Bay Area Real Estate Sales.com Newsletter

March 2005

 

In this Issue:

 

Marin & San Francisco Home Sales Statistics**

Bottom Line Guide to Major Home Repairs

Real Estate and the U.S. Economic Forecast for 2005

Home Sales to Stay in Record Territory

Freddie Mac: Mortgage Rates Highest in 7 Months

Fast Facts

 

Marin & San Francisco Home Sales Statistics**

 

The lack of inventory in Marin contributed to the lowest number of home sales since February 2003.  Condo sales were at their lowest since February 2001!  The resulting fight by buyers to try to "win the bidding war" resulted in sales price to list price ratio soaring to 101.4%, a level we haven't seen since March 2001.

 

 

 

 

 

 

 

**Charts represent information gathered from BAREIS and SFMLS at a specific point in time.

***Includes all: Sale Pending & Contingent properties

 

Back to top

 

Bottom Line Guide to Major Home Repairs

 

I thought this was an informative article on home repairs, but keep in mind the costs may be a bit dated, as it was written in 2001.

By: Dean Johnson, Hometime

Special from BottomLine/Personal http://www.bottomlinesecrets.com/  First Printed: May 1, 2001

For some of us, spring inspires a rebirth of the spirit, a reawakening of the senses and a renewed appreciation of the world around us.  For homeowners, spring usually inspires thoughts about major exterior renovations.

 

Bottom Line/Personal talked to construction expert Dean Johnson, host of the television show Hometime, about the three most daunting exterior home-remodeling projects...

 

ROOF

 

The most obvious sign that you need to replace a roof is a leak. But if the roof is leaking, you've already waited too long and there may be damaged wood underneath.

Signs a roof is nearing the end of its useful life and needs replacing...

 

·          Granular particles in your downspouts or gutters.

·          More than a few broken, damaged or missing roof shingles.

·          Edges of shingles starting to curl.

 

While you can often save money by installing a new roof over the old one, it is not recommended to have more than two layers of roof shingles on a house.

When replacing an asphalt-shingled roof, you do not have to use the same kind of roofing material. Asphalt shingles are about $200 per square installed (Each square is equal to a 10-x-10-foot area.) -- but they last only about 25 years at best. Because of the range of variables, roofing costs and warranties vary greatly. Here are some options...

 

·          Laminated shingles mimic the look of cedar shakes or slate. They are perhaps the best value -- at about $275 per square, some of which carry a 50-year warranty.

·          Copper shingles cost up to $1,000 per square.

·          Cedar or pine shakes -- also up to $1,000 per square.

·          Slate or tile may last hundreds of years but can cost $1,500 per square.  Warning: Not all roofs support slate or tile. To be certain, have an architect or engineer inspect the framing.

 

SIDING

 

If existing wood siding is in such disrepair that water is penetrating it -- which is evident if siding is cracked, split, broken or rotting -- it should be repaired or replaced. More commonly, wood siding is replaced because the homeowner is tired of painting it and wants a maintenance-free exterior.

 

Vinyl or aluminum siding only needs to be replaced if it is physically damaged.

It is possible to cover existing siding -- such as wood clapboard, cedar shakes and old asphalt shingles -- with new siding material. But removing the original siding allows a neater finish.  Removing the existing siding also makes it possible to improve a home's weatherization with the installation of either "house wrap" or insulating foam panels between the sheathing and the new siding material.

 

The most common replacement siding material today is vinyl. Because vinyl siding is intended to resemble wood lap siding, it is available in several profiles and a range of light to medium colors. Darker colors are not generally available because they tend to fade. The thickness of the vinyl is the key to its quality. The thicker it is, the longer it lasts -- and the more it costs. The vinyl sold at most home centers is usually 0.040" to 0.045" thick. Premium brands measure up to 0.055" thick.

Cost to re-side: $500 to $700 per square -- including the removal of old siding and installation of new. Vinyl siding for an average 2,000-square-foot, three-bedroom home should run between $10,000 and $14,000.

 

If you don't like the look of vinyl, fiber-cement siding is increasingly popular. Made from Portland cement, sand and cellulose, it comes in either shingle-shaped pieces or 12-foot planks. It is durable and resists moisture and insect damage. It requires painting. However, a paint job can last 10 years longer than it would on real wood.  Cost for fiber-cement siding: $50 to $100 per square, with a 50-year warranty.

