Bay Area Prices and Other Interesting Bits

If you're still interested in buying, but nervous about how much they've increased so far this year, take heart. Yes, they are generally higher than this time a year ago. But, home prices continue to rise beyond the reach of most Californians, according to a new report, with only 36 percent of residents able to afford a median-priced property in the second quarter of 2013 — down from 44 percent in the first quarter.
A closer look at the data, however, shows that homes today are still a bargain when compared with six years ago, when only 11 percent of California residents could afford to buy a house.
The latest affordability report from the California Association of Realtors reflects the robust rebound in housing markets across the state. The median home price was $415,770 in the second quarter, up from $350,000 in the first quarter, which pushed the minimum qualifying income to $79,910, from $66,800.
Monthly home payments, including taxes and insurance, were $2,000 in the second quarter, up from $1,670.
But take a look at the corresponding numbers in the second quarter of 2007: The median price of California homes set a record high of $592,420 that quarter, and residents needed a minimum qualifying income of $146,701 to afford such a home. Monthly payments were $3,668.
Affordability rates have been falling since the first quarter of 2012, when a record-high 56 percent of Californians could afford a median-priced home. The economy at that time was still struggling to recover from the recent recession, and the housing market was just beginning to show signs of improvement.
In the Bay Area, trends are also up, and in many cases less affordable than more rural areas of the state. In Marin, the affordability rate is 20%, low but still better than six years ago. What does this mean?
Well, intensify your search, or, if you've yet to begin, jump right in! Remember, even though prices are up and rates have begun to climb, it still is relatively inexpensive to have a mortgage with rates for 30 year fixed loans averaging in the low to mid fours. Also, although we're still suffering from less than normal levels of inventory, there is a higher number of homes on the market in most price ranges than this past spring. So you do have a better chance. Better move before someone else claims that dream home of yours! Call us for advice and you can soon host your own housewarming bash! Peter: (415) 279-6466; Jane: (415) 531-4091.
Now, for the "Other Bits":
Regardless what your interest in private time activities is, there's likely to be something here in Marin for you to take advantage of. Check out the following list for a start, and have a great day!

Camino Alto Hike: A great Mill Valley hike for anyone who wants a level grade with fantastic views. Dogs can run around off-leash, and there are no ticks at this elevation.
Address: Overhill Road and Escalon Drive, Mill Valley, Calif. 94941

Marin Youth Performers at 142 Throckmorton Theatre: The youth performances are a rare treasure for participating elementary through high-school students – and also for the audiences who attend.
Address: 142 Throckmorton Ave., Mill Valley, Calif. 94941

Mill Valley Fall Arts Festival: Enjoy great food and shop for unusual jewelry and clothing at the annual, kid-friendly, September event — all while raising money for the local schools.
Address: 294 Miller Ave., Mill Valley, Calif. 94941

Old Railroad Grade Trail Park: Start at the Mountain Home Inn and take in the beautiful vistas while hiking the trail before turning around (or grabbing a bite) at the West Point Inn.
Address: 810 Panoramic Highway, Mill Valley, Calif. 94941

Sea Trek Ocean Kayaking and Stand-Up Paddle Center: Rent a kayak or a paddleboard and get some exercise on the Bay (the stunning views are a bonus). Then paddle over to Bar Bocce for lunch.
Address: 85 Liberty Ship Way, Sausalito, Calif. 94965

Sunday Marin Farmers Market: Admire Frank Lloyd Wright’s Marin County Civic Center as you shop for locally grown produce, cheese, bread, and more at the third-largest farmers’ market in California.
Address: Marin County Civic Center, 10 Ave. of the Flags, San Rafael, Calif. 94903

Sweetwater Music Hall: It’s a small venue, so you get a real treat seeing top-tier bands up close. Don’t skip the restaurant – the food by Chef Gordon Drysdale is unbeatable.
Address: 19 Corte Madera Ave., Mill Valley, Calif. 94941

Tiburon Ferry: Enjoy the fresh air and views on a family-friendly ferry ride or a romantic sunset cruise from downtown Tiburon to Angel Island or the San Francisco Ferry Building.
Address: 21 Main St., Tiburon, Calif. 94920

Cash Is King (Increasingly)

Well, as I'm certain you've heard many times before, "Cash is king". This is becoming gthe case more and more frequently in the higher end of real estate transactions in the Bay Area, and especially in wealthier enclaves such as Marin.

