Monthly Archives: February 2014

Local Median-Priced House Is $405,000 for January

The median price for a single family house in San Diego dipped 3.6 percent in January from the prior month’s median price to $405,000, said Dataquick, the La Jolla real estate research firm.

Over the 12 months, the median housing price was 16 percent above the median in January 2013 when it was $350,000.

Local single family home sales fell by 14 percent to 2,338 last month.

For the six-county Southern California region, the median priced house sold last month for $380,000, down 3.8 percent from December, but up 18 percent from January 2013

A huge drop off in sales occurred in the region, expected during the holidays, but the 14,471 houses sold was the lowest amount in the past three years, Dataquick said.

While the economy is growing, home sales have been down for the past four months, which could be a result of limited inventory. But higher home prices and a rise in mortgage interest rates could also be factors in the declines, said Dataquick CEO John Walsh.

“Two of the bigger questions hanging over the housing market right now are: ‘How much pent-up demand is left out there,’ and ‘Will inventory skyrocket this year as more owners take advantage of the price run-up?’” Walsh said.

Those questions won’t be answered until the spring, he said.

Mike Allen / San Diego Business Journal / February 13, 2014
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Local Median-Priced House Affordable to 28% of Residents

California homebuyers need an annual income of about $89,000 to qualify for the purchase of a median-priced single family home of $431,510 as of the fourth quarter of 2013, according to the California Association of Realtors.

Using that measure, and other data, CAR estimates the median-priced house is affordable to just 32 percent of the state’s residents. That’s the same as it was in the third quarter, but down from 48 percent being able to afford the median price as of the fourth quarter of 2012.

But in San Diego, the median -riced house is nearly $477,000 so it’s affordable to only 28 percent of the population, CAR said.

To qualify for a median-priced house in the county requires an annual household income of $98,610, to come up with an estimated monthly payment, including taxes and insurance, of $2,470, CAR said.

The Inland Empire median-priced house of $264,000 is still affordable to 49 percent of those counties’ residents.

The least affordable counties in the state are San Francisco and San Mateo at 16 percent, while the most affordable county to buy was Madera where 67 percent of residents can afford the median-priced house of $157,000.

Mike Allen / San Diego Business Journal / February 12, 2014
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San Diego home sales at three-year low

The slowdown in San Diego County’s housing market continued in January, as sales dropped to their lowest levels in three years.

Prices also dipped last month, with the median falling $15,000 from December to $405,000, real estate tracker DataQuick reported Wednesday. Despite the drop, the January median is still up 15.7 percent from January 2012’s median $350,000.

“Two of the bigger questions hanging over the housing market right now are, ‘How much pent-up demand is left out there?’ and, ‘Will inventory skyrocket this year as more owners take advantage of the price run-up?’” DataQuick president John Walsh said in a statement. “Unfortunately, we’ll probably have to wait until spring for the answers. When it comes to statistical trends, January and February are atypical months that haven’t proven to be predictive over the years.”

Last month, there were 2,338 transactions in the county, down from 2,717 in January 2013, and the lowest amount since 2,248 properties changed hands in January 2011. The first month of each year is generally unremarkable when it comes to the housing market because it reflects deals struck during the holiday season, those in the industry say.

“January is typically a slower month,” said Denny Oh, a Realtor with Pacific Sotheby’s International Realty, who specializes in downtown properties. “I think there’s a number of factors with the holidays, the new year, traveling and then starting to look at taxes, and on top of that, you’ve got the uncertainties to where rates are going.”

January’s 15.7 percent year-over-year appreciation is a slight uptick from the 14.8 percent gains seen from December 2013 to December 2012. But Mark Goldman, a loan officer and real estate lecturer at San Diego State University, said the market is generally slowing down to a 3 percent to 4 percent annual appreciation. In June 2013, prices reached a peak 24.1 percent in year-over-year gains.

Walsh said seasonality aside, low supply, a lack of mortgage availability, rising interest rates and home prices are contributing to the slowdown.

In early January, the average 30-year-fixed rate rose to 4.53 percent, more than a percentage point above the 3.34 percent available in January 2012, Freddie Mac reports.

