Saturday, January 29, 2011

Luxury Home buyers

By PUI-WING TAM

The U.S. housing market may be weak, but many big spenders are still lavishing money on luxury homes in the Bay Area.

[THEVALLEY]

Homes selling for more than $2 million spiked in 2010 in the Bay Area, with the most pricey home sold in San Francisco for $15.5 million. Pui-Wing Tam talks with Stacey Delo.

.Across the nine-county region, sales of homes priced at $2 million or more soared in 2010 over 2009, according to a preliminary analysis by DataQuick Information Systems. The number of such sales reached 1,216 last year, up nearly 20% from 1,016 in 2009, said DataQuick. While that was still far below the levels of 2005 through 2008, when more than 1,500 such sales a year took place, it was also far stronger than in the early part of the decade when less than 1,000 such sales a year occurred.

And the numbers might be even higher than indicated. DataQuick, which culls its data from public records, said its numbers don't include the last week of 2010 and might not show all transactions priced above $2 million because some super high-end deals don't show up in the public record for long periods.

The strength of high-end Bay Area home sales last year underlines the region's recovery and how wealth here was relatively unaffected, compared with other parts of the nation. Indeed, over the past year, many technology companies have come roaring back, start-ups have started popping up all over Silicon Valley and San Francisco, and hiring wars have broken out.

Catherine Marcus, a Silicon Valley real-estate agent with Sotheby's International Realty, says the "market in the super high-end was great" in 2010, with competition intense for some luxury homes. In particular, some Facebook Inc. former employees cashed out of their private-company shares and wanted to buy homes, she says, along with buyers from tech companies like Google Inc., LinkedIn Corp. and Hewlett-Packard Co.

.Ms. Marcus adds that the mid-peninsula town of Atherton remained the most sought-after location for buyers. According to DataQuick, Atherton was the town with most sales priced above $5 million in 2010, with 20 such transactions. That was far above San Francisco, which was second with eight sales of $5 million plus in 2010.

The priciest Bay Area home transaction recorded in the public records in 2010 was for a two-story home in San Francisco's Pacific Heights neighborhood. In December, the home, which public record puts at nearly 7,400 square feet, was sold for $15.5 million to Hos Pacific LLC.

John Paul Hanna, a Palo Alto-based attorney for Hos Pacific, says his client wishes to remain anonymous but adds that the purchase is an indication that "there is beginning to be a turnaround, with other instances of homes selling for surprisingly high prices." He notes, "People are still looking for premium properties."

Write to Pui-Wing Tam at pui-wing.tam@wsj.com

Thursday, January 27, 2011

Protecting your deposits when you buy a home

Thursday, January 13, 2011

Housing market to improve in 2011? Looks promising

Good news from the Wall Street Journal:

By DAWN WOTAPKA And S. MITRA KALITA

ORLANDO, Fla.—Housing economists expect the troubled residential market to begin picking up in 2011, with low mortgage rates and bargain home prices boosting sales in the spring selling season.

The economists, who delivered their forecasts on a panel at the National Association of Home Builders' annual meeting here, noted the market remains extremely weak, prices are still falling, and they don't expect any recovery to be robust. But they said a number of recent economic indicators have convinced them that housing sales, which have stalled lately, could soon begin to recover.

The economy is creating new jobs, holiday sales came in better than expected, and sales of cars and furniture have improved, noted David Crowe, chief economist for the NAHB. Those trends, he said, are "signifying growing consumer confidence."

After years of abysmal construction and sales activity, Mr. Crowe expects builders to start construction on 575,000 single-family homes this year, up 21% from last year. That would still be far below the 2005 peak of 1.7 million housing starts.

The NAHB also expects new home sales to hit 405,000, up 26% from 2010, as buyers who delayed purchases ink deals.

To be sure, the outlook for 2010 at last year's conference proved much too optimistic. At that time, the NAHB economist saw 610,000 single-family starts for 2010. The actual count, which isn't yet final, is expected to come in at 475,000.

But Mr. Crowe says this year will be better as more jobs are filled and more buyers leave the sidelines. "Consumers are finally willing to go forward," he said.

The outlook for home prices is less upbeat. Freddie Mac Chief Economist Frank Nothaft expects home prices to bottom in the first half of this year, and mortgage rates to edge up slightly, ending 2011 closer to 5.25%.

