Friday, September 26, 2014

Interest Rates--Up or Not? What's Really Happening

Well, as many of you have likely heard over and over for the past year and change, interest rates in general--and mortgage rates in particular--were going to be heading up. Some experts predicted that by the end of 2014 mortgage rates would be at 5%, quite a bit higher than where they were last year. As you know, every time these rates climb, the cost to you of buying a home rises with them.  The house may cost a specific amount, but every penny you have to borrow to complete the purchase costs you more.  It's kind of like going to the grocery store--given today's supermarkets, that's a quaint notion--and on day 1 finding steak costs $8/pound; then returning for more steak on day 10 and finding the price has now gone up to $10/pound. Kind of spoils your apatite. Well, as the following information indicates, rates haven't gone up that far--in some cases had begun to do so and then dropped back down.
Good news for homebuyers: Interest rates for home loans continue to linger at historically low levels, extending a rare opportunity to get a mortgage at rates that can shave hundreds of thousands of dollars off payments over the life of the loan.Illustration of a house made of hundred-dollar bills
Bankers and economists last year had forecast mortgage rates to climb higher in 2014 and top 5 percent by the end of the year. But the reverse happened, and rates today on a 30-year mortgage are nearly one-half of a percentage point lower than where they stood a year earlier.
Today’s low rates give another chance at home ownership to Bay Area residents who were outbid on properties during the frenzied real estate scene of 2013 and early 2014.
Since then, the number of all-cash investors has dropped significantly and the supply of homes on the market has gradually expanded — both signaling new opportunities, especially for first-time buyers.
Freddie Mac reported late last week that 30-year fixed-rate mortgages averaged 4.12 percent, down from 4.57 percent last year at this time, and 15-year fixed-rate mortgages averaged 3.26 percent, down from 3.59 percent one year ago.
Surprisingly, mortgage rates aren’t too much higher than when they fell to a record low of 3.31 percent in November 2012. By comparison, mortgage rates averaged 7 to 9 percent in the 1990s and 10 percent in the ’80s.
Last year, Pacific Union explained how rising mortgage rates can add hundreds of thousands of dollars to total house payments over the life of a loan.
Even with increasing home prices, buyers who take advantage of today’s low mortgage rates can still find a bargain. But it’s a wise move to act fast. How long these low rates will linger is a question that even bankers and economists cannot reliably answer.
So, where will the mortgage rates go from here? Well, it is a safe bet that at some point, they will again begin to rise and possibly hit the 5% level.  The question is when and how quickly.  As to decisions about buying or refinancing your home, the current wisdom is to not waste too much time in getting your loan approved. Better to lock in today's rates than to wait for next year and find you cost yourself hundreds if not thousands of Dollars every month on your payments.
Need help in valuing your home or understanding what both the real estate and mortgage markets are doing? Call us! We can handle all of your needs from valuations of your home to finding your next one to getting connected with the best experts in the mortgage market. Peter: (415) 279-6466; Jane: (415) 531-4091.

Friday, September 19, 2014

Boomers Staying Put

It seems to be almost an article of faith that as the Boomer age group (those born after the end of World War II through 1964) are deciding more and more to move and down size as they age.  The logic put forth to explain this always seems to be quite logical.  There's just one thing--it may not be nearly as true as the idea's proponents would have you believe.

“There’s a perception, particularly in many media reports, that this massive generation born between 1946 and 1964 is altering its housing consumption,” said Fannie Mae researcher Patrick Simmons, in a recent interview in the Chicago Tribune.
“It’s true that they’re becoming empty nesters in droves,” Simmons said. “But by one measure, the proportion of boomers who live in single-family homes actually increased between 2006 and 2012.”
He noted that 90 percent of baby boomers in a recent AARP survey said they want to stay in their current home as long as possible.
Simmons is director of strategic planning for Fannie Mae’s economic group, and he said some boomers may be staying put because of the recent housing crisis, when the value of their single-family homes dropped by an average of 13 percent.
Some boomers could still be underwater and are waiting to recoup more on their house before they sell, he said. Others may be holding on to their home because they were able to get a record-low mortgage rate in recent years and they know borrowing won’t be any cheaper if they do decide to sell.
“Eventually, boomers will slow down with age and have the same physical frailties that their predecessors had,” he said. “My sense is that it’s not going to be a major shift, something we see in the numbers in a year. It will likely unfold over a decade or more.”
So, if you're a Boomer and someone tells you that you should move on--that "everyone in your age group" is doing so, don't feel obliged to pay them any attention.
However, if you'd like to update your knowledge of the local real estate market, or check out the value of your home, give us a call.  We'd be happy to advise.  Peter: (415) 279-6466; Jane: (415) 531-4091.

