The Federal Open Market Committee did not raise interest rates yesterday but not for the lack of confidence in the economy. The FOMC wants further confirmation that everyone is benefiting from the employment growth.
A separate report says that California leads the nation in economic output, with the San Jose metro area growing at the fastest pace in the nation in 2015, an impressive 8.9 percent. The Bay Area follows closely, with 5.8 percent annual growth.
Tech-heavy metro areas are seeing the fastest economic growth in the nation.
The Bay Area is one the most attractive places for businesses, due to talent, knowledge, and the spillover effects of the tech industry (not to mention the weather).
Three of the five largest U.S. companies by market valuation are located in the Bay Area.
California’s economy is poised for strong growth, though addressing the housing affordability conundrum is critical.
Getting a grasp on the U.S. economy has become increasingly more divisive. Some say the country is doing great, and some say we are doing awful. At the very least, FOMC Chairwoman Janet Yellen announced yesterday that it will not raise interest rates this month. The group came across feeling conflicted on the course of action, much like the rest of the economic experts who closely watch the Federal Reserve’s decisions. It seems that the U.S. is truly starting at the tale of two economies. On one hand, tech-heavy areas are bustling, while in others there are still people who are unemployed, underemployed, or otherwise not better off than they were a few years ago.
One thing we can say with certainty is that most of the California’s metropolitan areas are doing an outstanding job on the economic front. The Bureau of Economic Analysis released 2015 gross domestic product estimates this week for the U.S. metropolitan areas. The San Jose-Sunnyvale-Santa Clara metro area saw its GDP grow by 8.9 percent in 2015, the largest increase in the U.S. The San Francisco metro area grew its GDP by 4.1 percent, No. 6 in the country. Combined, the San Jose and San Francisco metro areas accounted for 8 percent of the national GDP growth from 2010 to 2015. According to Palo Alto-based Center for Continuing Study of the California Economy, the Bay Area’s GDP grew by 5.8 percent in 2015, outpacing both California (4.1 percent) and the U.S. (2.4 percent). In fact, all major California regions grew faster in 2015 that the nation in aggregate.
The Bay Area now ranks No. 18 in the world in terms of goods and services output, up from No. 21 in 2014. California improved its ranking too, climbing to the world’s sixth largest economy, with a 2015 GDP of $2.5 trillion.
A recent article in The New York Times sheds some light on what makes California special. In short, “California is the capital of American business.” One in five companies on the New York Stock Exchange and the Nasdaq are located in California. According to the author’s analysis: “From 1965 through 1979, 10.07 percent of public companies were based in California. The number has continued to grow, so that from 2000-13, 19.46 percent of public companies had their headquarters in California.” At the same time, California’s population increased from comprising 10 percent of the total U.S. population to 12 percent.
It helps that three of the five biggest companies in the U.S. are tech companies based in the Bay Area: Apple, Facebook, and Google. (Seattle-based Amazon.com and Microsoft round out the top five.)
The technology revolution has benefited other parts of the country as well. The fastest growing U.S. economies — including Raleigh, North Carolina; Austin, Texas; Portland, Oregon; and Denver — are also tech-heavy markets. The technology boom, however, seems to have benefited California relatively more than those other areas.
According to The New York Times, it appears that economies of agglomeration are driving the growth. In urban economics, economies of agglomeration are benefits obtained by firms locating close to each other and deriving economies of scale and network effects. In other words, interesting job opportunities draw people to a particular location where they interact with other interesting people and share and develop new ideas, and this transfer of knowledge benefits everyone.
And now with that accumulation of the talent, ideas, and entrepreneurship, California is poised to continue to lead the technology revolution and nurture a new crop of valuable companies. The challenge for the Golden State remains its prohibitive housing costs, as well as the share of residents who have not benefited from the economic activity and still live below the poverty level.
With the unexpected news that Angelina Jolie filed for divorce from Brad Pitt— legal documents cite irreconcilable differences but celebrity gossip juggernaut TMZ reports she became “fed up” with his pot smoking, concerned with his “anger problem,” and unhappy with his parenting methods — we thought we’d have a quick poke around the couple’s impressive international property portfolio.
In three separate transactions during the mid- to late-1990s Mister Pitt paid a total of $2.55 million for three contiguous properties in an affluent and celeb-soaked pocket of Los Angeles’s Los Feliz area. Giovanni Ribisi owns one of the neighboring properties and Rooney Mara owns a nearby home she scooped up in early 2015 for $2.9 million from Alexander Skarsgard. Subsequent to the Jolie-Pitt’s coupling the almost freakishly attractive pair added two more adjoining properties that combined cost $2,387,500. All together, according to property records and other online resources, the gated and, no doubt, heavily secured compound cost a total of $4,942,500 and encompasses 1.9 acres with at least four structures including a 1915 Craftsman that clocks in at 6,692-square-feet with six bedrooms and seven bathrooms.
In the latter days of 2006, not too long after they hooked up but almost eight years before their August 2014 wedding, the Jolie-Pitts splashed out $3.5 million for a 1930s masonry mansion in New Orleans’ famed French Quarter. In May 2015 they put the mansion up for sale at $6.5 million and the price plummeted to $5.65 million before it was taken off the market in mid-December. Listing details from the time show that in addition to a “Magnificently renovated” main house with elevator, Venetian plastered walls and a “gourmet kitchen” with “top of the line appliances,” the property has a two-story guesthouse with one bedroom and 1.5 bathrooms, a private and spacious courtyard with swimming pool, and off-street parking for two cars.
In 2008 the now erstwhile pair rented Chateau Miraval, a sprawling, multi-residence estate near the village of Correns in the south of France and they purchased the approximately 1,200-acre spread in 2012 from American businessman Tom Bove for a reported $60 million. Just over an hour by car north of Toulon and roughly 1.5 hours by car west of Cannes, the village-like compound has numerous structures, some of which date to the 18th-century. In addition to a main house that some reports sayhas 35 or more rooms there are several smaller cottages for guests and/or staff, a Romanesque chapel where the couple wed, and a recording studio . The property, which they bought from American businessman was once owned by French jazz pianist Jacques Loussier — where Pink Floyd, AC/DC, Muse and Sting have all been reported to have recorded. The property is has pine forests, olive groves, a private pond, and extensive organic vineyards along with indoor and outdoor swimming pools, spa and gym facilities, a professional-grade screening room, a video game arcade, a dirt bike course, and a couple of helicopter landing pads.