David Berson, chief economist of mortgage insurer PMI Group, believes prices will weaken further in the next few months, but end the year flat. Next year, he said in an interview, pricing will increase slightly.

It won't be until 2013 that there will be long-term sustainable gains at the historical average rate of 3.5%-4%, he said. Mr. Berson missed the panel as a result of weather-related travel problems, but provided his outlook in a phone interview.

Many of the 50,000 attendees at this year's builders conference are also cautiously optimistic, hoping that prices have come down far enough to pull buyers off the fence.

"People now have waited long enough and are tired of waiting," said Don Eyler, owner of E+R Construction in Indiana. "Right now, you can build a house for the same price as an existing one in some places."

Other builders questioned whether they would be in a position to benefit when any upturn occurs. "I've been a builder for 44 years," said Richard Jenkins, owner of R.J. Builders in Terre Haute, Ind. "Indiana has little dips and little valleys, but I've never seen anything like this before. In 1982, you could borrow money. You just had to pay the price for it. Now, you can't."

Wednesday, January 12, 2011

San Diego - #7 most searched US cities on Realtor.com

The 10 Most Searched Cities on Realtor.com in 2010

Sponsored By

Potential buyers want to see properties in the sunshine states

The No. 1 most searched city on Realtor.com in 2010? Vegas, baby.

You know what homebuyers want as a counterbalance to an ongoing gloomy economic forecast? A healthy dose of looking at real estate where the sun does shine.

At least that's according to Realtor.com, which finds that the 10 most searched real estate markets in 2010 were primarily in the sunshine states of Nevada, California, Florida, Texas and Arizona.

Las Vegas, Nevada Leading the pack in interest was Las Vegas, Nevada. Known as "Sin City" or the "Entertainment Capital of the World," Las Vegas is a place to take a chance for homebuyers. It has world-class resorts and restaurants, entertainment and, of course, gambling and quickie weddings. With all it has to offer, it comes as no surprise that Las Vegas is such an appealing city for people looking for bargains.

What can you get for $200,000 in Las Vegas? This 4-bedroom, 3-bath home is 3,132 square feet. The two-story property has a breakfast nook and counter, granite countertops and a kitchen island, as well as a vaulted ceiling in the living room, and walk-in closets.

Los Angeles, California Following in Las Vegas' heels was Los Angeles with its temperate climate, swaying palm trees, swimming pools and movie stars. The nation's second largest city is a premioer vacation destination and is also home to the entertainment industry with motion pictures, television and music forming a core part of the region's economy. Potential residents are also attracted by the city’s notable universities, science, technology and international trade opportunities.

Take a look at this charming 3-bed, 2-bath Los Angeles property listed for $269,000. This Spanish-style home has an updated roof, heating, electrical and copper plumbing, and features a formal dining room, custom cabinets and a master suite.

Orlando, Florida Checking in at No. 3 is Orlando, a huge destination spot for families because of the Walt Disney World Resort, Universal Orlando Resort, and SeaWorld. Orlando is home to the University of Central Florida, Florida’s largest university.

Look at this 3-bed, 2.5-bath Orlando, FL listing for $209,900 (pictured above). The home is 2,097 square feet and features a swimming pool, and access to community golf, racquetball and tennis courts

San Antonio, Texas San Antonio is the second largest city in Texas and the seventh largest city in the U.S., and is known as the center for Tejano culture and Texas tourism. Major landmarks include Spanish missions, the Alamo and the River Walk, as well as SeaWorld and the Six Flags Fiesta Texas theme park.

If you’re interested in living in San Antonio, take a look at this 4-bedroom, 3-bath property listed for $269,995. Its 3,314 square feet of living space includes a kitchen with a walk-in pantry, a game room/media room, and a two-car garage. There’s also a beautiful in-ground pool.

Miami, Florida Miami is a major global city, and is a center for media, fashion, finance, and international trade. The “cruise capital of the world,” Miami is also known for its happening night life, music and Cuban cultural influences.

In the market for a Miami home? This 3-bedroom, 2-bath property is priced at $215,000 and features a charming entryway, garden views and vaulted ceilings.

Phoenix, Arizona Phoenix, the capital city of Arizona, is known for its year-round heat. Phoenix is a center of political culture, and is known as the home of major figures including Barry Goldwater, William Rehnquist, John McCain, Janet Napolitano, Carl Hayden, and Sandra Day O’Connor.

