Bay Area Real Estate Sales.com Newsletter

January 2006

 

IN THIS ISSUE:

Where has Liz been?

Marin Home Sales Statistics

Soft Landing Projected for Current Record Housing Boom

Remodeling's Payoff

Home gain prices still expected to go up in 2006

Fast Facts

 

Where has Liz been?

 

Some of you may have noticed that I have not regularly sent out my newsletter the last few months.  In brief, I had a very difficult pregnancy which required months of bed-rest and then delivered my twin daughters 3 months pre-maturely on October 4th: Corinne Margaret was 1 lb 14 ounces and Kaitlyn Elizabeth was 1 lb 10 ounces.  Our surviving daughter, Kaitlyn Elizabeth, has been in the NICU for over 90 days and we are hoping that she will be coming home to us in the next month.

 

I am now back to work full-time and would be happy to help you with any of your Real-estate needs.  If you are thinking of buying or selling a home this year, now is the time to get the process started.

 

Marin Home Sales Statistics

 

Amid news headlines that the National housing Market is in a bubble, According to the statistics below, the overall Marin real estate market is considered to be a "Strong Buyers" market, as it was in December of last year..HOWEVER this statistic is for the overall AVERAGE Marin real estate market.  It is very important to look at the specific category of house that fits your home or home that you'd like to purchase.  For example, homes priced under $1,000,000 are still considered to be a "Balanced / Sellers Market".  Homes priced from $1M - $2M are in a "Buyers Market", and it's only the homes over $2M that are in the "Strong Buyers" Market.  So even though the overall average shows that Marin is in a "Strong Buyers" it is misleading due to the high-prices of homes in Marin.

 

Additionally, looking at different cities in Marin is also interesting: Corte Madera is still in a "Strong Sellers Market"; San Anselmo and San Rafael show a "Sellers Market"; Mill Valley is in a "Balanced Market" and Tiburon and Novato are both in a "Buyers Market."

 

Interest rates, although are now over 6% are still historically low.  The holiday season is usually a very slow period for listing of homes.  During this time last year (1/05) there were 458 homes on the market, as compared to 611 this year.

 

 

 

 

 

 

 

 

**''Based on information from Bay Area Real Estate Information Services, Inc. (BAREIS).   Information has not been verified, is not guaranteed, and is subject to change and is based on one period of time."

***Includes all: Sale Pending & Contingent properties

 

Back to top

 

Soft Landing Projected for Current Record Housing Boom
 by: Monte Helme

 

The five-year boom in existing and new housing sales in many U.S. housing markets is expected to cool in 2006 but final results should still be second best in history, according to projections by top industry economists. National average home price appreciation is also expected to slow from an unsustainable rate of 12.7% this year to about 5.0% next year.

 

Existing home sales, increasing 4.8% this year to a record 7.11 million, are projected to decline 3.5% to 6.86 million in 2006. New home sales will increase 8.0% to 1.3 million this year and are expected to decline 4.6% to 1.97 million next year.

 

"We are in the process of setting a fifth consecutive annual record for both existing and new home sales," said David Lereah, chief economist for the National Association of Realtors (NAR). "The market will be coming off a five-year boom and will experience a soft landing next year. An uptrend in mortgage interest rates will cause some slowing of the sales pace but we forecast 2006 to be the second highest year on record. Housing will continue to support the overall economy. The market is entering a period of transition in which we will see a somewhat slower but more sustainable pace of home sales. This will create a better balance between home buyers and sellers."

 

HouseHunt's national "Current Market Conditions" survey, taken in the third quarter of this year, is in concert with the latest industry projections. It found that the current housing market momentum is being fueled by unprecedented buyer demand, strong sales and price appreciation, strong job and population growth and relatively low mortgage rates.

 

The survey also found that its taking a bit longer for homes to sell and that the inventory of unsold homes appears to be building in all but the most active markets. Another significant indicator of market strength is that 80% of home sellers are getting 95-100% of asking prices.

 

Lereah noted: "Baby boomers remain in their peak earning years and their children, the echo boomers, are just entering the period of life when people typically buy their first home." His primary concerns about an otherwise rosy market outlook were the emergence of exotic, interest-only mortgage loans and the threat of the home mortgage interest deduction being eliminated or diluted by tax reform legislation in Congress.

 

FREE...You can search for Marin listings directly on BayAreaRealEstateSales.com:  Search for Homes

 

Remodeling's Payoff
-National Association of Realtors

 

The annual report compares construction costs with resale values in 58 markets.

 

To read the article go to:  http://www.realtor.org/rmomag.NSF/pages/feature1dec05

 

The "Cost vs. Value Report," published each year in conjunction with Remodeling magazine, gives you a city-by-city guide on what various home projects will pay back at resale. This year's report features data for five more markets than last year* and a new project-a mid-range home office remodel.