Thursday, September 18, 2014

Sales Slow in August; Marin Judged Best County in State

Two items of note today. First, the rate of sales in the area for the month of August. Every year August seems to slow down as fewer sales are closed. There are a number of reasons for this, and they seem to be consistent from year to year. However, every year someone takes note of it and tries to imply that the market is slowing down overall.  That is NOT the case.

Lest you think this is just a Marin phenomenon, it covers the whole Bay Area. 

A slim supply of available homes, high prices, and abnormalities in the mortgage market combined to constrict sales volume in August across the nine-county Bay Area, according to a recent CoreLogic DataQuick report.down_arrow
The company’s data shows that 7,578 Bay Area homes and condominiums sold in August, a year-over-year decline of 12 percent. Sales volume was down in every Bay Area county last month, ranging from 20.3 percent in San Francisco to 1.3 percent in San Mateo.
On an annual basis, the Bay Area median sales price rose just about as much as volume decreased: 12.4 percent, according to CoreLogic DataQuick. All local counties showed year-over-year price increases, from 19.1 percent in Alameda to 1.6 percent in Napa.
The median sales price across the nine-county region reached $607,000 in August, about $60,000 shy of its summer 2007 peak as measured by the company.
An additional reason for this yearly slowdown that the folks at DataQuick don't mention is the effects of summer vacations.  August seems to always be the month to suffer most from people being away on vacation. Usually, this effect disappears with the advent of the post-Labor Day return to normalcy in many parts of local lifestyles. Folks finish vacations; kids go back to school; everyone's back to business and they can all start to refocus on the major things in life--like buying and selling homes.


Those of us who live here in Marin know this fact, and have probably done so for as long as they have lived here. It's a great place to live! Good schools, great natural beauty, great median income level; excellent shopping--the list goes on and on.  This is why people in the business of telling the world where the best places to live like looking at Marin.

A recent study by online real estate portal Movoto underscores what we here in the Bay Area have always believed: Our region is the best place to live in California.
Using a combination of statistics – including low unemployment and poverty levels and high income and median home sales price – Movoto ranked Marin County as the state’s best. Beyond the numbers, the company pointed to Marin’s lifestyle perks, including its spectacular scenery and varied cultural offerings.
What more can I say?  Enjoy!

And if you have any questions on your home--or anything else about real estate here, call us! Peter: (415) 279-6466; Jane: (415) 531-4091.

Friday, September 12, 2014

Some Healthy News For Your Benefit

Those of you who follow this blog are quite familiar with the info I try to provide about various aspects of the real estate market. Occasionally, I go a bit farther afield when I see something interesting that I wish to share. Today is one of these 'field trips'. I hope you enjoy and benefit.
Eating healthy and exercising regularly are known to reduce the risk of a heart attack — we all know this. But here’s a heart-smart tip you probably never heard of before: People who know and trust their neighbors are less likely to suffer heart attacks.Heart
It’s true. A first-of-its-kind study, published last month in the Journal of Epidemiology and Community Health, found that the more social connections you have in your neighborhood, the less likely you are to have a heart attack.
The study, conducted by psychologists at University of Michigan, assessed the social connectedness of more than 5,000 adults in urban, suburban, and rural areas over a four-year period.
The participants were asked to rate their neighbors’ trustworthiness, reliability and friendliness, which is collectively known as neighborhood cohesion, using a seven-point scale. During the span of the study period, 148 of the participants had heart attacks, but those who gave the highest ratings for neighborhood cohesion were found to be less likely to have a heart attack.
“Each unit of increase in neighborhood social cohesion was associated with a 17 percent reduced risk of heart attacks,” the study’s lead author, Eric Kim, told a writer for The Atlantic magazine. “If you compare the people who had the most versus the least neighborhood social cohesion, they had a 67 percent reduced risk of heart attack.”
Past studies have focused on how negative factors in a neighborhood — such as density of fast-food outlets, violence, noise, and poor air quality — can impact health. For example, University of Pennsylvania researchers found that abandoned buildings in an area could lead to isolation and hamper social relationships and feelings of mutual trust, which also could lead to poor physical health of nearby residents.
And while you're sharing your good feelings with your neighbors, if there's anything you need to know about your housing or the market in general, please feel free to call at any time. We'd be pleased to help. Peter: (415) 279-6466; Jane: (415) 531-4091.