 

WINDOWS

 

If you have old windows with one pane of glass in each sash, you will probably benefit from installing double-glazed replacement windows.  Double-glazing means that the window has two layers of glass with a space between them. This space is often filled with an inert gas, such as argon, to enhance the window's insulating qualities.

Most new windows have what is known as a "low-E coating." This reflects radiant heat and reduces ultraviolet rays, which can fade carpets and fabrics.

 

A good indicator of a window's tendency to conduct heat is expressed by what is known as the "U factor," a measurement determined by the National Fenestration Rating Council. The lower the U factor, the more insulating ability a window has. An acceptable window will have a U factor of 0.35 or lower.

 

Because the replacement window usually uses the existing frame, neither the interior woodwork nor the exterior trim has to be removed or modified.

 

Window frames can be made of wood, aluminum, vinyl, composite materials or a combination of any of the above.

 

·          Frames and sashes made entirely of wood have good insulating qualities and can be painted to match any exterior finish, but they need to be repainted every five to seven years.

·          Vinyl, vinyl-clad and composite windows all have good insulating qualities similar to wood. Unlike wood, they do not warp or rot in extreme weather conditions and do not need to be repainted.

·          All-aluminum windows are basically maintenance-free but lack the insulating qualities of wood and composite.

·          Aluminum-clad windows share the insulating qualities of wood and composites and the low maintenance of all-aluminum.

 

Window costs: "Economy" double-glazed vinyl windows are as low as $169 installed. Good-quality double-glazed windows are $225 to $275 installed. Top-of-the-line windows run $375 to $400.

 

JUDGING QUALITY

 

The manufacturer's warranty indicates the quality of the materials. A roof with a 25-year warranty is better than one with a 15-year warranty. Vinyl siding with a transferable lifetime limited warranty is likely to be better than siding with a shorter or nontransferable warranty. And windows with a 20-year limited warranty are probably better than those with a five- or 10-year warranty. The bottom line, though, is usually going to be the price.

 

 

Back to top

 

Real Estate and the US Economic Forecast for 2005

 

I thought this article on Real Estate and the US economic forecast was very informative.  So rather than write something myself this month, I'm reprinting it here.  It was written by Union Trust Mortgage Services.

 

Two icons in the mortgage and financial industries, Frank Nothaft, Chief Economist of Freddie Mac and Barry Habib, a noted financial analyst from CNBC have come together to offer their insights on areas that impact us all, including the economy, jobs, housing, oil and stocks, mortgage rates and home sales.

 

U.S. Economy:  Expect 2005 to be a solid year for our economy.  Contribution to growth will be a lower U.S. Dollar leading to increased corporate sales overseas, a continued favorable interest rate environment, increasing corporate earnings a strong stock market and strengthening  job market.  Frank Nothaft expects 2005 growth to be right in line with 2004, near 4% in growth.

 

Some pundits continue to fret about inflation.  Since the fed monitors inflation constantly, and inflation has not exceeded 6 percent in 21 years, we are not too worried about spiraling inflation.

 

Housing:  Housing is closely tied to local job markets.  California has suffered when unemployment rates have risen.  The last time California saw a decline in prices it was a 13% drop between 1990 and 1995, but that coincided with a 35% increase in unemployment during that exact period.  Many Californians have seen an increase of 13% in home prices during the last six months of 2004!

 

Barry Habib stated that it is common to hear the media push out headlines about a "housing bubble"  Those who believed the media rhetoric over the past few years are very sorry now because they missed out on significant gains   The double digit appreciation levels we have experienced in the past several years are expected to taper off over the next 7-010 years to a 5-7% national average. 

 

Mortgage rates:

Barry Habib predicts that mortgage rates will remain at current level though March, rising in the spring and closing the year around 6.75%.  Depending on the homebuyers length of time anticipated in their new home, hybrid ARMS 95,7 and 10 year fixed Adjustable Rate Mortgages) could act as a fixed rate loan.  The declining value of the dollar should not impact interest rates.  Expect the Adjustable Rate Mortgage share for purchase money activity to be 35-40% for the first half of the year.  Going into the second half and towards the end of the year, ARM share should be 33% as the yield curve tightens and the ARM products become a little more expensive as compared to fixed rate mortgages.

