Bay Area Real Estate Sales.com Newsletter

September 2007

 

IN THIS ISSUE:

 

Marin Home Sales Statistics

Marin Home Sales Drop, But Median Price Is Up

What Did Your Neighbors’ House Sell For?

Fed Cut Rate – But What Does This Mean To You?

Cut Mortgage Payment In Half Upon Retirement

What Do Liz’s Clients Say?

Fast Facts

 

 

MARIN HOME SALES STATISTICS

 

As always, it’s important to view the individual city and price range stats – see the chart below for more details.

 

For the first time the overall Marin Home Sales market is in a “Strong Buyers” Market.

 

The median price for single-family, re-sale homes in Marin County rose 6.6% in August, compared to the month before, up 8% year-over-year. The average price rose 2.5%, up 14.2% year-over-year.

 

Sales of single-family homes were down 12.3% from July, and were off 26.4% year-over-year. Year-to-date, home sales are up 1.2%. Marin is the only county in the Bay Area with higher home sales this year than last.

 

The median price for condos fell 16.9% to $490,000, a year-over-year drop of 10.7%. The average price lost 6.4% to $633,204, up 6.4% compared to August 2006. Condo sales rose 2.2% from July, but were down 14.8% year-over-year. Year-to-date, condo sales are off 11.4%.

 

August is a vacation month and home sales typically are slower than in other months. The activity since Labor Day shows that buyer's are in the market.

 

As you can see from the summary numbers in the report, median prices rose but the number of units sold are down over 26% from the prior year. This is a sign of uncertainty. Many sellers have pulled their homes off the market and are waiting for the market to stabilize. Many buyers are having an issue with the increased mortgage rates and are waiting for the Fed to lower the discount rate. I will give everyone an update at the end of the month. As always, drop me an email with any questions or call me at 415-250-4929.

 

I’m always searching for ways to bring my clients and readers more local real estate statistics. I’m pleased to announce the launch of my new Marin home Sales Statistics page. To view, go to: Marin Real Estate Statistics.

 

If you know of anyone who would like to receive this monthly newsletter or is thinking of either buying or selling a home please let me know. I’d love your referrals!

 

 

 

 

 

 

 

**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

 

 

 

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

 

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MARIN HOME SALES DROP, BUT MEDIAN PRICE IS UP

 

Marin's median home price hit the $1 million mark again last month, but sales of homes slid more than 32 percent compared with this time last year, a real estate research firm reported Thursday.

 

August's median price for single-family homes rose 8.7 percent from August 2006, when the median price was $920,000. The median price for condominiums in Marin last month - $520,000 - dropped 4.8 percent from $546,500 in August 2006.

 

The rise in the median - which has hit the $1 million mark three times this year - combined with the decline in volume signals a stable luxury market making up for the lagging low end that has been most affected by the mortgage meltdown, analysts said.

 

Yet to fully play out is the impact tighter lending practices, including restrictions this summer on jumbo loans over $417,000, have had on markets such as Marin, DataQuick analyst Andrew LePage said.

 

In Marin, 76.9 percent of borrowers took out jumbo loans in August. In the last week of the month, that number dropped to 69.1 percent, LePage said. "You can say that the jumbo situation had some impact on sales," he said. "It was not a large one - it was noticeable in the last week of the month. What's unclear is if this is the beginning of a trend."

 

Bay Area homes sold at the slowest pace in 15 years last month as market uncertainty intensified, forcing more buyers, sellers and lenders to the sidelines. Prices remained flat at the regional level but there were local variations, a real estate information service reported.

 

A total of 7,299 new and resale houses and condos were sold in the nine-county Bay Area in August. That was down 1.7 percent from 7,423 in July, and down 24.9 percent from 9,713 for August a year ago, according to DataQuick Information Systems.

Sales have decreased on a year-over-year basis the last 31 months. Sales last month were the lowest for any August since 1992 when 6,688 homes were sold. The strongest August in DataQuick's statistics, which go back to 1988, was in 2004 when 13,940 homes were sold. The August average is 10,170.

 

"Homes in the Bay Area are more expensive than elsewhere and most of them are financed with 'jumbo' mortgages. The turbulence in the mortgage markets has made it more difficult to get this type of financing. The question is: does this pull the plug on some market activity, or does it just slow things down? We won't know the answer for a few months," said Marshall Prentice, DataQuick president.

 

The median price paid for a Bay Area home was $655,000 last month. That was down 1.5 percent from the June and July peak of $665,000, and up 4.0 percent from $630,000 for August a year ago. The median was down in Solano, Sonoma and Napa counties and flat or up in the other counties.

 

Foreclosure resales accounted for 4.8 percent of August's sales activity, up from 4.5 percent in July, and up from 1.2 percent in August of last year. Foreclosure resales do not yet have a regional effect on prices.