Miz Jolie, nominated for an Oscar in 2009 for “Changeling” and an Oscar winner in 2000 for “Girl Interrupted,” has owned a 1,232-square-foot apartment on a high floor of the elegant and architecturally distinguished Ansonia building on New York City’s Upper West Side since December of 1997 and in 2003 she bought a traditional home on almost 100 acres in Cambodia’s Battambang Province where she later bought about 12,000 acres of land she turned into a wildlife preserve. And, finally, in late 2000, shortly after Mister Pitt married his first wife Jennifer Aniston, the six-time Oscar nominated and one-time Oscar-winning actor paid an unknown amount for an 11.5 acre ocean-front compound along a rugged and otherwise unspoiled stretch of beach just outside of Santa Barbara, California.
Of course, this property gossip doesn’t know an apple from and apple cart so we really can’t say what will come of the Jolie-Pitt’s numerous properties but we assume without any inside intel that each will keep what they brought to their ten-plus year union and that Chateau Miraval and their New Orleans pied-a-terre will be sold off. We shall see, butter beans, we shall see.
HOUSEHOLD INCOME GROWTH SEES SIGNIFICANT ANNUAL GAIN
The average American worker got a much-needed monetary boost last year, though incomes have not yet returned to their prerecession highs.
Citing data from the U.S. Census Bureau, The Wall Street Journal reports that the median household income increased by 5.2 percent from 2014 to 2015 to $56,516. That’s the largest annual gain since 1967 but still 2.4 percent below the record high U.S. incomes of 1999. Incomes are 1.6 percent below their precession levels of 2007 and may surpass them next year at the current growth rate.
President John F. Kennedy and Jacqueline Kennedy Onassis vacationed at the home as part of their honeymoon.
Known as the Beverly Compound, the property includes a mansion previously owned by William Randolph Hearst and actress Marion Davies.PHOTO: LEONARD ROSS
A Beverly Hills estate once owned by William Randolph Hearst and featured in the movie “The Godfather” will list for $195 million—up 18% from its last formal listing price of $165 million in 2007.
The owner, Leonard Ross, an attorney and real-estate investor, is selling the Beverly Compound, a roughly 5-acre estate with six structures. Including the 50,000-square-foot 1927 Hearst property there is a total of about 28 bedrooms and 38 bathrooms. A subsection of the property, on about 4 acres and including the Hearst mansion, will also be available for $175 million.
The mansion was last officially on the market in 2007 for $165 million and was taken off of the market the next year. It has since been leased at a monthly rate of $600,000.
In addition to Mr. Hearst, the newspaper magnate, the mansion was later owned by actress Marion Davies. President John F. Kennedy andJacqueline Kennedy Onassis vacationed at the home as part of their honeymoon. Scenes in “The Godfather” were filmed in the home, as were scenes from “The Bodyguard.”
President John F. Kennedy and Jacqueline Kennedy Onassis vacationed at the home as part of their honeymoon.PHOTO: LEONARD ROSS
Mr. Ross bought the property about 40 years ago for less than $2 million as an investment property, he said. He added about 20,000 square feet during a 1990s renovation and said parts of the home have bullet-proof glass windows. (He has had many high-profile renters, including royalty, Mr. Ross said.)
The estate features a 725-foot-long driveway leading to the H-shaped mansion. There is a lighted tennis court, and two ponds that flow into a long pool. A roughly 6,600-square-foot seven-bedroom guest house has its own pool, and can be roughly doubled in size, Mr. Ross said.
Mr. Ross, 71, says he is selling because “he’s getting up there” in age.Mauricio Umansky of the Agency has the listing.
Millennials are increasingly active buyers and now represent about 50 percent of first-time buyers in the U.S. California’s affordability constraints hold back the first-time buyer share at 30 percent.
Minorities will also emerge as a hypergrowing demographic of homebuyers in the U.S. By 2020, minorities will account for all growth in homeownership.
Mortgage creditors will need to consider the changing face of homebuyers and accommodate their needs and cultural differences.
In San Francisco, the share of income spent on rent is 46 percent, up from 31 percent historically. The share of income spent on mortgage payments is 41 percent, up from 39 percent historically.
Affordability constraints are especially challenging for the bottom two-thirds of income levels, where a lack of supply is particularly problematic.
Income inequality has been increasing dramatically over time. The share of middle-income households nationally decreased from 65 percent in the 1970s to 40 percent today.
I recently attended the “Housing Renaissance” conference in San Diego. The event featured some of the smartest housing analysts in the country, and the following six major themes emerged in the discussions¹:
The Millennial Generation
Millennials are more educated than any generation before them, hence they carry large student debt, but their education allows them higher income-growth potential over their lifetime.
Student debt affects only those who didn’t actually finish school. If they had obtained a degree — even with student debt — the probability of homeownership has remained consistent over time.
The oldest millennials — who are now 34 — are 38 percent more likely to have a bachelor’s degree than previous generations. At the age of 34, 21 percent of baby boomers and 36 percent of Gen Xers had a B.A.
First-time buyers are rebounding strongly and now represent 50 percent of buyers. In California, the share of first-time buyers remains lower because of affordability constraints.
One important factor holding back homeownership rates among millennials is the decline in marriage rates. In 1980, 53 percent of those between age 20 and 36 were defined as currently married. Today, only 26 percent of the population age 20 to 36 are defined as currently married.
Millennials are now moving into age groups with higher headship rates, meaning they will start creating households at a higher rate than in the last few years.
TransUnion estimates that the market will see 12 to 16 million first-time buyers over the next five years.
Source: Joe Mellman, vice president, Financial Services, TransUnion.
But first-time buyers, which include both millennials and/or Gen-Xers, tend to purchase homes in noncoastal areas. Thirty-three percent of first-time buyers purchased homes in coastal areas, whereas 67 percent of millennials bought in noncoastal areas
Still, there will be continued interest in renting because the generation is so large and the youngest millennials are still only 20 years old.
One cautionary sign are apartment property prices in hot markets, which have surged well above previous peaks.