 

Barry senses the biggest wild cared in his mortgage rate forecast is the Fed Funds Rate movement.  We witnessed five Federal Funds rate hikes in the last half of 2004, and we can count on another five to six in 2005.  But still, tax cuts and the strong housing market should keep the U.S. economy and mortgage rates in good shape..

 

Back to top

 

Home Sales to Stay in Record Territory

(March 14, 2005) --   Both new- and existing-home sales will remain historically strong this year while the pace of price appreciation should ease, according to the NATIONAL ASSOCIATION OF REALTORS®.

 

Sales of existing-homes, including single-family, condo, and co-op, are expected to decline 3.2 percent to a total of 6.57 million* in 2005 from a record 6.78 million last year. New-home sales are seen at 1.13 million this year, 5.9 percent below a record of 1.20 million in 2004; the projections for both new- and existing-home sales in 2005 would be the second best on record. Housing starts are forecast to slip 0.7 percent to 1.94 million units in 2005.

David Lereah, NAR's chief economist, says home sales are starting to ease to more sustainable levels. "After setting four consecutive record years, the housing market is due for a breather," he says. "As mortgage interest rates creep up and home sales slow a bit, we should see a better balance between home buyers and sellers-that will take some of the pressure off of home prices."

Lereah expects the 30-year fixed-rate mortgage to gradually increase to 6.7 percent by the end of the year; for all of 2005 the rate should average 6.2 percent.

 

The national median existing-home price for all housing types should grow 5.6 percent this year to $195,500. The median new-home price is expected to rise 3.9 percent in 2005 to $228,300. Appreciation last year was 9.3 percent for all existing homes, and 12.6 percent for new homes.

"In January we set a record low for the supply of existing homes available for sale," says Al Mansell, NAR president and CEO of Coldwell Banker Residential Brokerage in Salt Lake City. "Until the market gets closer to equilibrium between homebuyers and sellers, prices will continue to rise faster than normal." Typically, home prices rise at the rate of inflation plus 1 to 2 percentage points.

Inflation should stay modest with the Consumer Price Index rising 2.6 percent in 2005. The U.S. gross domestic product is expected to grow 4.0 percent this year, while the unemployment rate should average 5.1 percent.

 

Inflation-adjusted disposable personal income is forecast to grow 3.8 percent in 2005, while the consumer confidence index should rise to 107 during the second half the year.

 

ore detailed information about NAR's economic outlook, as well as other analysis of real estate industry statistics, can be found in the March issue of NAR's Real Estate Outlook: Market Trends and Insights. The publication may be purchased online or by calling 800/874-6500.

 

Back to top

 

Freddie Mac: Mortgage Rates Highest in 7 Months

Rates on 30-year, fixed-rate mortgages this week rose to 6.01 percent - the highest since late July - according to a weekly, nationwide survey of mortgage rates by Freddie Mac, the mortgage giant. Last week, 30-year rates averaged 5.95 percent.

For 15-year, fixed-rate mortgages, a popular option for refinancing, the rate rose to 5.56 percent this week, up from 5.47 percent last week.

Back to top

 

Fast Facts

 

·Calif. median home price - Jan. 05: $485,700 (Source: C.A.R.)

·Calif. affordability index - Jan. 05: 18 percent (Source: C.A.R.)

·Calif. highest median home price by C.A.R. region - Jan. 05: St. Barbara So. Coast $1,206,250 (Source: C.A.R.)

·Calif. lowest median home price by C.A.R. region Jan. 05: High Desert $252,440 (Source: C.A.R.)

·Mortgage rates - week ending 3/24: (Source: Freddie Mac)
30-yr. fixed: 6.01%; Fees/points: 0.7%
15-yr. fixed: 5.56%; Fees/points: 0.7%

FREE.....Email Liz@BayAreaRealEstateSales.com or call (415) 380-2114 Liz and she'll send you a free Marin Information packet.  You can also search for Marin listings directly on BayAreaRealEstateSales.com:  Search for Homes

 

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

Click here to view previous newsletters