Friday, September 05, 2014

Pacific Union Again in Inc. Magazine 5000!

In business, there are a few lists that all companies strive to be named to every year. One of these is put out by Inc. Magazine, and lists the 5000 fastest growing firms in the nation. 
Pacific Union is happy to share the news that our firm has again been named to the Inc. 5000 list, which ranks the 5,000  fastest-growing companies in the U.S. based on revenue growth from 2010 to 2013. This marks the second consecutive year that Pacific Union has been included in the list, and our firm moved up in the overall rankings substantially.Inc5000
Pacific Union closed 2013 with $5.5 billion in sales volume, for a three-year growth rate of 141 percent. And for the second year in a row, Pacific Union was the only full-service Bay Area-based real estate brokerage to make the list.
In terms of overall three-year growth ranking, Pacific Union moved up the Inc. 5000 list nearly 800 spots from last year, to 2,663.
Between 2010 and 2013, we added 179 of Northern California’s top real estate professionals. Pacific Union closed 2013 with 646 real estate professionals, the most of any California-based firm in our sector named to the list.
The industry accolade is one of several that Pacific Union has earned thus far in 2014. In June, The Wall Street Journal and REAL Trends ranked seven of our real estate professionals among the top 250 in the U.S. for closed 2013 sales volume. And this past spring, REAL Trends 500 Report named our firm No. 3 in the country by average home sales price.
So, if there's a question which firm to use to help you buy or sell your property at any time, there can be ONLY one answer: PACIFIC UNION! It is this quality that is the chief reason that The Richmonds are affiliated with Pacific Union. We operate only to the highest standards in the purchase and sale of real estate, and so does PU. Cal us for any assistance you may need! We'll be glad to help, and you'll be glad you called! Peter: (415) 279-6466; Jane: (415) 531-4091.

Pricing Your Home: It's Not An Exact Science

When it comes time to sell your home, the most important question often is: what should I price it at? Well, even with the help of an expert--your Realtor--it's not an exact science!
Pricing a home for sale is an inexact science — some owners might call it a crapshoot — and determining the right asking price involves both psychological and practical reasons, according to a recent article in The Wall Street Journal.Dollar sign
An asking price is primarily a negotiating tactic, Michael Seiler, professor of real estate and finance at The College of William & Mary, told The Wall Street Journal. “When you set a list price, you’re sending a signal to the market.”
Mike McCann, a real estate professional in Philadelphia, said in the article that most sellers overestimate the value of their home, and some real estate professionals may start with a  price that’s too high to avoid hard feelings or to get the seller’s business. Or, they may price it too low for a quick sale.
Setting the right asking price depends on a variety of practical factors, such as the condition of the property and recent sales activity in the area, but pricing research offers a few tips:
Precise prices suggest you are inflexible. Setting an exact asking price — say, $795,475 — could lead buyers to believe that the price is not negotiable. A round number such as $800,000 can indicate that you’re willing to consider other offers.
A few dollars can make a big difference. Pricing a property at $499,900 rather than $500,000 can subconsciously influence a buyer. It seems to defy logic, but researchers say $499,900 is perceived as a huge bargain compared with a home priced just $100 more.
A low starting price can backfire. A lower asking price may net a flurry of offers, but it may not lead to a higher sales price. “It creates a havoc that doesn’t serve anyone well,” Rebecca Walter, a real estate professional in Portland, Ore., told The Wall Street Journal.
Pricing strategies only go so far, however. Ultimately, determining a home’s real value of requires knowledge of the local real estate market and access to recent sales data. That’s where the assistance of a local real estate professional can be most valuable.
Real estate professionals typically compile neighborhood sales data to prepare a comparative market analysis, which provides a sensible starting point for price negotiations. 
Seiler, the real estate professor mentioned in the article, said that without comparable sales data, “an appraiser will have no clue what a property is worth, and a buyer wouldn’t know either.”
One thing you can do to increase the likelihood that you've priced correctly is to hire a professional Realtor. Pricing a home to your best advantage is one of the things we know from years of experience. So, thinking of selling--or just interested in the value of your home? Give us a call! As always, we'd be happy to assist. Peter: (415) 279-6466; Jane: (415) 531-4091.