The San Diego region also continues to see low supply. In January, there were 5,844 active listings, a 1,702 gain on January 2013, but still down from the 11,915 seen in January 2011, the San Diego Association of Realtors reports.

The median price for a new home fell to $622,000 in January, when 120 were sold. It reached a record $699,000 in December as large projects across the county closed by the year end. In December, there were 3,099 total transactions in San Diego County, including 284 new homes.

The lack of home sales in January wasn’t limited to San Diego, but spread across Southern California, with slowing in six counties, DataQuick says. Los Angeles home values are seeing 20.6 percent year-over-year gains to $410,000, while those in Orange County rose 19.6 percent to a median $550,000 in January.

Jonathan Horn / UT San Diego / February 12, 2014
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Home Prices Rose in Fewer U.S. Markets in Fourth Quarter

Prices for single-family homes rose in 73 percent of U.S. cities in the fourth quarter, fewer than in the previous three months, as surging values in the past two years started to reduce affordability.

The median transaction price for an existing home climbed from a year earlier in 119 of 164 metropolitan areas measured, the National Association of Realtors said in a report today. In the third quarter, 88 percent of markets had increases.

While tight inventories and improving employment are bolstering the housing recovery, home-price gains are poised to decelerate as an increase in mortgage rates from record lows cuts into affordability. Values have been rising faster than incomes, particularly in the West, the Realtors group said.

“The housing market is still on a recovery path and that recovery is not done,” Michael Hanson, a senior U.S. economist at Bank of America Corp. in New York, said in an interview before today’s release. “At the same time, the pace of those increases should slow.”

The nationwide median price for an existing single-family home rose 10.1 percent in the fourth quarter from a year earlier to $196,900, the Realtors group said. The gain was 12.5 percent in the third quarter.

Biggest Jumps

The best-performing areas were Atlanta and Sacramento, California, where prices jumped 33 percent and 30 percent, respectively. They were followed by Las Vegas and Riverside, California, with more than 26 percent gains.

The areas with the biggest declines included Elmira, New York, where prices fell 12 percent from a year earlier. Following was the Champaign-Urbana area of Illinois, with an 11 percent drop.

About 26 percent of areas had double-digit gains in prices, down from 33 percent in the third quarter. Areas that had price declines after increases in the previous three months include Cleveland; Spokane, Washington; Newark, New Jersey; and El Paso, Texas.

The Realtors group’s affordability index — a gauge of median prices, family incomes and mortgage rates — fell to 175.8 in 2013 from a record high 196.6 in 2012. A measure of 100 means that the median-income household has enough income to qualify for a median-priced existing home. The higher the index, the stronger the household purchasing power.

Equity Gains

“The vast majority of homeowners have seen significant gains in equity over the past two years, which is helping the economy through increased consumer spending,” Lawrence Yun, chief economist of the Realtors group, said in the report. “At the same time, home prices have been rising faster than incomes, while mortgage interest rates are above the record lows of a year ago. This is beginning to hamper housing affordability.”

The most expensive housing market in the fourth quarter was San Jose, California, where the median single-family price was $775,000. It was followed by San Francisco; Honolulu; Anaheim-Santa Ana in California; and San Diego. The lowest-cost metropolitan area was Toledo, Ohio, with a median single-family price of $80,500, followed by Rockford, Illinois; Cumberland, Maryland; and Elmira, New York.

Prashant Gopal / Bloomberg.com / February 11, 2014
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U.S. becoming a ‘renter nation’ says Olefson

To many, the American dream always included the requisite house, white picket fence and 2.5 kids. While that goal is all still attainable, you may soon have to live in someone else’s house with someone else’s fence. According to real estate attorney and author Shari Olefson we may soon become a nation of renters with Wall Street playing landlord.

The culprit, at least in part, is the expiration of the Mortgage Debt Forgiveness Relief Act. This piece of legislation, one that expired at the end of 2013, made it easier for owners with underwater mortgages to short sell their homes without having to pay income tax on the chunk of cash the bank forgave. In short, its expiration might make it worth your while to go into foreclosure instead of short selling.