Minorities will account for the vast majority of net household growth over the next decade
However, whites are on average significantly older than Hispanics. In fact, a large share of the Hispanic population is beginning to enter the traditional homebuying age, and they will represent the majority of homebuyers in the future. Figure 2 illustrates the age distribution of the white and Hispanic populations. More than 80 percent of Hispanics are younger than 50 years of age.
Source:Mark Fleming, chief economist, First American
Housing is the primary source of wealth creation for the bottom 40 percent of the income distribution.
The U.S. homeownership rate has been falling for a number of reasons. The rate is a ratio of homeowners to households, and since there are more households being created than homeowners, the ratio is falling. Millennials are also marrying and having children later than previous generations.
However, interest in homeownership is not fading. The vast majority of households who currently do not own expect to own in the future. For persons between 30 and 39, about 14 percent expect to buy a home someday, and 17 percent expect to buy a home when they next move. For those under the age of 30, 28 percent expect to buy a home in the next move, and 33 percent expect to buy someday.
Homeownership differs vastly by race, which is partly due to income and wealth inequalities.
By the 2020s, minorities will account for all growth in homeownership.
Nevertheless, a rental surge is continuing: 59 percent of the 22 million new households that will form between 2010 and 2030 will rent rather than buy their homes. The housing market is not prepared for this, and therefore rents will likely continue to increase.
Some analysts are forecasting the U.S. homeownership rate to continue to drop from 65.1 percent in 2010 to 61.3 percent by 2030. A larger proportion of minority households who will become homeowners will be offset by an aging population, who will exit homeownership.
Given the high likelihood that the Democratic Party will win the upcoming presidential election, housing reform is most likely to remain in status quo. Democrats will focus on the following: preserving the 30-year, fixed rate mortgage; modernizing credit scoring; clarifying lending rules; expanding access to housing counseling; defending and strengthening the Fair Housing Act; and ensuring that regulators have the clear direction, resources, and authority to enforce those rules effectively. The party will also prevent predatory lending by defending the Consumer Financial Protection Bureau.
Affordability is a real concern in many parts of the country. However, when adjusted for mortgage rates, real home prices are still well below historic levels nationally, though not in California.
Nevertheless, real incomes are flat, especially for the lowest two-thirds of the income distribution, which is a serious concern for affordability.
Affordability constraints are especially striking in expensive markets. In San Francisco, the share of income spent on rent is 46 percent, and the share of income spent on mortgage payments is 41 percent. Historically, those shares were 31 percent and 41 percent, respectively. The highest-tier home-price segment grew fastest in the last recovery and has flattened out. But now, the bottom one-third of home values are appreciating at the fastest rates.
The charts below are adopted from a Zillow presentation and represent median home-value changes in San Francisco:
Source:Svenja Gudell, chief economist, Zillow
Annual home-price appreciation in San Francisco by price tiers:
Source:Svenja Gudell, chief economist, Zillow
Being able to afford a home in bottom one-third of home-price distribution for households with an income in the bottom one-third of income distribution is incredibly difficult. Figure 5 below shows that a household in San Francisco would need to spent almost 70 percent of its income on a mortgage payment.
Source:Svenja Gudell, chief economist, Zillow
Rental affordably for the same group of people is virtually impossible. A household in the bottom one-third of income distribution would need to spend 90 percent of its income on rent in San Francisco.
Source:Svenja Gudell, chief economist, Zillow
While the number of cost-burdened homeowners has fallen due to lower mortgage rates, the number of cost-burdened renters has reached a new high. Furthermore, high rents make it difficult to save for a down payment, which is a major impediment to purchasing a home for first-time buyers.
Income inequality has been increasing dramatically over time. The share of middle-income households nationally decreased from 65 percent in the 1970s to 40 percent today.
The affordability crisis is further exacerbated by persistent supply constraints. According to Laurie Goodman at the Urban Institute, the U.S. is currently undersupplied by 430,000 units annually. Inventory shortages are particularly acute for homes in the bottom- and middle-third price tiers of the market.
Source: Chris Herbert, managing director, Harvard Joint Center for Housing Studies
The Mortgage Market
There has been an increase in purchase applications from last year, with broad improvement by loan sizes.
Independent mortgage lenders continue to gain market share and accounted for 43 percent of the market in 2014. They accounted for 23 percent in 2007, and today the share is most likely even higher. Commercial bank share was down from 74 percent in 2007 to 52 percent in 2014.
The origination business remains tough due to cost overlays. In addition, production expenses increased from $5,800 in 2011 to $7,800 per transaction now, which is largely driven by increases in personnel expenses. Mortgages are also more time-consuming to underwrite, with servicing costs increasing from $59 in 2008 to $158 in 2014 for performing loans and from $482 in 2008 to $1,949 in 2014 for nonperforming loans.
Credit availability remains very tight.
Since minorities will account for all growth in homeownership, the mortgage industry must adjust credit access to account for differences in cultural preferences. For example, Hispanics mostly pay with cash and therefore lack credit histories. Minorities also often buy homes as multigenerational households, and income sources come from more than two people.
One of the challenges for potential homeowners is their ability to access credit markets, of which the first step is being credit “scoreable.” There are a large number of potential homeowners who are currently invisible based on an analysis by VantageScore, representing about 11 percent of the U.S. population and significantly more if one considers only the adult population.
According to new scoring developed by VantageScore, there are additional consumers that are not being included under conventional scoring methods. According to VantageScore’s new scoring system, there are addition 21 million consumers with scores between 500 and 580, 6 million additional consumers with scores between 580 and 620, and 7.6 million consumers with scores between 620 and 850.
BREAKING: The list of “America’s Best High Schools,” released Thursday by Newsweek, ranks the 500 best high schools in the country for 2016.
LARKSPUR, CA — Marin County’s Redwood High School was among 51 public high schools in California to make Newsweek’s 2016 list of “America’s Best High Schools,” which was released Thursday.
Among 500 high schools on the list, Tamalpais Union High School District’s Redwood High in Larkspur was ranked 81st.
The school rankings are borne of legitimate research. Newsweek, along with the analytics firm Westat, uses legitimate and objective measurements to put together its annual ranking of the country’s best high schools.
Newsweek looked at six measurements and weighted them to come up with a “college readiness index.” The rankings are meant to show how well high schools do at preparing students for college.