 

Other indicators of market distress continue to move in different directions. Financing with adjustable-rate mortgages is flat, financing with multiple mortgages has declined significantly. Down payment sizes are stable, flipping rates and non-owner occupied buying activity is flat, DataQuick reported.

 

Source: DQnews.com & Marin IJ

 

WHAT DID YOUR NEIGHBORS’ HOUSE SELL FOR?

 

Are you Curious to know what the Median home price is in your neighborhood?

 

The Neighborhood Homes Sold listing is a weekly reader feature of the Sunday San Francisco Chronicle. The data posted here is typically recorded a few months after the property officially sold. This is the public data available in the published tax records. The home addresses, sales price, number of bedrooms, square footage and the year the homes were built are based on information supplied from Bay Area counties' property transaction records which, in some cases, may not be complete.
Previous editions of Neighborhood Homes Sold

Click on the following links to see what price homes sold for in your neighborhood:

 

09/23/07 Sept 23 Marin Home Sales

09/16/07 Sept 16 Marin Home Sales

09/09/07 Sept 09 Marin Home Sales

09/02/07 Sept 2 Marin Home Sales

08/26/07 Aug 27 Marin Home Sales

08/19/07 Aug 19 Marin Home Sales

08/12/07 Aug 12 Marin Homes Sales

08/05/07 Aug 05 Marin Home Sales

07/29/07 July 29 Marin Home Sales

07/22/07 July 22 Marin Home Sales

 

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

 

 

FED CUT RATE – BUT WHAT DOES THIS MEAN TO YOU?

 

The long awaited Fed decision arrived with a bang! The Fed surprised many economists and traders with a half percent cut (to 4 ¾%) in both the Fed Funds and Discount Rates. Stocks soared higher and enjoyed their largest gain since 2003.

 

What does the Fed cut mean? Rates on consumer debt, car loans, and Home Equity lines will all benefit. But because Home Loan rates are tied more closely to inflation, it is not uncommon to see less of a reaction...or even an opposite reaction in mortgage rates.

The Fed cut also hurts rates of return on investments, which gives foreign investors less incentive to invest in US securities. This has sent the Dollar much lower against the currency of most major foreign countries. This makes foreign goods more expensive for us to buy, which adds to inflation pressures.

 

Overall, the Fed cut is good news for the economy, but may nudge inflation a bit higher.

 

 

CUT MORTGAGE PAYMENT IN HALF UPON RETIREMENT

by: Jack Guttentag

 

"I am 58 and just purchased the home in which my wife and I plan to spend the rest of our lives. We paid points to reduce the rate on a 30-year fixed-rate mortgage to 4.75 percent. I am feeling very insecure. The payment is affordable now, but I plan to retire in seven years and my income will drop. At that point, my property taxes will almost certainly be higher as well.

 

I fear that when I retire, the mortgage payment will become a major strain on my finances. I would like to get it down to about half of what it is now. What is the best way to do that? I have free assets equal to about half the loan balance."

Your free assets make it possible to eliminate your insecurity about a payment you can't afford. The issue is how best to use those assets.

Paying Down the Balance and Refinancing: Using your free assets to pay down the balance of your existing mortgage would shorten the term but not reduce the payment. You would have to refinance to get the payment down, which would mean replacing your 4.75 percent rate with a current market rate of at least 6 percent. That is inadvisable. You may have to give up the 4.75 percent rate when you retire, but there is no point in giving it up now.

 

Paying Down the Balance and Modifying the Loan: Some lenders, for a fee, will modify a loan contract. Because the rate on your mortgage is so low, it would be in the lender's interest to have the balance paid down, even if not completely. Assuming the lender is willing, you can use your free assets to pay down the balance and then modify the contract based on the new balance. This would allow you to retain the 4.75 percent rate on half of your loan.

 

If you pay off half the balance and the rate and term remain the same, the payment would fall by half as well. This would give you the peace of mind you are looking for.

However, there can be no assurance that the lender will be willing or able to modify the loan. Your mortgage could be sitting in a pool of mortgages that are the collateral for a mortgage security, in which case a modification would not be possible. Without the modification, there would be little point in paying down the balance.

 

Furthermore, it is probably a mistake to pay off any part of a 4.75 percent debt when risk-free investments are available at yields higher than that. Repaying debt is an investment that yields the interest rate on the debt. Since you can currently buy an insured 7-year certificate of deposit (CD) yielding at least 5.25 percent, you will be better off when you retire if you buy the CD rather than pay down the mortgage balance.

 

Sit Tight and Invest: I would use the spare cash to buy a CD that will mature about the time you retire. At that point you take stock of the market to plan your next move. If you can continue to earn more than 4.75 percent, you remain invested. On the other hand, if rates have come down to the point where you can no longer invest at a yield above 4.75 percent, you liquidate the CD, pay down the mortgage balance and refinance it to lower the payment.

