Bay Area Real Estate Sales.com Newsletter

September 2005

 

IN THIS ISSUE:

 

Marin & San Francisco Home Sales Statistics

13 Extra Costs to be Aware of Before Buying a Home

In Wake of Hurricane, Mortgage Rates May Fall Further

NAHB Releases Study On Impact Of Katrina

Bathroom Interior Design

Pending Home Sales Index Slips, Remains High

Fast Facts

 

Marin & San Francisco Home Sales Statistics

 

According to the statistics below, the Marin real estate market overall trend still seems to be cooling, as 36% of all homes are currently in contract, as opposed to 40% last period and 46% the period before.  The market seems to have leaned towards a Buyers Market finally in the towns of Belvedere, Kentfield, Ross and Tiburon, but again, it's important to look at the whole picture which includes price range.  For example, homes priced under $1 Million are still considered to be in a "Sellers Market," and homes priced from $1M to $1.5M are considered to be in a "Balanced Market".  So even though you may have heard of inventory increasing, don't be looking for any bargains under $1.5M.  The overall Marin Market shows it to still be a "Sellers Market".

 

San Francisco has cooled slightly to become a "Sellers Market" (instead of a "Strong Sellers Market,") with an average of 45% of homes in contract as compared to 50% last period.; in fact, all homes priced under $1M are still considered to be in a "Sellers Market."

 

 

 

 

 

 

 

**''Based on information from Bay Area Real Estate Information Services, Inc. (BAREIS) and SFMLS 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

 

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13 Extra Costs to be Aware of Before Buying a Home

by: Mark Eibner

 

Whether you're looking to buy your first home, or trading up to a larger one, there are many costs - on top of the purchase price - that you must figure into your calculation of affordability. These extra fees, such as taxes and other additional costs, could surprise you with an unwanted financial nightmare on closing day if you're not informed and prepared.

 

Some of these costs are one-time fixed payments, while others represent an ongoing monthly or yearly commitment. Not all of these costs will apply in every situation; however it's better to know about them ahead of time so you can bud-get properly.

 

Remember, buying a home is a major milestone. Whether it's your first, second or tenth home, there are many important details to address, during the process. The last thing you need are unbudgeted financial obligations cropping up hours before you take possession of your new home.

 

Make sure you're budgeting properly for your next move:

 

1. Appraisal Fee

Your lending institution may request an appraisal of the property, which would be your responsibility to pay for. Appraisals can vary in price from approximately $175 -$ 300.

 

2. Property Taxes

Depending on your down payment, your lending institution may decide to include your property taxes in your monthly mortgage payments. If your property taxes are not added to your monthly payments, your lending institution may require annual proof that your taxes have been paid.

 

3. Survey Fee

When the home you purchase is a resale (vs. a new home), your lending institution may ask for an updated property survey. The cost for this survey can vary between $190 - $1,000.

 

4. Property Insurance

Home insurance covers the replacement value of your home (structure and contents). Your lending institution will request proof that you are insured as it protects their investment on the loan. Beware! Some homes may not be insurable. Make sure you have an insurability clause in your purchase contract.

 

5. Service Charges

Any new utility that services your hook up, such as telephone or cable, may require an installation fee.

 

6. Escrow and Document Preparation Fees

Escrow fees are split between the buyer and the seller in Colorado. However, additional fees will be charged for the buyer's mortgage closing. This can include first and second mortgages. In addition to the "Doc Prep" fees charged by the lender, some lenders will e mail the loan documents and therefore the escrow or title company may charge a electric to paper fee.

 

7. Mortgage Loan Insurance Fee

Depending upon the equity in your home, some mortgages require mortgage loan insurance. This type of insurance will cost you between 0.5% -3.5% of the total amount of the mortgage. Usually payments are made monthly in addition to your mortgage and tax payment.

 

8. Mortgage Brokers Fee

A mortgage broker is entitled to charge you a fee in order to source a lender and organize the financing. However, it pays to shop around because many mortgage brokers will provide their services free to you by having the lending institution absorb the cost.

 

9. Moving Costs

The cost for a professional mover can cost you in the range of:

$50-$100/hour for a van and 3 movers, and 10-20% higher during peak demand seasons.

 

10. Maintenance or HOA Fees

Condos charge monthly fees for common area maintenance such as grounds keeping and carpet cleaning in hallways. Costs will vary depending on the building.

 

11. Water Quality and Quality Certification

If the home you purchased is serviced by a well, you should consider having your water checked by your local experts. Depending upon where you live, determines whether or not a fee is charged, to certify the quantity and quality of the water.

 

12. Local Improvements

If the town, city or county you live in has made local improvements (such as the addition of sewers or sidewalks), this could impact a property's taxes by hundreds of dollars.

 

13. Metropolitan or Special Tax Districts

This is a unique tax district set up by the developer to finance all aspects of the physical infrastructure such as streets, sewer and even recreation centers or golf courses. The developer only has to put up a small percentage of monies for these costs and the rest are floated with bonds and added to the homeowners tax bills until paid off. The arrangement can work nicely when there are plenty of homebuyers to pick up the tax bill. But, in a down market, watch out...you could end up holding the bag when there is not enough buyers to fund the bonds.

