in buildings with 50 units or more (up from 20 percent in 1974).
  • 9 percent were age-restricted.
  • 47 percent had two or more bathrooms.
  • 5 percent were efficiencies.
  • The median size of units built for rent was 1,080 square feet. The median size of those built for sale was 1,432 square feet.
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California: Home to Most of the Country’s Priciest ZIP Codes

Seventy percent of the most expensive U.S. communities in which to purchase a home are located in the Golden State, with Silicon Valley of course well represented.

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Using data from real estate listings portal Property Shark, Business Insider ranked the 20 priciest ZIP codes in America based on the median home sales price between January 2014 and June 2015. Fourteen of those ZIP codes are in California, although the country’s highest-dollar real estate market is actually on Long Island.

Business Insider ranks Sagaponack, New York — in tony The Hamptons – as the most expensive place in America to buy a home, with a median sales price of $5.13 million. Four other New York ZIP codes made the top 20, including another in The Hamptons and three in Manhattan.

Besides Miami’s 33109 ZIP code, the rest of the country’s most expensive neighborhoods are situated along the California coast. Five of Silicon Valley’s most exclusive communities landed on the list, with residents earning some of the highest salaries in the U.S.

Atherton‘s 94027 ranks as the country’s second-most expensive ZIP code, with a median sales price of $5.05 million. Residents of the San Mateo County town pull in a median household income of $220,583, the third highest of any community included on the list.

Palo Alto‘s 94301 ZIP code captured the No. 5 spot, with a median sales price of $2.83 million. Los Altos Hills‘ 94022 ranked No. 10 ($2.6 million), followed by Portola Valley’s 94028 (No. 11, $2.45 million) and Los Altos’ 94024 (No. 17, $2.3 million).

Home shoppers who are lucky enough to afford a property in one of those prestigious Silicon Valley communities will call the country’s most elite and affluent tech executives neighbors. Atherton is home to Google Chairman Eric Schmidt and Hewlett-Packard CEO Meg Whitman, while Google co-founder Sergey Brin lives in nearby Los Altos Hills. In Palo Alto, where Business Insider says that home prices have doubled over the past 10 years, Facebook’s Mark Zuckerberg owns five homes and even purchased four neighboring properties in order to protect his privacy.

The other Golden State communities ranked among the nation’s priciest are all in Southern California: four in Los Angeles County, three in Orange County, and one each in Santa Barbara and San Diego counties.

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Marin County: Q2 Results

With a continued shortage of available homes and plenty of eager buyers, sellers controlled the market in Pacific Union’s Marin County region during the second quarter of 2015, as they have for more than a year. Home prices continued to increase throughout the quarter, and multiple offers were the norm – particularly for properties priced fairly and in desirable neighborhoods. It was not uncommon to see buyers offer all cash and waive contingencies to close deals quickly.

Competition among buyers was fierce as the real estate market in neighboring San Francisco tightened and tech money continued to move north. Aggressive offers were necessary for buyers to close a deal. Sales in Mill Valley and Kentfield were particularly strong, with many offers climbing far above asking prices. Private purchase agreements – reached without homes ever appearing on a local MLS and without competing bids – were not uncommon. Such off-market deals can simplify the sales process but don’t guarantee the highest possible prices.

Looking Forward: Sales typically slow during the summer months as buyers’ thoughts turn to vacations, but the Bay Area’s booming economy will ensure that Marin County homes will continue to generate strong interest from buyers while multiple offers for desirable homes will push prices higher.

Defining Marin County: Our real estate markets in Marin County include the cities of Belvedere, Corte Madera, Fairfax, Greenbrae, Kentfield, Larkspur, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito, and Tiburon. Sales data in the charts below includes single-family homes in these communities.

MEDIAN SALES PRICE

The median sales price represents the midpoint in the range of all prices paid. It indicates that half the prices paid were higher than this number, and half were lower. It is not the same measure as “average” sales price.