Those measurements and their weight are:
Holding power: 10 percent
Ratio of counselor/full-time equivalent to student enrollment: 10 percent
According to Newsweek, Redwood High has a college readiness score of 84.3; a graduation rate of 98.9; a college-bound rate of 95.1; a poverty rate of 5 percent; an SAT/ACT composite score of 62.8; and an AP/IB dual enrollment composite score of 78.3.
In all, 6,477 of the nation’s 15,819 public high schools met the criteria to be considered in Newsweek’s rankings. Newsweek used school performance data from the National Center for Education Statistics to narrow down the list of schools.
The top-ranking school in the state was Whitney (Gretchen) High School in Cerritos, which came in seventh nationwide. The school ranked the highest in California for 2015.
(7) Whitney (Gretchen) High School Cerritos
(18) Monta Vista High School Cupertino
(25) Northwood High School Irvine
(29) Lynbrook High School San Jose
(35) Cupertino High School Cupertino
(50) Palos Verdes Peninsula High School Rolling Hills Estates
(51) Oak Park High School Oak Park
(57) University High School Irvine
(69) Woodbridge High School Irvine
(74) Homestead High School Cupertino
(81) Redwood High School Larkspur
(83) Westview High School San Diego
(90) Leland High School San Jose
(100) Corona del Mar High School Newport Beach
(119) Westlake High School Westlake Village
(120) California High School San Ramon
(121) Monte Vista High School Danville
(124) Aragon San Mateo
(128) Diamond Bar High School Diamond Bar
(136) Classical Academy High School Escondido
(155) Dr. TJ Owens Gilroy Early College Academ Gilroy
(161) University High School Fresno
(164) Palisades Charter High School Pacific Palisades
(172) Yorba Linda High School Yorba Linda
(174) Palos Verdes High School Palos Verdes Estates
(200) Mira Loma High School Sacramento
(238) West High School Torrance
(245) Scotts Valley High School Scotts Valley
(252) Aliso Niguel High School Aliso Viejo
(253) Henry M. Gunn High School Palo Alto
(284) Nuview Bridge Early College High School Nuevo
(289) South High School Torrance
(295) Arnold O. Beckman High School Irvine
(303) Shasta High School Redding
(318) River Valley Charter School Lakeside
(321) Harbor Teacher Preparation Academy Wilmington
(323) Tesoro High School Las Flores
(326) Glendora High School Glendora
(331) Palo Alto High School Palo Alto
(333) Rio Americano High School Sacramento
(335) Trabuco Hills High School Mission Viejo
(346) Huntington Beach High School Huntington Beach
(352) Analy High School Sebastopol
(385) International Polytechnic High School Pomona
(393) Foothill Technology High School Ventura
(403) San Clemente High School San Clemente
(455) Walnut High School Walnut
(456) HighTech LA Van Nuys
(465) Maria Carrillo High School Santa Rosa
(475) Marina High School Huntington Beach
(494) William S. Hart High School Newhall
The best high school in America, according to the list, is Thomas Jefferson High School for Science and Technology in Alexandria, Virginia.
• Home sales slowed across the Bay Area from last year, but not uniformly.
• Slower sales are most evident for homes priced less than $1 million as a result of rising average sale prices over multiple years which moves inventory from below $1 million to the$1-to-$3 million category.
• Sales slowed above the $3 million price point due to affordability conditions and more discerning buyers.
• The slowing of luxury sales is mostly the result of worldwide economic uncertainty.
• The current market appears more balanced between buyers and sellers, with buyers taking longer to purchase and premiums less common.
• In the Bay Area, San Francisco activity slowed most notably, while adjacent “affordable” areas – Alameda, Contra Costa counties – showed continued strength in price appreciation.
The Bay Area housing market has indeed shifted in 2016 when compared with years before. Home sales activity has slackened, and price appreciation has leveled off, but the picture is not that simple. The differences in housing markets are notable across the regions and within price categories.
In July of this year, home sales were overall down 21 percent from last July in eight of nine Bay Area counties (excluding Solano). The drop in sales is evident across all counties and price points. The only segment of the market that saw a pickup in activity from last July was luxury homes priced at $3 million and above in Contra Costa County. However, even that change was only four units more than last year.
At the regional level, Alameda and Contra Costa counties both saw drops of about 20 percent in sales activity overall from last July, the largest deceases in the Bay Area. Nevertheless, home sales in both counties peaked last June and July, and thus the drop appears more notable.
The July sales could be an anomaly and partially explained by changes in school calendars compared with last summer. In most of the region’s school districts, the first day of school is a few days earlier this August and could have prompted families to take vacations sooner, thus slowing July sales activity. At this point, it is hard to tell how much impact those couple of days had on the housing market and whether sales will rebound in August.
Nevertheless, comparing sales activity for the first seven months of this year with last year’s numbers illustrates a slightly different picture. While overall sales volume is 8 percent lower, it largely fell for homes priced below $1 million and above $3 million. Sales of homes priced between $1 million and $3 million actually increased by 4 percent.
Overall sales are lower in all Bay Area counties, but not equally across all price segments. Sales in the most affordable price segment, homes priced up to $1 million, fell everywhere but that is also a function of lack of supply of affordable homes. Due to rapid price appreciation and absorption of the affordable segment of the market over the last few years, there is very little of that market segment left to discuss. In July, the inventory of homes priced below $1 million was 8 percent lower than last year, while the inventory of higher-priced segments rose by about 17 percent.
Changes in sales of homes priced anywhere above $1 million varied quite a bit throughout the region but were also dependent on the available inventory and price appreciation within the segments. The chart below illustrates year-to-date changes by county and price category. The chart clearly highlights that demand is still strong in what now appears to be the “affordable” category, meaning homes priced between $1 million and $3 million. Similarly, when looking only at July 2015 to 2016 changes in sales activity, that segment has shown the smallest drop in activity, 11 percent, compared to the 24 and 23 percent decline for the lowest- and highest- priced segments respectively.
July sales activity. At this point, it is hard to tell how much impact those couple of days had on the housing market and whether sales will rebound in August.
Other market indicators further suggest that the Bay Area housing market has reached a normalization level compared with previous years, though again San Francisco is showing the most notable slowdown. Chart 2 shows the change in the median number of days on the market. The luxury home segment is showing the largest changes from last July but also keep in mind that the areas with the biggest drops — Alameda and Napa counties — have relatively fewer luxury sales. In San Francisco and Santa Clara counties, where luxury sales are more prominent, homes at all price segments are taking relatively longer to sell than last July. Slowdown in the luxury segment has been evident since the start of the year as many worldwide economic and geopolitical trends have led to more caution among high-end buyers.