All-cash offers were on the rise in the Bay Area in the first half of 2013, disappointing many would-be homebuyers who lost out repeatedly to deep-pocketed competitors with liquid assets galore.
“A lot of people have gotten so frustrated by being outbid by cash that they’re on the sidelines now,” said Rick Laws, branch executive of Pacific Union’s Sonoma County offices.
WHAT IS AN ALL-CASH OFFER?
When real estate professionals refer to an “all-cash offer,” they don’t usually mean the buyer showed up mafioso-style with a suitcase full of $100 bills.
“Their money’s wired in – they’ve got the money in the bank,” said Linda Carroll, branch executive for our Napa and St. Helena offices.
Most buyers who offer cash can do so because they’re simply wealthy or have just sold another property. But other types of homebuyers are using an arsenal of methods to scrape together the cash to win a bidding war – and then quickly obtain financing.
Some get a loan from a parent or friend. Others take out a line of credit on their current home, borrow against their stock portfolio or retirement account, or obtain a “bridge loan,” designed to help buyers afford a down payment on a new house before selling their old property.
A few will resort to borrowing from a “hard-money lender,” a practice many experts consider risky.
“We’ve met homebuyers pulling funds together from family members and other sources in order to get their offer accepted in multiple-offer situations,” said Sheila O’Neill, president of our mortgage affiliate.
Once the deal is in the bag, the homebuyer then refinances and pays back the debt.
Nonetheless, it’s important for buyers to work with a mortgage professional before the sale to make sure they qualify for financing – and secure all private loans against the home with a deed of trust to ensure better terms on the new mortgage, experts say.
WHY ARE CASH OFFERS SO ATTRACTIVE?
With mortgage rates hovering near historic lows, some would-be buyers may wonder whether it’s worth it to shell out hundreds of thousands of dollars in cash.
The reason cash offers usually prevail is because they’re more likely to close swiftly and without problems, compared with financed bids. That’s even truer in a competitive seller’s market, where multiple offers can push home prices over appraised values, prompting the lender to balk.
“If you have no loan, you have no appraisal,” said Brent Thomson, branch executive for our Marin County offices. “In multiple-bid situations, sometimes it’s tough for a property to appraise (at the sale price) because it’s going way over the asking price.”
Many eager buyers are seeing the advantages to offering all cash.
“In our Sonoma Valley region, all-cash deals accounted for a whopping 38 percent of second-quarter sales as of June 24,” said Jill Silvas, branch executive for our Sonoma Valley office. A full 35 percent of sales in Tahoe/Truckee were all cash as of June 25, followed by our Sonoma County region, where cash deals comprised 29 percent of transactions that closed between April 1 and June 27.

WHEN CASH DOESN’T WINOf course, sometimes a seller has reason to choose a financed offer over an all-cash bid.
Sonoma County, for example, has seen somewhat of a backlash against investors who snap up properties to flip them or rent them out at a profit, Laws said.
“I see an increasing number of people who don’t want to sell their home to an investor,” he noted. “They would rather sell to somebody who is going to live in their home and is a member of the community.”
And in second-home markets like our Tahoe/Truckee region, buyers are often highly qualified for a mortgage. That means financed offers can win out if they come in more than a couple of thousand dollars above a cash bid.
“People are very solid if they’re financing up here,” said Sally Gardner, branch executive for our Tahoe/Truckee offices. “If an all-cash offer is within $1,000 or $2,000 of a financed offer, the seller’s taking the cash offer. If it’s more than a $3,000 to $5,000 difference, I don’t think it really matters.”

HOW TO COMPETESo how can buyers unable to offer cash compete?
Many are waiving contingencies — including the appraisal contingency, writing “love letters” that describe why they want the home, or offering to let the owners stay put for several months rent-free.
And of course, finding the right real estate professional to represent you is always a shrewd move. In some cases they are privy to off-market sales, which can keep competition to a minimum, or may be able to plead your case with a seller’s agent.
“You have to get a really savvy agent who has good communication with other agents in the marketplace,” Laws said. “Find out what the seller wants, and try to structure your offer to give it to them.”
In any event, as the above indicates, there are times when being able to put all cash on the table can have a transaction-deciding affect.

Whether you're buying for all cash, or getting a loan, give us a call for our expertise in helping you get the home you want. Our numbers: Peter: (415) 279-6466; Jane; (415) 531-4091.