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MONTHS’ SUPPLY OF INVENTORY

The months’ supply of inventory is a measure of how quickly the current supply of homes would be sold at the current sales rate, assuming no more homes came on the market. In general, an MSI below 4 is considered a seller’s market; between 4 and 6 is a balanced market; and above 6 is a buyer’s market.

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AVERAGE DAYS ON THE MARKET

Average days on the market is a measure that indicates the pace of sales activity. It tracks, on average, the number of days a listing is active until it reaches “pending” status, meaning all contingencies have been removed and both parties are just waiting to close.

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PERCENTAGE OF PROPERTIES UNDER CONTRACT

Percentage of properties under contract is a forward-looking indicator of sales activity. It tracks expected home sales before the paperwork is completed and the sale actually closes.

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SALES PRICE AS A PERCENTAGE OF ORIGINAL PRICE

Measuring the sales price as a percentage of the final list price, which may include price reductions from the original list price, determines the success of a seller in receiving the hoped-for sales amount. It also indicates the level of sales activity in a region.

Q2 - Graph 5

 

A CLOSER LOOK AT MARIN COUNTY

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Bay Area Home Sales, Price Growth Lead Golden State

Bay Area home sales continued to set the pace for all of California in May, posting solid sales growth and home prices that rose on a yearly basis at more than twice the rate of any other region.

Map of the Bay AreaThe latest figures from the California Association of Realtors also show that the Bay Area, with more buyers than sellers, was the only region in the Golden State where homes sold at a premium, with final sales prices an average of 7.3 percent above asking prices.

Statewide, single-family home sales in May were down 1.1 percent from April but up 8.9 percent from a year earlier. The median home price rose 0.8 percent from April, and 4.4 percent from May 2014, to $485,830 — the highest price since November 2007.

In the Bay Area, meanwhile, home sales in May were up 2.2 percent from April and 1.8 percent from a year earlier. The median sales price, $846,900, was up 0.2 percent from April and 9.9 percent year over year.

San Francisco and San Mateo counties recorded the highest median sale prices in the state in May: $1,375,000 in San Francisco, up 22.8 percent year over year, and $1,330,000 in San Mateo, up 16.7 percent. They were followed in the Bay Area by Marin County ($1,153,120, up 11.6 percent), Santa Clara County ($993,000, up 13.1 percent), Contra Costa County ($829,640, up 9.2 percent), Alameda County ($814,930, up 8.8 percent), Napa County ($610,120, up 1.2 percent), Sonoma County ($566,040, up 15.4 percent), and Solano County ($360,490, up 13.8 percent).

In the Lake Tahoe/Truckee area, the median sales price was $403,420 in Placer County (up 5.3 percent) and $340,620 in Nevada County (up 22.6 percent).

Looking at home sales, Solano County posted the biggest annual gain in the Bay Area, up 18.6 percent year over year, followed by Alameda County (up 6.5 percent), Napa County (up 6.3 percent), Contra Costa County (up 2.7 percent), Santa Clara County (up 2 percent), and Sonoma County (up 1.1 percent). Sales declined by 13 percent in San Francisco, followed by San Mateo County (down 9 percent) and Marin County (down 5.8 percent). Farther north, Placer County sales rose 10.5 percent, and Nevada County sales rose 8 percent.

The average price per square foot for an existing single-family home in California was $226 in May, up 3.2 percent from a year earlier. San Francisco had the highest price per square foot, at $818, followed by San Mateo County ($775) and Santa Clara County ($591).

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Real Estate Executives Forecast More Growth in 2016

New home sales and prices should rise in the coming year, say recent projections from housing industry executives, while the chance of a downturn over the next three years appears less likely than it did one year ago.houseglass

These were a few of the key takeaways from The Summit, a two-day conference hosted by John Burns Real Estate Consulting. Held in early May, the event gathered nearly 80 real estate industry executives — including home builders, land developers, and investors – to gauge where the U.S. housing market is headed in the coming years. As a subscriber of the company’s research, Pacific Union CEO Mark A. McLaughlin attended The Summit, the only executive from a residential real estate brokerage at the conference.