This Phoenix property is 3 bedrooms, 2.5 baths and listed for $259,900. The property has stainless appliances, hardwood flooring, and new stucco, paint and carpets. There’s also a pool and spa.

San Diego, California San Diego is a top vacation spot, home to Sea World, the world famous San Diego Zoo and the Wild Animal Park. The city is also known for manufacturing, agriculture, and defense (as the location of Camp Pendleton and one of the largest naval centers in the world).

Check out this 3-bedroom, 2-bath San Diego home listed for $270,000. The 1,423-square foot property has a swimming pool and a two-car garage, and is within a mile of several area elementary schools.

Austin, Texas Austin is the capital of Texas and home to the University of Texas. The city is home to development centers for many technology corporations. The current official slogan promotes Austin as “The Live Music Capital of the World”, a reference to the many musicians and live music venues within the area. In recent years, many Austin-ites have also adopted the unofficial slogan “Keep Austin Weird”; this refers partly to the eclectic and liberal lifestyle of many Austin residents but is also the slogan for a campaign to preserve smaller local businesses.

Searching for a property in Austin? This 3-bedroom, 2.5-bath home is listed for $205,000. Community features include a jogging/biking path, pool, and playground. The home is on about 0.16 acres, and is on a beautiful corner lot.

Chicago, Illinois On to the least sunny city on our list. Known as the “Windy City” or the “Second City,” Chicago is a major industry hub of the U.S. The city is where President Barack Obama first made his mark, and is a center of politics.

Take a look at this 4-bedroom, 2.5-bath unit in Chicago listed for $270,000. Close to the University of Chicago and Lake Shore Drive, this home has stainless steel appliances, cherry cabinets and lots of storage space.

Tampa, Florida Tampa is known for its more than 165 parks and beaches, and for a variety of entertainment attractions including Busch Gardens Tampa Bay, Adventure Island, Lowry Park Zoo, and Florida Aquarium. The city is justifiably proud of its sports teams including the Tampa Bay Rays, which went to the World Series in 2008 only to lose to the Philadephia Phillies; the Tampa Bay Buccaneers, which won the Super Bowl at the end of the 2002 season, and the Tampa Bay Lightning, which won the Stanley Cup in the 2003-2004 season.

This 4-bedroom, 2.5-bath Tampa home is in the Westwood Lakes neighborhood, and has vaulted ceilings, a spacious family room and a master suite. There’s also a loft/bonus room and a large backyard.

Other searched for markets that didn't consistently make the top 10 were Fort Worth, Texas; Paradise Valley, Arizona; and Beverly Hills, California.

Although the economy went through a host of ups and downs, consumers were interested in looking at these real estate markets. Early in 2010, the country experienced an increase in home sales and prices because of the federal homebuyer tax credit for both first-time homebuyers and repeat buyers. When the credit expires in April, home sales decreased and the trend continued through the summer and fall. Sales and foreclosure trends in each market led to fluctuations in list prices throughout the year.

Monday, January 10, 2011

San Diego Market Summary for the week of January 10th

Friday, January 7, 2011

Rent vs. own ratio to flip in 2011?

Many Americans are content to rent after witnessing the crumbling housing market in recent years. But with rents on the rise and home prices continuing to fall, a reversal is in sight.

It wasn't hard for many homeowners to bid adieu to 2010. It was the year where, in many metropolitan areas across the country, rents surged as home prices fell, leading a growing chorus of skeptics to question the so-calledAmerican Dream of homeownership.

Perhaps not surprisingly, it makes more financial sense to rent than buy today in many U.S. cities, according to the latest data from Moody's Analytics. After declining during the depths of the latest recession, prices for rentals nationwide increased modestly by about 3% in 2010, partly driven by a record number of homeowners looking for new digs after foreclosing on their homes. In Moody's latest list of rent ratios (which is the price of a typical home divided by the annual cost of renting that home) for 54 U.S. metropolitan areas, 39 fell into the 'better to rent' category -- roughly the same level it's been for the past year.

But that may finally be about to change. Moody's chief economist Mark Zandi expects the trend to reverse this year in many major cities. This would be a positive development, as a healthy housing market typically puts renting and owning at more equal footing.