Furthermore, the share of listings that sold above the asking price has fallen almost uniformly across the Bay Area (Chart 3). Again, San Francisco has seen the most notable drop in homes selling at a premium, with the largest decrease in the luxury segment. Last July, more than 55 percent of listings sold at a premium, while only about 26 percent of listings did this July.
Alameda County is a bit of anomaly in this respect since only three luxury properties sold in July. Chart 3 also illustrates the change in the average premium paid (red line) from last July. San Francisco had the largest decrease in premium, 4 percentage points. In other words, premium last July averaged almost 18 percent in July 2015, while it averaged 14 percent in July of this year. It’s worth noting that all regions have seen a drop in average premium paid for properties that sold above list price.
Lastly, home price appreciation as well as absorption rates, both point to the same trend. Home price appreciation has slowed notably over the last year.
Chart 4 shows annual home price appreciation between July 2014 and July 2015 (in grey), and July 2015 and July 2016 (in orange). Appreciation slowed across the Bay Area except in Contra Costa County where it sped up at more than double the rate. In all other regions, and again particularly San Francisco, price gains slowed from double-digit percentage rates last year to single digits this year. Along with Contra Costa County, which appears to be a hotbed, San Mateo County is also continuing to appreciate at double digit rates and saw a 12 percent increase in home prices from last July.
All in all, the Bay Area housing market has reached an interesting turning point. While countywide trends diverge in some aspects, it is very clear that the frenzy experienced in the last couple of years has diminished and that the playing field between buyers and sellers has leveled.
San Francisco, which led the frenzy, has most certainly cooled. Nevertheless, the normalization is welcome, as it suggests that we are in a healthier market where home price increases are more sustainable and the game no longer favors one side. It is clear that demand for Bay Area real estate is still solid and that local homebuyers are looking for more affordable options.
Selma Hepp is Pacific Union’s Chief Economist and Vice President of Business Intelligence. Her previous positions include Chief Economist at Trulia, senior economist for the California Association of Realtors, and economist and manager of public policy and homeownership at the National Association of Realtors. She holds a Master of Arts in Economics from the State University of New York (SUNY), Buffalo, and a Ph.D. in Urban and Regional Planning and Design from the University of Maryland.
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The “Full House” home in San Francisco is about to be filled up.
The Lower Pacific Heights house at 1709 Broderick St. in San Francisco, which served as the exterior for the hit ABC DIS, +0.04% family show “Full House” and the recent “Fuller House” reboot on Netflix NFLX, -0.24% , just sold for $4 million after about two-and-a-half months on the market, according to Realtor.com.
The Italianate Victorian home, built in 1883, however didn’t sell for its listed price of $4.15 million, and it’s not a surprise to some real estate watchers, who say the sellers may have overestimated the appeal of the home amid increasingly softening luxury market in the City by the Bay.
“Many sellers suffer from the ‘endowment effect,’ which is thinking our possessions are worth more than they are in reality,” Realtor Wendy Flynn told Realtor.com. “This is especially true when sellers have a unique property,” she said.
And the neighborhood where the “Full House” home sits has seen prices fall 14.8% in the past year, Seattle-based Redfin said on July 21. Overall, prices for homes in San Francisco’s luxury market (which Redfin defines as the most expensive 5% of homes sold in the market) have now fallen two quarters in a row, down 11% from a year ago, Redfin said on Aug. 4 in a blog post as the East Bay city of Oakland becomes an option for buyers who have been priced out of San Francisco.
The three-story home, designed by Charles Lewis Hinkel, a prominent San Francisco home builder in the Pacific Heights and Western Addition neighborhoods, was last sold for $1.85 million in April 2006, according to Zillow.com. At the $4 million selling price, a 30-year mortgage (given a 20% down payment of $800,000 and a 30-year fixed rate of 3.92%) would be a monthly payment of about $19,000. In 1990, while the show was filming for ABC, the house sold for a mere $725,000, or $1.3 million in 2016 dollars.
The house includes a walk-out landscaped rear garden, three marble fireplaces, built-in bookshelves, stainless steel appliances and a wine cabinet that can fit over 100 bottles.
The median value for homes in Lower Pacific Heights is $1.17 million, though homes within a mile of the Broderick Street address have recently sold for between $3 million and $6 million and Zillow estimates that neighboring homes on the same street could sell for as much as $4.7 million.
You know what’s crazy? You can drive I-5 from the northernmost point of Washington down to the southernmost point of California in 21 hours. Which means in less than a day you could get to anywhere on the entire West Coast… except Alaska (WAY TO GO ALASKA). The question, though, is where should you get to? Well, consider these 16 places our answer.
We’re calling them the West Coast’s (except no, not you Alaska, STOP RUINING EVERYTHING) 16 most iconic road trips.
Distance from LA: 821 miles; 12hrs
Distance from PDX: 178 miles; 3hrs
Distance from SD: 939 miles; 14hrs
Distance from SEA: 329 miles; 6hrs
Distance from SF: 492 miles; 8hrs
Why it’s iconic: Bend’s unique nature rests in its Bio-Dome-like climate anomalies. It’s a town in Oregon’s high desert, but it’s also home to roaring rivers. It’s situated between forests and volcanic scree. And, as such, there’s something for everybody — whether you ski, mountain bike, white-water raft, climb, hike, or just sit around drinking beer (as it stands, it’s one of America’s best under-the-radar beer cities, home to the likes of Deschutes, Boneyard, and 10 Barrel). But what makes Bend an exceptional road-trip destination is, well, the roads that lead in, including paths that take you around the switchbacks of Mount Hood and one that takes you through thick forests with insane mountain and river views.
Distance from LA: 352 miles; 6hrs
Distance from PDX: 757 miles; 12hrs
Distance from SD: 462 miles; 8hrs 15min
Distance from SEA: 928 miles; 14hrs 36min
Distance from SF: 140 miles; 3hrs
Why it’s iconic: In this case, it’s not just the destination, but the trip itself: the drive to Big Sur is often called one of the best drives in the country, a zig-zag along the ocean that’s equal parts precarious and beautiful. Once you’re there, the gorgeousness continues: redwoods tower over cafes, hiking trails, and new-agey businesses, all imbued with an air of artsiness and Americana. Wanna stay in treehouse? They’ve got you covered. Prefer a yurt? They’ve got those, too.