On a somber yet optimistic note, we included New Orleans' results, compiled before Hurricane Katrina, with the firm belief that in time the Big Easy's real estate market will once again be thriving.

Resale values ("cost recouped" in the tables) are aggregated from estimates provided by National Association of REALTORS® members. E-mail surveys containing construction costs and median home price data for each city were sent to more than 20,000 appraisers, brokers, and salespeople, yielding data from more than 1,600 respondents (an 8 percent response rate).

What do the numbers mean?

If some remodeling job cost figures appear too high or too low, one cause is the leveling effect of averaging. The demand for-and cost of-remodeling services can vary greatly within a given metro area.

Averaging also affects the value side of the equation. The amount recouped for an actual remodeling project depends on the condition of the rest of the house, as well as the value of similar homes nearby, the availability of new homes, and the rate at which property values are changing. Location in an urban, suburban, or rural setting will also affect a home's value.

In some cases, the value of the remodeling project at resale is more than 100 percent of its original cost. This usually happens in markets where property values are rising very rapidly, but it can also occur when buyers regard certain types of remodeling projects as "standard."

For example, in a neighborhood where most homes have an updated kitchen, remodeling a kitchen may well increase the resale value of the home beyond the cost of construction. In some cases, in fact, not redoing the kitchen could cause the home to sit on the market for much longer than normal and to eventually sell for less than similar homes in the area.

Keeping up with the Joneses can be a savvy investment move. But ultimately, the best reason for a remodel is to enjoy it.-Sal Alfano, editorial director of Remodeling magazine, and Christina Hoffmann Spira, managing editor of REALTOR® Magazine

Since 2002 four projects, reported each year since 2002, have shown the greatest return at resale on a national basis. Two of the projects, siding and windows, reflect the importance consumers place on curb appeal and insulation; the others, a kitchen and a bath project, are consistently high performers in most markets.

 

FREE...You can search for Marin listings directly on BayAreaRealEstateSales.com:  Search for Homes

 

Home gain prices still expected to go up in 2006

 

The level of inventories should cause home price gains to moderate from the currently strong pace to a more sustainable pace of about 5-6 percent next year -- about half the pace experienced this year, according to the Mortgage Bankers Association. With only a modest projected decline in home sales in 2006 and still-healthy home price appreciation, purchase originations should decline only modestly next year. With mortgage rates rising, however, refi originations will drop off significantly. 

 

Rising mortgage interest rates will not affect most homeowners in the U.S., according to the Mortgage Bankers Association. The trade group's research showed that 35% of homeowners own their homes outright; 50% have fixed rate loans, with many refinancing to get lower rates in the past few years; and 15% have adjustable rate loans. Eight percent of the latter homeowner group are high income earners. Therefore, the MBA concludes, only seven percent of all mortgages are rate sensitive!   The MBA research also found that only 12.5% of homeowners spend 50% of household income on housing. Only 33% spend just over 30%.

 

In the past 12 months, the U.S. population grew by 2.9 million persons. Between now and the year 2015, demand for new homes is on track to total as many as 20 million units annually. By 2030, there will be 80 million more people living in the U.S. As a result, our housing needs will require that an average of two million units per year is built but our record for building is 1.1 million. Currently there are 74.8 million homeowners in the U.S.

 

Finally, the MBA reported that no state in the U.S. has ever recorded a year-to-year decline in housing prices. Current national median price is $220,000, an increase of 15.8% over last year.

 

Fast Facts

 

Calif. median home price - Nov. 05: $548,400 (Source: C.A.R.)

Calif. affordability index - Oct. 05: 15 percent (Source: C.A.R.)

Calif. highest median home price by C.A.R. region Nov. 05:  Santa Barbara So. Coast $1,115,000 (Source: C.A.R.)

Calif. lowest median home price by C.A.R. region Nov. 05:  High Desert $320,860 (Source: C.A.R.)

 

Mortgage rates - week ending 1/5/06:  (Source: Freddie Mac)

·          30-yr. fixed: 6.21%; Fees/points: 0.5%

·          15-yr. fixed: 5.76%; Fees/points: 0.5%

·          1-yr. adjustable: 5.22%; Fees/points: 0.7%

FREE...You can search for Marin listings directly on BayAreaRealEstateSales.com:  Search for Homes

 

If you are thinking of selling your home, I would be more than happy to give you a free home evaluation report.  I also create property specific websites for all of my listings:  visit:  www.50Milland.com for an example

 

Be sure to check out all the other great content & features of my website:   www.BayAreaRealEstateSales.com

 

View the newsletter archives

 

The Bay Area Real Estate Newsletter is provided to you by:

 

Liz McCarthy

Real Estate Broker, e-PRO certified

Liz@BayAreaRealEstateSales.com

415-250-4929  (office)

415-250-4929 (cell)

60 Belvedere Drive

Mill Valley, CA  94941