 

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In Wake of Hurricane, Mortgage Rates May Fall Further

(September 2, 2005) --   Long-term mortgage rates dropped this week to their lowest point since mid-July, and they may fall even further due to concerns about high energy prices and the destruction from Hurricane Katrina, Freddie Mac reports.

The 30-year fixed-rate mortgage averaged 5.71 percent for the week ending Thursday, Sept. 1, down from the previous week's 5.77 percent. Last year at this time, the 30-year mortgage also stood at 5.77 percent.

Meanwhile, the average rate for a 15-year fixed-rate mortgage declined to 5.32 percent from 5.35 percent last week. One-year adjustable-rate mortgages edged down slightly to 4.48 percent from 4.56 percent, and five-year hybrid adjustable-rate mortgages averaged 5.30 percent this week, unchanged from last week.

"Market jitters about high energy costs and the spill over into other sectors of the economy have led to a decline in bond yields, which typically means lower mortgage rates," says Frank Nothaft, vice president and chief economist at Freddie Mac.

"As if all that wasn't enough, the devastation caused by Hurricane Katrina and the echo effects on future energy prices in the US may mean that mortgage rates will fall even further in the coming days ahead," he says.

-By Kelly Quigley for REALTOR® Magazine Online

 

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NAHB Releases Study On Impact Of Katrina

 

September 2, 2005 - Economists for the National Association of Home Builders (NAHB) today released the following report on how the destruction spawned by Hurricane Katrina could affect the price and supply of building materials. For further information, please contact Paul Lopez at (202) 266-8409 office.

 IMPACT OF HURRICANE KATRINA ON BUILDING MATERIALS AND PRICES

 

The full extent of the impact of Hurricane Katrina on the overall economy and on the housing market is still unclear, and the immediate focus is properly on human life and health, but the number of homes destroyed by this catastrophe is almost certain to dwarf the losses from any previous U.S. natural disaster.  Past experience, together with the visible devastation, provides some basis for projecting the effects on construction activity, the supply and cost of building materials and construction labor, and other implications for the housing market.

 

The number of housing units destroyed (made uninhabitable and beyond economically-justified repair) by Hurricane Andrew in 1992 was estimated at over 28,000.  The combined effect of Hurricanes Jeanne, Ivan, Frances, and Charley in 2004 was almost as large, with nearly 27,500 housing units destroyed, according to estimates compiled by the American Red Cross.  In those cases, most of the destruction was caused by winds or the immediate force of the storm surge.  The number of homes with major but reparable damage was more than twice the number destroyed.  The 1906 San Francisco earthquake/fire reportedly destroyed 28,000 "buildings."

 

Katrina also caused widespread immediate damage in Louisiana, Mississippi, and Alabama, but the flooding in New Orleans, Mobile, and elsewhere is likely to translate into much larger numbers of homes destroyed.  Although the floods generally did not tear off roofs or walls or cause structures to collapse, many homes will be permanently uninhabitable.  The flood waters carried contaminants that cannot easily be removed, and even if the water were clean, prolonged submersion would cause structures to be damaged beyond repair.  This is likely to be the fate of a large share of the more than 200,000 homes in the city of New Orleans.

 

Of necessity, rebuilding will have to wait.  The immediate need will be to clean up and repair damage to structures that are still viable.  The repair process will absorb much of the construction labor near the affected area and several key materials that would otherwise have been used to build new homes.  The materials that will be most affected include roofing and wood panels (plywood and OSB).  Demand for other materials, such as concrete, is likely to decline initially, as planned projects are cancelled or delayed during the initial recovery period.

 

The storm will have impacts on the supply of materials as well as demand.  The areas affected by the storm have a significant number of wood product facilities that may have been damaged or destroyed.  On the other hand, trees that have been blown down will need to be harvested on an accelerated basis, perhaps helping to lower wood product prices in the medium term.

 

Additionally, imports of building materials will be disrupted by the damage to port facilities.  New Orleans was the top destination for imports of cement and a number of other building materials into the U.S. in 2004.  Cement imports, in particular, involve the use of specialized terminal facilities.  The New Orleans and Mobile customs districts reported about 12 percent of national cement imports in 2004.

 

Congestion caused by diversion of shipping to other ports will also probably disrupt some supplies of materials, as will land transportation problems caused by damage to roads, rail, and reload centers.

 

From July 1992 to September 1992, largely as a consequence of Hurricane Andrew, the average price for plywood increased from about $222 per 1,000 square feet to $321, and the price of Southern pine framing lumber rose from $264 per 1,000 board feet to $308.  The hurricanes in 2004 did not trigger a similar increase, and prices actually fell during the relevant period, after soaring during the preceding year.  The combination of greater (partly speculative) demand and disrupted supply produced a spike in lumber and panel prices in the final days of August 2005.  With production already running at full capacity for wood panels, further increases for those products, as well as for roofing, are likely.