The Columbia River Gorge
Distance from LA: 983 miles; 15hrs
Distance from PDX: 17 miles; 30 min
Distance from SD: 1,100 miles; 17hrs
Distance from SEA: 180 miles; 3hrs
Distance from SF: 654 miles; 10hrs
Why it’s iconic: Constituting one of the last legs of the Lewis & Clark expedition — the section they hit right before saying “fuck all this rain” and heading back east — the gorge houses incredible gems in damn near every inch of land protruding from the Columbia, both on the Washington and Oregon sides. Hiking trails throughout the scenic area reveal enough forested majesty to fuel a million Ewok adventures, with waterfalls popping up off the highway (Multnomah Falls is the most famous) and around bends in the trail. Rock climbing is a way of life, and the river offers both sandy beaches and some of the country’s best kite surfing. And if you want to just kick back and enjoy nature without doing anything, you can’t really beat Hood River, one of the best small beer towns in the country. And if you want to keep going and make L&C look like pussies, well, the river stretches all along the state, from the desert you didn’t realize Oregon has, all the way to the coast.
Distance from LA: 727 miles; 11hrs
Distance from PDX: 233 miles; 4hrs
Distance from SD: 845 miles; 13hrs
Distance from SEA: 405 miles; 7hrs
Distance from SF: 398 miles; 7hrs
Why it’s iconic: As far as gigantic holes in the ground go, Crater Lake is kind of the king, especially since it’s the deepest lake in America. The hole itself was caused by a collapsed volcano, so there are no rivers feeding it. Just ample snowfall. And hot damn if it isn’t one of the most gorgeous sights in the US — a crystal-clear pool with year-round hiking, great camping/lodges, and some of the best cliff-jumping in the country. Paired up with a gorgeous approach through South-Central Oregon, the sight of the lake feels like something out of Middle Earth, minus the excessive CGI and boring-ass endings. And that’s to say nothing about the Old Man of the Lake, a bobbing old tree that somehow hasn’t aged.
Distance from LA: 1,239 miles; 20hrs
Distance from PDX: 275 miles; 6hrs
Distance from SD: 1,358 miles; 22hrs
Distance from SEA: 103 miles; 4hrs
Distance from SF: 909 miles; 15hrs
Why it’s iconic: You’ll spend most of this road trip… on a boat(?!), cruising one of the world’s premier yachting destinations, the San Juan Islands, all thanks to Washington State’s ferries, which offer frequent service to this charming town on the archipelago’s largest, and titular, land mass. Once there, you can rent bicycles or kayaks, go whale watching, or dine at restaurants overlooking the quaint harbor. You can also drive to Roche Harbor at the northern tip of the island, a 130-year-old resort where Teddy Roosevelt once carried a big stick, and where today you can watch the sun set over the marina while eating fresh oysters from just down the coast. Pro tip: take the long way there, which involves a brief ferry ride to Whidbey Island, a stop in picturesque Langley, and a trip across the stunning Deception Pass bridge.
Distance from LA: 128 miles; 2hrs 15min
Distance from PDX: 1,080 miles; 15hrs
Distance from SD: 160 miles; 2hrs 45min
Distance from SEA: 1,249 miles; 19hrs
Distance from SF: 500 miles; 7hrs 30min
Why it’s iconic: Truth be told, even if you’re not on peyote, or magic mushrooms, or LSD (or all of the above), the desert is a magical place: the landscape is stark, the air is dry, the hikes are intense, and the vibe is anything-goes. If you’re out there, you may want to stay in the crazily themed Hicksville Trailer Palace, and you’ll definitely want to get a drink at Pappy & Harriets — one of our favorite bars in the state — then get some more drinks at any of these other great nearby watering holes.
Distance from LA: 952 miles; 16hrs
Distance from PDX: 98 miles; 2hrs
Distance from SD: 1,070 miles; 17hrs
Distance from SEA: 263 miles; 5hrs
Distance from SF: 623 miles; 11hrs
Why it’s iconic: Towering behind the Portland skyline like the Paramount Pictures mountain, Hood is renowned for its great, damn-near-year-round skiing, but the area’s National Forest sites are rife with greatness for all outdoor aficionados. Camping opportunities range from the resort comforts of Lost Lake, to rustic creek-side bivouacs, to rentable fire lookout towers. Hell, Timberline, in addition to housing the state’s most iconic bar, also endured Jack Nicholson at his most deranged — it was the site of the exterior shots for The Shining. Which is to say, whether you’re looking to ski, hike, swim, snowshoe, ride the Alpine slide, or just drive around looking at vistas, every turn around the endless bends of Mt. Hood offers something completely different.
North Lake Tahoe
Distance from LA: 500 miles; 7hrs 30min
Distance from PDX: 581 miles; 9hrs 30min
Distance from SD: 559 miles; 9hrs 15min
Distance from SEA: 752 miles; 12hrs 30min
Distance from SF: 199 miles; 3hrs 15min
Why it’s iconic: Tahoe’s like the Stefan’s Nightclub of Iconic Roadtrips, ’cause it has it all: ski slopes, boat rentals, camping, fishing, gambling, nightclubs, screaming babies in Mozart wigs, karaoke… Need a guide to the best stuff? We’ve got you covered. And covered some more. And, if you’re cheap, even more than that.
Olympic National Park
Distance from LA: 1,126 miles; 17hrs
Distance from PDX: 162 miles; 3hrs
Distance from SD: 1,124 miles; 19hrs
Distance from SEA: 112 miles; 2hrs
Distance from SF: 796 miles; 13hrs
Why it’s iconic: Stretching from snow-covered alpine mountains, through vast swaths of temperate rainforest, to the rocky Pacific coast, this park boasts almost a million square miles of rugged, almost roadless land, which’s perfect for almost any outdoor activity, from hiking/backpacking (or even mountain climbing) and whitewater rafting, to fishing and wildlife watching (ONP’s got everything from bears to whales). You can even ski and snowshoe in winter. Prefer indoor activities? That’s cool, ‘cause in addition to 16 campsites, the park’s got a historic lodge, natural hot springs surrounded by rustic cabins, and more.