When asked to project home price growth over the next year, 69 percent of attendees felt that prices will rise by 2 to 5 percent. Last year, the majority of attendees called for 5-percent appreciation, and the company’s Burns Home Value Index indicates that prices actually rose by 4.1 percent. JBREC predicts price of growth of 5 percent in 2015 and 4.5 percent in 2016.

Conference participants also expect new home sales to increase by about 10 percent from 2015 to 2016, down from JBREC’s current forecast of 12 percent. Fifty-three percent of attendees believe that new home sales will rise by 5 to 10 percent, while 38 percent predict sales gains of 10 to 20 percent.

This year, real estate industry executives are more optimistic about the overall state of the nation’s housing market. Attendees put the chance of a housing downturn at 17 percent, compared with 22 percent at last year’s event.

Along with home prices and sales volume, most conference participants also think that mortgage rates will increase over the coming year, with 59 percent predicting gains of between 0.25 and 0.75 percent. Another 36 percent believe that rates will remain essentially flat. Currently, JBREC projects that mortgage rates will rise by 0.3 percent over the next year.

According to the company, a key area of disagreement involved investment location. The majority of participants felt it was preferable to invest in more expensive markets with plentiful jobs — such as downtown San Francisco — because even if greater costs mean lower returns, such areas will always be in demand. Others indicated a willingness to venture into outlying areas because they feel the risk/reward proposition outweighs the high prices of real estate in urban centers.

JBREC says that attendees also were split on homeownership rates amongst millennials. Some feel that fewer millennials will own homes due in part to affordability conditions, while others believe that ownership rates will be about the same as with previous generations – just delayed.

In November, Pacific Union and JBREC will team up for the second consecutive year to deliver the San Francisco Bay Area Real Estate and Economic Forecast 2018, which will offer our clients an exclusive, in-depth look at what to expect in Northern California in the coming three years.

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Bay Area Is the Nation’s Hottest Market for Home Sellers

As has been the case for the past few years, Bay Area home sellers remain firmly in the driver’s seat, with four of our local counties ranking among the top 10 in the nation for largest premiums this spring.cash1214

RealtyTrac’s most recent U.S. Home Sales Report says that U.S. single-family homes and condos sold for almost exactly 100 percent of their estimated full market value in April. In a statement accompanying the report, company Vice President Daren Blomquist said that while that statistic indicates a national overall housing supply-and-demand balance, most local markets tended to favor either buyers or sellers.

According to the report, homes sold for more than their estimated full market value in 27 percent of U.S. counties in April, with Northern California and Bay Area counties dominating the list of places where sellers enjoyed the largest premiums.

Home sellers in Alameda and San Francisco counties netted the largest amounts over market value in the nation, both at 108 percent. Marin and Contra Costa counties tied four others for second place – including Yolo in the Sacramento area — with sellers receiving 107 percent of market value. Shasta County also cracked RealtyTrac’s list, with the average home selling for 106 percent of market value. No state other than California had more than one market that ranked among the top 10.

In its latest monthly home sales report, the California Association of Realtors said that the Bay Area was the only region in the state where homes were selling for above asking price – an average of 107.1 percent in April. CAR wrote that a lack of inventory throughout the region is the primary factor pushing final sales prices beyond original prices.

Bay Area counties had the fewest available homes for sale in California in April, with the months’ supply of inventory (MSI) at 1.6 in San Francisco, San Mateo, and Santa Clara counties. Alameda had the second smallest MSI – 2.0 – while Contra Costa and Marin tied San Benito and Yolo counties for third lowest at 2.4.