"By mid 2011 and certainly by end of 2011, buying will be superior to renting in most parts of the country," Zandi says.

A few factors will be at play. For one, home prices are expected to fall further, with some economists expecting a 15% to 30% drop this year. This might be bad news for household finances and current homeowners fearing that their most prized asset stands to lose more in value. On the flip side, this makes homes more affordable and might finally spur more home sales, especially at a time when the rate of home construction has been the lowest since before the Second World War.

Just last week, the S&P/Case-Shiller index of property values reported a 0.8% fall in prices from October 2009 – the biggest year-over-year drop since December 2009. Eighteen of 20 cities showed a drop in prices in October. This was led by a 2.1% decrease in Atlanta, followed by a 1.8% drop in Chicago and Minneapolis. What's more, six markets, including Atlanta, Miami, Tampa and Portland, Ore., reached their lowest levels in October since prices started to retreat.

Indeed, the housing market continues to suffer from too much supply. Though rent prices are generally expected to continue rising modestly this year, the overhang will probably help keep prices from rising too much. "Expect more declines in home prices and more rent stability," Zandi says.

Still, the comparative costs between renting and buying will largely depend on individual market conditions. For instance, cities in Florida and Arizona, which continue to experience high foreclosure rates, falling home prices and widespread unemployment, will be areas where homeownership will likely be more affordable than renting, says Daisy Kong at Trulia, a San Francisco-based real estate data provider. Meanwhile, renting will probably continue to make more financial sense in national and regional job centers such as New York, Omaha and Seattle, she says.

And while it could become more attractive to buy than rent this year, it's anyone's guess how long it could take before a flurry of home sales transpires. Household finances have improved only modestly and are still quite a mess. Also, lending standards for new mortgages have tightened considerably and many economists have said a housing rebound will likely fall mercy to the unemployment rate, which is expected to improve some but still hover over 9%.

Will the American Dream return to your town?

Location	Price-Rent Ratio
Atlanta, GA	12.82
Austin, TX	21.08
Boston, MA	17.71
Baltimore, MD	17.42
Charlotte, NC	25.98
Chicago, IL	15.09
Cincinatti, OH	13.74
Cleveland, OH	11.43
Columbus, OH	15.61
Dallas - Fort Worth, TX	16.98
Denver, CO	22.08
Detroit, MI	12.32
East Bay, CA	35.06
Fort Lauderdale, FL	15.19
Hartford, CT	18.52
Honolulu, HI	34.72
Houston, TX	16.01
Indianapolis, IN	14.68
Inland Empire, CA	14.75
Jacksonville, CA	15.12
Kansas City, KS	14.4
Las Vegas, NV	13.89
Long Island, NY	21.09
Los Angeles, CA	14.99
Memphis, TN	17.92
Miami, FL	14.57
Milwaukee, WI	22.36
Minneapolis, MN	14.04
Nashville, TN	23.88
New Orleans, LA	15.66
New York, NY	15.43
Norfolk, VA	19.88
North - Central New Jersey	24.69
Oklahoma City, OK	16.11
Orange County, CA	27.14
Orlando, FL	13.1
Palm Beach County, FL	16.64
Philadelphia, PA	15.94
Phoenix, AZ	12.35
Pittsburg, PA	11.71
Portland, OR	25.74
Raleigh, NC	24.39
Richmond, VA	22.18
Sacramento, CA	15.85
Salt Lake City, UT	18.05
San Antonio, TX	17.77
San Diego, CA	21.75
San Francisco, CA	27.17
San Jose, CA	32.27
Seattle, WA	26.96
Bridgeport, CT	18.49
St. Louis, MO	14.04
Tampa, FL	13.08
Washington - Northern Virginia - Maryland	18.48
Manhattan, NY	28.34
Metropolitan Area Average	14.85
U.S.	10.42

Source: Moody's Analytics, price-rent ratio for third quarter of 2010. As a general rule of thumb, you should often buy when the ratio is below 15 and rent when it's above 20. If it's between 15 and 20, lean toward renting.

January housing report

January 2011 Real-Time Housing Report

Highlights from this month’s report (available at http://www.pacificsothebysrealty.com/)

• The 10-City Composite is now at $448,996, off 1.63% from last November 2010.