The Oregon Coast Goonies tour
Distance from LA: 1,035 miles; 16hrs
Distance from PDX: 79 miles; 2hrs
Distance from SD: 1,154 miles; 18hrs
Distance from SEA: 199 miles; 4hrs
Distance from SF: 706 miles; 11hrs
Why it’s iconic: Basically every mile of the Oregon coast is gorgeous — an endless, often treacherous stretch of jagged cliffs, whales, fisheries, seafood shacks, clamming, cheese factories, and some of the best damned sunsets you’ll ever see. But our hearts still belong in Goonies country, the stretch between Cannon Beach and Astoria where you can get flashbacks to the time you and Chunk saw One-Eyed Willy’s boat sail out in front of that big rock (it’s called Haystack), hang out at the jail where the Fratellis escaped (it’s the Oregon Film Museum), and kick it on the rainy beach that housed the shack where Sloth ate his Rocky Road (it’s in Ecola State Park, which is also where Bodhi met the 50-year storm in Point Break). Both towns are incredible — Cannon Beach is a quaint little vacation town, while Astoria is a small fishing/shipping town with great restaurants, the Fort George Brewery, and incredible beaches. Oh, and Kindergarten Cop and Short Circuit were filmed there too. Every human owes themselves at least one Johnny Five pilgrimage.
La Quinta/PGA West
Distance from LA: 107 miles; 1hr 45min
Distance from PDX: 1,070 miles; 16hrs
Distance from SD: 139 miles; 2hrs 15min
Distance from SEA: 1,241 miles; 18hrs 30min
Distance from SF: 491 miles; 7hrs 15min
Why it’s iconic: It used to just be golf and old people. Not anymore: thanks to a huge influx of attention (and money) from the Coachella festival and an influx of developers, Palm Springs is a weekend destination for golfers and old people… and ravers! And live music fans! And hipsters! And drinkers! And hikers! Basically anyone who wants to get out for a few days. There’s a ton to do there — and, thankfully, we did all the best stuff FOR YOU. Because we’re good like that.
Distance from LA: 141 miles; 2hrs 45min
Distance from PDX: 914 miles; 13hrs 30min
Distance from SD: 251 miles; 4hrs 45min
Distance from SEA: 1,085 miles; 16hrs 15min
Distance from SF: 300 miles; 4hrs 30 min
Why it’s iconic: Not only did the movie Sideways screw merlot sales for, like, ever, but it made this quiet, Danish-themed tourist town into the wine-and-cheese-and-bachelor-party getaway for anyone from SoCal who didn’t want to make the drive to Napa. Must-stops include Anderson’s Pea House and The Hitching Post II, obviously, but taking a day and going on a wine tour is one of the most relaxing ways to get a little buzzed in all of California.
Distance from LA: 411 miles; 6hrs 30min
Distance from PDX: 617 miles; 9hrs 30min
Distance from SD: 529 miles; 8hrs 30min
Distance from SEA: 788 miles; 12hrs
Distance from SF: 45 miles; 1hr 15min
Why it’s iconic: If you like drinking wine, you’ll love drinking wine in Sonoma and Napa: there’s no West Coast region as synonymous with vines and grapes, and both counties are littered with great tasting towns (one of the reasons wine buses exist), from Yountville (French Laundry bonus, +2) and Healdsburg, to Calistoga (Solage bonus, +500) and Geyserville. If you don’t like drinking wine, 1) by the time your trip is over you probably will (free tasting rooms have a way of doing that to a person), and 2) there are thankfully a lot of great dive bars.
Distance from LA: 144 miles; 3hrs
Distance from PDX: 1,104 miles; 16hrs 30min
Distance from SD: 20 miles; 30min
Distance from SEA: 1,276 miles; 19hrs
Distance from SF: 522 miles; 8hrs 15min
Why it’s iconic: Make jokes about donkey shows all you want, but if you’re in LA or SD, and you’re bachelor partying or college partying or… just… uh… party partying, there’s no more iconic go-nuts location in driving distance that’s not Vegas. But boobs and revelry aren’t all Tijuana has to offer anymore: the dining scene there is getting crazy attention, with some of Mexico’s best chefs making the most delicious bites you’ll ever eat anywhere, plus there’s… a brewery scene now, too?
Distance from SF: 950 miles; 15hrs
Distance from LA: 1,227 miles; 19hrs
Distance from SD: 1,397 miles; 22hrs
Distance from PDX: 315 miles; 5hrs
Distance from SEA: 143 miles; 3hrs
Why It’s Iconic: Less than an hour north of the border is one of North America’s most cosmopolitan, and underrated, cities. It’s a place you’ve seen in countless movies and TV shows (most of which wanted you to believe they were set in Seattle), but it’s worth seeing in person, and not just for the spectacular scenery and impressive skyline. Can’t-miss attractions include a trip to Granville Island (get the fish & chips at the world glass farmers’ market); lunch/shopping on Robson St — followed by an afternoon in Stanley Park — then drinks/dinner in the historic Gastown neighborhood.
Yosemite National Park
Distance from LA: 281 miles; 5hrs
Distance from PDX: 719 miles; 11hrs
Distance from SD: 399 miles; 7hrs
Distance from SEA: 891 miles; 14hrs
Distance from SF: 164 miles; 4hrs
Best Iconic West Coast Road Trips – Thrillist
Why it’s iconic: There’s nothing that screams “America” in, uh, America like Ansel Adams’ photos of iconic Yosemite destinations like Half Dome and Glacier Point, and seeing it in person is the kind of thing that makes you be all, “Bro, I’m so glad I’m seeing this in person.” There’s no shortage of hikes in the summer (and snow activities in the winter); but it’s the smell of fresh wood, the sight of waterfalls, and run-ins with wildlife that’ll inspire even the most cynical road-tripper to actually acknowledge that, yeah, being outside is pretty damn good, sometimes. Also: if you’ve never stayed at The Ahwahnee, you’re doing something very, very wrong. Just ask James Franco.
Every Olympics has its stars and memorable takeaways and the Games in Rio de Janeiro, Brazil, will be no exception. The world will watch Michael Phelps attempt to swim to further glory, rightly claiming the title of Best Swimmer Ever. The Fastest Human Ever, Usain Bolt of Jamaica, will be the joining Phelps at theses Games. After an injury scare earlier this summer, Bolt announced that he would be competing, and sports enthusiasts around the globe sighed in relief.