According to Pacific Union President Patrick Barber, employing the services of an expert, trusted real estate professional is the most important thing that sellers and buyers can do to navigate highly competitive markets with low supply levels. “Too often do I see good buyers lose out or sellers leave money on the table because of poor representation,” he says. “Hire a real estate professional the same way you would a doctor or a lawyer; get referrals and interview them.”

Source: http://blog.pacificunion.com/bay-area-is-the-nations-hottest-market-for-home-sellers/

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Mortgage Availability Improves for Sixth Straight Month

Good news for homebuyers: It’s becoming easier to get a mortgage.Mortgage

Relaxed government regulations, new offerings from federal loan programs, and new jumbo-loan options helped raise the Mortgage Bankers Association’s monthly Mortgage Credit Availability Index by an average 0.5 percent from March to April — the sixth straight month of increased access to home loans.

“Mortgage credit availability increased on net in April,” Mike Fratantoni, MBA’s chief economist, said in a statement. “The increase was driven by new offerings of FHA’s 203K home improvement program, new VA offerings, and new jumbo products.  The increase was partially offset by some investors tightening underwriting criteria on conventional cash out offerings.”

The good news from the MBA follows recent announcements from the federal government of programs designed to improve access to home loans, including Fannie Mae and Freddie Mac‘s decision to back 3 percent down-payment loans, as well as the Federal Housing Administration’s move to reduce its mortgage insurance premiums.

Also, a recent survey of real estate professionals by the National Association of Realtors shows improved mortgage options for homebuyers, with lenders reportedly more willing to accept slightly lower FICO scores. In August 2013, most homebuyer FICO scores were 740 or higher, NAR said, but last month the majority of scores ranged from 620 to 740. Real estate professionals also reported an increase in the number of their clients obtaining a loan while making zero to 6 percent down payments.

Access to home loans has been steadily improving for three years, according to the MBA. According to the report, access to loan programs from government agencies such as the FHA, Veterans Administration, and U.S. Department of Agriculture improved 1.1 percent from March. Access to jumbo loans improved by 0.8 percent in April and access to conforming loans rose by 0.2 percent, while conventional loan access declined by 0.6 percent.

Jumbo loans — generally, those above $625,000 — are a key element of the high-priced Bay Area real estate scene, and improved access to these loans bodes well for homebuyers.

“We’re seeing lots of new investors coming into the jumbo market,” Dennis Kowalski, branch manager at Pacific Union joint venture Mortgage Services Professionals, said. “That’s a good sign for homebuyers.”

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Understated Beauty Defines Architect Barbara Chambers’ Mill Valley Home

Barbara Chambers is one of my favorite architects.  Her Larkspur home is featured in the new SFC&G Magazine. Congratulations Barbara!!

Ivory shades like White Dove and chalky Clunch predominate in architect Barbara Chambers’ project binders. This rigrously achromatic aesthetic extends from the residences she designs to her own understated wardrobe and even her elegant presence, which whispers rather than shouts. “Neutrality allows me to infuse my interiors with serenity and a sense of calm,” she explains. “I prefer to let artwork, accessories and, most importantly, people,  provide a space with its color.”

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Chambers’ work instead showcases a mastery of proportion. Her own home, the fourth she has designed over the past two decades for herself and her husband, achieves its impact through scale, symmetry and purity of form. In relative terms, the two-story, 2,500-square-foot Mill Valley house may be smaller than what she typically designs for clients, but it feels perceptibly grand and airy. One enters the home, for example, through a five-by-five-foot foyer that releases into a dramatic 20-by-46-foot great room. In that space, which contains the living, dining and kitchen areas, 10-foot ceilings and stately doors confer an aristocratic stature.

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“Guests are sometimes speechless when they come here for the first time,” says Chambers. “I think they’re surprised that expansiveness can feel this intimate.”