 

The old maxim that you should have your mortgage paid off when you retire had a lot of merit for people whose wealth was largely in their home. For people with significant amounts of financial assets, however, the maxim needs revision. What matters is not the mortgage balance alone, but the balance relative to financial assets. Retiring with a $200,000 mortgage balance and $400,000 of financial assets is preferable to retiring with no mortgage and no assets.

 

BUT: Note that I recommended investing in an insured asset. Don't use the revised maxim as a license to gamble with your retirement, as a lot of market gunslingers would have you do. They would like you to do a cash-out refinance for the maximum amount possible, which they will arrange for you, and invest the proceeds in risky assets, which they will also arrange for you. They take theirs off the top, but whether it works for you depends on how well the investments do. It might work out or it might not, but if you are close to retirement, it is not a gamble I recommend.

 

WHAT DO LIZ’S CLIENTS SAY?

 

“I feel compelled to share our experience in home buying with Liz McCarthy as our real estate agent. Being a first-time homebuyer, I was new to the process, although my fiancé was not, and we both learned much from Liz along the way. First and foremost, Liz was in constant contact with us for the many weeks we were looking at homes. Her patience in explaining the intricacies of the process made all the difference. Liz clearly had our best interests at heart from the start and was able to gently and insightfully guide us to the homes on the market that not only fit our criteria but also possessed the attributes we weren’t necessarily attuned to, such as attractive school districts, good neighborhoods, strong resale value, clean inspection reports and comparative value.

 

We presented a significant challenge as buyers because we had not targeted a particular town or area to live. Therefore, we really relied upon Liz’s knowledge of the entire county when we were looking at homes. I said many times that it felt as if we were Liz’s only clients. The responsiveness and willingness to discuss our situation at all hours of the day and night was nothing short of amazing. Having her actively enthusiastic about our search helped us through the frustrations of home buying in a challenging market. In the end, Liz spotted our “dream home” that combined the best of all of the elements that we desired and communicated to her. When Liz first saw what was to be our home, she sent me a picture of the view from the kitchen into the amazing landscaped back yard from her cell phone, with an audio file describing what a great place it was. Then, she arranged for my fiancé and I to be the first to see the house a day prior to the official open house. When we walked inside, we knew that it was “it!” Liz then guided us through a multiple bid situation and within a week, we were in escrow and on Cloud 9!

 

In summary, I would highly recommend Liz McCarthy to anyone, whether you are buying or selling for the first time or you own more property than Donald Trump. You’ll benefit from her level of service and expertise and become yet one more happy client!”

-Anne Hastings, VP Client Relations, SF Giants & Mike Aguilar, Fireman, SFFD

 

If you would like to have Liz help you sell your Marin home or help you find a home, or you know of someone that could benefit from her services, just send her an email: liz@BayAreaRealEstateSales.com or give her a call: 415-250-4929

 

“High-Touch through High-Tech”: Did you know that Liz McCarthy is ePro Internet Certified by the National Association of Realtors and that 70 percent of home buyers today use the internet in their home search? Why are you still working with a Realtor who isn’t a technology expert?

 

What this means to you:

 

Home Buyers: Liz is an expert in helping save you time by using the internet, email and other technology resources to help save your valuable time and money. She knows how busy you are!

Home Sellers: Liz will hire a professional photographer and market your home extensively on the internet: a personal property website (see www.417Greenfield.com or www.50milland.com for samples), she will post your home on over 50 websites.

 

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FAST FACTS

 

Marin median SFR + condo price– Aug 07: $940,000 2006: $864,000 [Source: BAREIS]

Marin average SFR + condo price-: Aug 07: $1,239,000; 2006: $1,089,129 [Source: BAREIS]

Marin median SFR home price – Aug 07: $1,045 ,000; 2006: $956,000 [Source: BAREIS]

Marin median condo price – Aug 07: $490,000; 2006: $548,000 [Source: BAREIS]

 

Calif. median home price –July 07: $586,000 [Source: C.A.R.]

Calif. highest median home price July 07: Santa Barbara So. Coast $1,100,000 [Source: C.A.R.]

Calif. lowest median home price by C.A.R. region July 07: High Desert $296,000 [Source: C.A.R.]

Calif. First-time Buyer Affordability Index – 2^nd Quarter 07: 24 percent [Source: C.A.R.]

 

Mortgage rates - week ending 9/20/07: (Source: Freddie Mac)

·          30-yr. fixed: 6.34%; Fees/points: 0.5%

·          15-yr. fixed: 5.98%; Fees/points: 0.5%

·          1-yr. adjustable: 5.71%; Fees/points: 0.4% (as of 6/14/07)

 

FREE…..You can 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

 

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

 

Liz McCarthy

“High-Touch through “High-Tech”

Real Estate Broker, e-PRO certified

Vision Real Estate

Liz@BayAreaRealEstateSales.com

415-250-4929

 

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