• All 27 of the major markets tracked by the report showed seasonal price decreases. Most were relatively minor, with the steepest declines seen in San Francisco (down 4.77%), San Diego (down 3.71%), and Minneapolis (down 3.16%), respectively.

• Housing inventory is off by 5.89% nationwide, with dramatic decreases in several major markets, including Boston, San Francisco, and Seattle.

This month’s featured chart highlights the difference in pricing of newly listed properties vs. the prices of the market as a whole. Note two trends in the following chart: First, the major January 1 dip implies a weaker Q1 than in 2009 or 2010 when the federal tax credit artificially boosted buyers. Next notice that the first inklings of the stability for the full year will be evident before January completes.

job growth?

The United States economy ended the year by adding 103,000 jobs in December, the Labor Department said Friday, a number that missed expectations and suggested that job growth could continue to hinder a recovery.

Multimedia

Source: Bureau of Labor Statistics

Add to Portfolio

Go to your Portfolio »

In addition, the unemployment rate fell to 9.4 percent last month from 9.8 percent, its lowest rate since July 2009, in part because many Americans gave up looking for work.

The agency also revised estimates from the two earlier months, now saying that 210,000 jobs were created in October instead of 172,000, and 71,000 in November, instead of 39,000.

As with previous months, all of December’s gain — 113,000 jobs — came from private employers.

Federal, state and local governments continued to shed jobs — cutting another 10,000 last month after trimming 8,000 in November, revised from 11,000 — mostly on the local level. States and municipalities dealing with tighter budgets may be faced with further cuts as they try to shrink their deficits.

Since December 2009, the agency said, non-farm employment has increased by 1.1 million, or an average of 94,000 a month.

While the overall job picture showed improvement, the monthly growth was not enough to significantly reduce the ranks of the unemployed or keep pace with people entering the work force. The outlook remains bleak for many workers. More than 14.5 million people were out of work in December, among them 6.4 million who have been jobless for six months or longer.

Jeffrey N. Kleintop, chief market strategist at LPL Financial, said the report was “not terrible” once revisions were taken into account.

“But there is no real job creation here,” he added, noting that the increases in jobs were mostly in the temporary help, education and health care, rather than some of the crucial sectors like manufacturing and technology.

“It just shows business leaders are just not yet willing to commit to long-term growth projects,” Mr. Kleintop said.

Economists also pointed to other signs of a turnaround, though their outlook for 2011 remained varied.

“The U.S. economy finally appears to be picking up steam and headed toward recovery,” said Steven Blitz, a senior economist for ITG Investment Research. “Several economic indicators — including manufacturing and services output, and sales of cars and consumer goods — have shown noticeable improvement over the last few months.”

The economy is predicted to have grown at least 3 percent in the fourth quarter, with estimates even higher for the 2011. Goldman Sachs and Morgan Stanley, for example, have forecast growth of 4 percent for this year.

Economists noted that manufacturing, consumer confidence, capital spending, and claims for first-time jobless benefits were among the data that have generally been improving in recent months, though December’s retail same-store sales reported this week were weaker than expected.

Personal income and consumer expenditures were higher, while the savings rate declined during the year.

“The figures clearly show that with demand for goods and services increasing, employers have far less justification to cut their payrolls,” said Bernard Baumohl, the chief global economist for the Economic Outlook Group, in a research note.

The question, Mr. Blitz asked in his research note, is whether the labor market will keep pace with other economic growth “or will high unemployment be an enduring feature of the United States’ economy?”

In Washington, Congress returned to work this week, and Republicans, who have taken control of the House, have promised to make the economy and job creation a priority. Last month, President Obama and Republican lawmakers reached a compromise that extended tax cuts to all Americans and included $57 billion for unemployment insurance, a bipartisan effort that underscored the urgency felt by the administration and by lawmakers in both parties to prop up the still-struggling recovery.

On Friday, President Obama is expected to announce several additions to his economic team, including Gene Sperling to replace Lawrence Summers as director of the National Economic Council, White House officials said. The president will make the announcement at a window-manufacturing company in Landover, Md. The company, which makes energy-efficient windows and doors, recently expanded and hired new workers as a result of tax credits created by Mr. Obama’s policies.

Economists generally estimate that the economy needs to add more than 120,000 jobs a month simply to absorb newcomers into the labor force, a pace that employers fell behind last year.

News From the Updesk...