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The first floor living spaces are delineated not by walls—indeed, there are none separating them—but by furniture groupings, a strategy that gives the space a modern, loft-like feel. As is the case with most of her firm’s current project list (15 new residences and just as many renovations), Chambers was responsible for the interior design as well. A “less is more” approach underlies its spare sensibility. “I have no tolerance for clutter,” she says. “Life’s too short to be surrounded by things you don’t absolutely love.” Instead, fumed white oak floors and white linen drapes provide a pure canvas for furnishings and art.

The sitting area is centered around a limestone hearth and framed by a pair of customized George Smith sofas and day bed in mohair velvet. A coffee table by Jean Michel Frank for Hermès, and a Cedric Hartman floor lamp and side table complete the scene, adding modernist touches. The dining area, anchored by Victoria Hagan’s dramatic Parker table, flows into a kitchen space defined by a marble island. Throughout, Chambers’ symmetrical repetition adds even more perceived volume, particularly when three drum-shaped ceiling pendants, suspended on an axis with the fireplace, reflect into infinity in a tall mirror.

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Chambers also achieves a graceful symbiosis between the indoors and outdoors. “I sited the house so it’s oriented to the south. That exposure is magical in this part of the world,” she notes. “In the winter, the sun’s low position pushes warmth inside. And in the summer, its height bathes the furnishings in a golden cast.” Architectural elements enhance the connection as well: Window casements frame landscapes—like the orderly lineup of rosemary bushes outside her study—as well as any Lippi portrait, and the Dutch front door opens to frame beds of English boxwood and hydrangeas.

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Chambers often brings new clients here as the first stop on a tour of her firm’s locally built projects, and on several occasions they have said, “No need to go any further. This is exactly what I want.” Chambers notes: “It’s so wonderful when that happens. It not only validates my aesthetic, it validates how I live.”

A version of this article appeared in the April/May 2015 issue of San Francisco & Gardens with the headline: Simplicity and Grace.

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Golden State Real Estate Investors Optimistic About Price Growth

An overwhelming majority of California real estate investors believe that property prices will grow in the coming years, according to a recent survey, and they’re anticipating handsome returns.thumbs_up

In its 2015 Investor Survey, the California Association of Realtors (CAR) found that 75 percent of investors believe that real estate prices in their neighborhood will increase over the next five years, while 70 percent expect appreciation in one year. Investors project that their property prices will grow by 27 percent during the period of ownership, an average of 6.1 years in 2015. In both 2013 and 2014, investors said they would keep their homes for an average of about eight years.

And if recent home price gains are any indication, California real estate investors have just cause for the sunny outlook. According to CAR’s survey, the median sales price paid for an investment property increased from $292,000 in 2013 to $375,000 in 2015.

Overall, the number CAR real estate professionals who reported closing a transaction with an investor over the past 12 months declined from 39 percent in 2013 to 26 percent this year. Survey respondents said they had an average of 5.4 investor clients in 2015, essentially unchanged from last year but down from seven in 2013.

California investors still far prefer single-family homes, with 72 percent buying that type of property. Multifamily property purchases by investors grew from 14 percent in 2013 to 21 percent in 2015, a trend that CAR attributes to the depletion of distressed housing inventory on the market.

The survey found that two-thirds of investors financed the transaction in all cash, virtually identical to the previous two years. About half of investors funded the purchase with profits from a previous investment, while 42 percent tapped their personal savings.

Two-thirds of investors also plan to become landlords – with the average monthly rent pegged at $1,850 — while about one-quarter intend to flip the property. California investors tend to gravitate toward homes that are already in excellent shape, with 69 percent purchasing properties that needed no or minor improvements. Those that did have to renovate spent a median of $10,000, down from $15,000 last year.

Southern California is still the preferred locale for investors in the state, accounting for 46 percent of transactions in 2015. However, investor activity in Northern California is rising, up from 15 percent in 2014 to 24 percent this year.

Source: http://blog.pacificunion.com/car-2015-investor-survey/

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