That said, there are Olympic moments that transcend time and continue to resonate. Here are our top five:
A brash, young boxer by the name of Cassius Clay from Louisville, Kentucky, all of 18 years old, quite literally pounded the international competition to claim the gold in the light-heavyweight division. Thirty-six years later, in Atlanta, Mohammad Ali — then a 10-time heavyweight champion as well as an eloquent spokesman for civil and religious rights, now battling Parkinson’s Disease — took to the Olympic stage one more time to face perhaps his most daunting challenge. The applause thundered and eyes welled worldwide as, despite all odds, Mohammad Ali’s failing body and shaking hands lit the Olympic Torch.
In Rome, Ali also surpassed all athletes in the time-honored tradition of trading national pins. He loved nothing more than walking through the Olympic Village to meet people from around the world, proving that he was an ambassador before he knew he was one. Ali went home after the 1960 Games to encounter Jim Crow laws in his home state. Even after bringing honor to the U.S. with this Olympic gold, he couldn’t dine in the same restaurants with whites. That experience forged his tireless advocacy for his race, and next, his newly discovered Muslim religion, and also his vehement objection to the war in Vietnam. In the end, his support for all races and cultures was universal. He was a humanitarian.
We cannot close this sport chapter without acknowledging Ali’s oratory talents. His comments were genius, for example: “Hating people because of their color is wrong. And it doesn’t matter which color does the hating. It’s just plain wrong.”
Way back in 1976, one was hard-pressed not to see Bruce Jenner’s face peering off a magazine cover, not to mention a Wheatie’s cereal box, after his record-setting win in the Olympic decathlon. The victory came at the height of the Cold War. Russian Nikolay Avilov was the 1972 gold medalist, an event long dominated by the U.S. and such iconic athletes as Rafer Johnson, Bob Mathias and Jim Thorpe. Jenner won back the title for the U.S. and in doing so, ascended into the firmament of Olympic greatness.
Jenner didn’t just win the decathlon, he broke the previous Olympic mark. No, he didn’t just break the previous mark, he pretty much annihilated it, by 164 points. Jenner then jogged gloriously around Stade Olympique as his competitors, prone in utter exhaustion, littered the track after the event’s 10th competition, the 1,500-meter race. The winner of the Olympic decathlon is typically bestowed the title of “World’s Greatest Athlete.” On that day, Jenner claimed it as his own.
Forty years later, after a turn in reality TV, Jenner publically transformed into Caitlyn Jenner, becoming the most famous transgender woman in the world and another champion — one for the rights of the LGBT community.
These games were a supernova of Olympic star accomplishments – Mary Lou Retton’s All-Around Gymnastic Gold among the most notable – but no achievement shines brighter than Joan Benoit’s win in the first ever women’s Olympic marathon.
Women were finally given the opportunity to compete in the grueling 26.2-mile race, having been allowed to compete at the iconic New York Marathon since 1970. It was due time. Joan Benoit, small in stature but with the heart of a warrior, lined up with the rest of the field in gray uniform that looked a little too big and donning a quirky white cap. She had spent the time leading up to the trials recovering from knee surgery and relentlessly pedaling a stationary bike to keep in shape. It was almost unthinkable that she was in the field at all.
Benoit had begun to distance herself from the field by the first water station. The distance opened and soon television cameras couldn’t capture the leader and the field in the same frame. And still the distance opened, with Benoit, whose own mother described her as a little gray mouse, leaving the long-legged thoroughbreds in her wake. She won by more than four minutes. Four minutes? Enough time to enjoy a coffee and scan the newspaper. Second place went to Sweden’s Grete Waitz, widely considered among the best distance runners of her generation. Benoit’s field of competitors was world-class and she bested them all with grit and perseverance, thereby vaulting women’s running into the mainstream.
The U.S. Dream Team burst onto the scene in Spain, mounting a full court press of awe and athletic star power that continues to amaze. This was the first team of NBA players to compete in an Olympics following a rule change previously banning professionals on the Olympic basketball court. The motivation for the rule change was to up the level of Olympic play, and boy, these gods of hoops certainly dazzled.
The Dream Team still stands as the greatest sport team ever assembled in any sport. Superstars Michael Jordan, Larry Bird and Magic Johnson, who had just tested positive for HIV, formed the nucleus showcasing their competitiveness and wizardry at every turn. Add to that the thunder dunks of Charles Barkley and Karl Malone and the precision passing of John Stockton and opponents didn’t have a prayer – and few seemed to care.
Charles Barkley was a mainstay at the Olympic Village, much like Ali some 30 years prior. Like a gigantic Pied Piper, throngs of camera-toting fans followed him about and he achieved U.S. ambassador status by happily posing or providing autographs. There is a famous story, posted on the NBA website, of an opposing player in an early round guarding Magic and waving desperately at his teammates on the bench to get an action shot of the two of them. The Dream Team scored an average of 44 points over their opponents; rather than hanging their heads in defeat, the losing team only wanted autographs from the victors. At the medal ceremony, these seasoned pros with multiple NBA championship rings between them, jumped and laughed like giddy school kids, underscoring the power of the Olympic spirit and just how perfectly the game of basketball can be played when the world’s finest are assembled on one team.
It is hard to compete with an Olympiad that opened with the Queen Mother parachuting out of a chopper with Daniel Craig as the James Bond theme played, saw the Spice Girls reunited and then closed with Sir Paul McCartney singing “Hey, Jude.”
Athletes still commanded the spotlight. For the first time ever, at the London Games, Saudi Arabia, Qatar, and Brunei entered female athletes. Women’s boxing was included for the first time, distinguishing these Games as the first where females competed in all events. These were also the first Olympics where every participating country included female athletes. Quite a statement.
In London, Michael Phelps became the most decorated Olympic athlete of all time, earning his 22nd medal. The fastest human ever, Usain Bolt of Jamaica, gifted with a surname that captures his speed, amazed once again by claiming the gold at the 100, 200 and 4×100 meter relay. He became the first man in modern Olympics to win six gold medals in sprinting and win the 10 and 200-meter titles at consecutive Games. Both Phelps and Bolt are scheduled to compete in Rio so stay tuned.