 

Although the loss of tens of thousands of homes implies increased demand for, and construction of, new homes, past experience has shown that there is no massive surge in home building in affected areas.  Replacing units destroyed by the storm will not begin for many months and will take place slowly, over a number of years. 

 

In Dade County (now called Miami-Dade), the number of residential permits was 9,026 or 7.8 percent of the state total in 1993, the year following Hurricane Andrew.  That share of the state was slightly lower than the county's 7.9 percent share in 1991.  By 1995, there was an increase to 14,718 or 12.0 percent of the state, but that number still wasn't much greater than what might have been expected if there hadn't been a hurricane.

 

The experience in other areas, such as Alameda County, Calif. following the 1991 fires and Charleston, S.C., after Hurricane Hugo in 1989, was similar.  Homes were rebuilt or replaced very slowly.

 

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Bathroom Interior Design

 by: Allan Wilson

 

Any advice or guide on the interior design of a bathroom should be based around one simple concept: keep it simple. Rooms inside of a home should have functional aspects, and if one room is designed for very specific functions, it is the bathroom. There have always been many jokes about the "throne" of a home, but the honest fact is that creating a visibly appealing and comfortable bathroom will inspire positive feelings to its users.

 

Hardware choices should be the primary concern when designing a bathroom. Faucets and spigots, as well as tubs and toilets, produced in a variety of shapes and materials can centerpiece a design. Open showers are currently popular with the younger upwardly- mobile crowd, and claw-foot bathtubs are almost always considered to be classic and attractive. Evaluate privacy issues first; don't put the toilet and tub too close together.

 

Is it a possibility to center your bathroom around a favorite theme? The answer is most certainly "yes." Keeping in mind that "less is more" while choosing a decoration pattern that will coordinate with the rest of the home will open many design possibilities. Finding a color or pattern inspiration from simple or small artwork may be the first step toward creating a bathroom masterpiece.

When designing a bathroom's tiling, take the time to shop around through different hardware, decoration and craft stores. The more expensive of the different types of tiles should have durability, aesthetic value, and a non-porous surface. It should be easily cleaned and sanitized, and it needs to install easily without any expensive or caustic glues or cements. Get creative also; all tile in bathrooms need not be made of porcelain.

 

After the design and production of a space-conscious and attractive bathroom have been completed, focus on decoration accessories to bring out personality and individualism. The bathroom is the most sacred room of any interior, and placing prized possessions on the walls or shelves is an interesting way to bless this special room. Use courageous ideas and do not be afraid to take chances, but above all: keep it simple.

 

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Pending Home Sales Index Slips, Remains High

WASHINGTON (September 1, 2005) - Pending home sales declined slightly but remain historically high, according to the National Association of Realtors®.

The Pending Home Sales Index,* based on data collected for July, slipped 1.0 percent to a reading of 125.1, but is 3.5 percent higher than July 2004.

The index, a leading indicator for the housing sector, is based on pending sales of existing homes. A sale is pending when the contract has been signed but the transaction has not closed; pending home sales typically close within one or two months of signing.

David Lereah, NAR's chief economist, said the level of the index is more important than minor shifts in direction. "The Pending Home Sales Index is at the fifth highest reading on record, meaning we can expect historically high home sales to continue in the months ahead," he said. "The index has been fluctuating in a fairly narrow range over the last six months - a very high range - so the overall market is moving forward with a lot of momentum."

An index of 100 is equal to the average level of contract activity during 2001, the first year to be analyzed. Coincidentally, 2001 was the first of four consecutive record years for existing-home sales. 2001 sales are fairly close to the higher level of home sales expected in the coming decade relative to the norms experienced in the mid-1990s. As such, an index of 100 coincides with a historically high level of home sales activity.

Regionally, the PHSI in the South rose 1.2 percent to record of 139.2 in July and was 8.3 percent higher than July 2004. The index in the West slipped 1.1 percent to a reading of 127.5, but was 4.7 higher than a year earlier. In the Midwest, the index declined 3.1 percent to 113.6, and was 2.5 percent below July 2004. The Northeast index fell 3.7 percent to 109.0 in July, and was 0.8 percent lower than a year ago.

The Pending Home Sales Index is based on a large national sample, representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 closely parallels the level of closed existing-home sales in the following two months.

-NAR

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Fast Facts

 

Calif. median home price - July 05: $540,900 (Source: C.A.R.)

Calif. affordability index - June 05: 16 percent (Source: C.A.R.)

Calif. highest median home price by C.A.R. region July 05:  Santa Barbara So. Coast $1,325,000 (Source: C.A.R.)

Calif. lowest median home price by C.A.R. region July 05:  High Desert $298,950 (Source: C.A.R.)

Mortgage rates - week ending 9/8:  (Source: Freddie Mac)

·          30-yr. fixed: 5.71%; Fees/points: 0.6%

·          15-yr. fixed: 5.30%; Fees/points: 0.5%

·          1-yr. adjustable: 4.48%; Fees/points: 0.7%

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Liz McCarthy

Real Estate Broker, e-PRO certified

Liz@BayAreaRealEstateSales.com

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