Olefson says this potential surge in foreclosures would be most common in places that are still recovering from the housing bubble. “These also happen to be the states where you’ve got the big companies, the Blackstones and the big funds, investing in rentals. So a lot of these properties will end up as rentals,” she says.

And there lies the rub. As Olefson points out, investing in “scattered residential rentals” is very different than buying a high rise. “It’s not like having an apartment building,” she notes, “where all the kitchens are exactly the same, and they’re the same age and you have an onsite manager…You’re gonna see hundreds of complaints from renters in those homes finding hidden problems they weren’t aware of, or multiple calls to management and not having a response.”

From there she worries these big companies will dump investments they aren’t pleased with, flooding the market in areas where the home recovery is tenuous at best.

Adding insult to injury, these investors are driving prices higher. Olefson argues, “prices of homes in an area should be based on the area’s income but investors are bidding based on the rent they think they can generate and we know rents are going up much faster than incomes. So the homes are becoming less affordable for folks who want to buy making renting just a much more viable option.”

So where does it go from here? Olefson worries that Washington could get involved. Specifically, that lobbying efforts for renter benefits will succeed, making rentals an even better option than ownership, or in other words, making the U.S. a Renter Nation.

Kevin Chupka / Yahoo Finance / February 6, 2014
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$1M home sales at 6-year high

San Diego County homebuyers last year purchased the most $1 million-plus properties since 2007.

In 2013, 3,519 properties worth $1 million or more sold in the county, a 48.7 percent jump from 2012, real estate tracker DataQuick reported Thursday. It was the highest number of seven-figure homes sold since 3,888 changed hands in 2007. In the summer, San Diego median home values saw 24 percent year-over-year appreciation. That and higher demand pushed many recovering home values back into the $1 million range, DataQuick reports.

The county’s biggest sale last year was a Del Mar home at 1936 Ocean Front, which went for $18.75 million, public records show. La Jolla’s 92037 ZIP code recorded the county’s most $1 million-plus sales in 2013 with 398, ranking it third in the state.

“La Jolla naturally keeps its appreciation stronger than North County,” said Michelle Silverman, a La Jolla-based Realtor with Berkshire Hathaway Home Services. “When you live in La Jolla, you get a view of the water. That’s not going to go away. They are not going to be building new homes in La Jolla.”

La Jolla’s biggest sale last year was an estate at 9736 La Jolla Farms Rd. that went for $18.5 million. That property was originally listed in 2012 for $27.3 million.

Silverman said nine out of the top 10 sold in La Jolla last year were all-cash buys. Those types of deals fueled the market’s jump, she said.

“Everybody was holding onto their cash until they decided it was time to move,” Silverman said.

Most expensive properties sold

Rank Sale Price Address City/Neighborhood Zip code
1 $18,750,000 1936 Ocean Front Del Mar 92014
2 $18,500,000 9736 La Jolla Farms Rd. La Jolla 92037
3 $13,800,000 308 Vista de la Playa La Jolla 92037
4 $11,000,000 8562 El Paseo Grande La Jolla 92037
5 $8,825,000 2337 Calle Chiquita La Jolla 92037
6 $8,550,000 1175 Muirlands Dr. La Jolla 92037
7 $8,300,000 919 Ocean Blvd. Coronado 92118
8 $8,200,000 464 Prospect St. #301 La Jolla 92037
9 $7,500,000 6221 Mimulus Rancho Santa Fe 92091
10 $7,000,000 4 Buccaneer Way Coronado 92118

 

The county’s record number of $1 million-plus homes sold in a year came in 2005, with 5,671 transactions.

Statewide, the number of $1 million-plus home sales hit their highest level in six years with 39,175. The biggest sale came in Malibu, with an estate that sold for $74.5 million in January 2013. The 1993 home has 15,355 square feet, eight bedrooms and 14 bathrooms. The largest property sold had 25,447 square feet and was purchased for $2.25 million in Indian Wells, near Palm Springs.

DataQuick president John Walsh said in a statement that the luxury market reacts to unique economic factors.

“Things like job growth, mortgage interest rates and migration patterns do not play the same role as IPOs, stock market performance or how well one type of investment does compared to another, and where one wants to park one’s excess money,” Walsh said.

Del Mar was the only other county ZIP code to rank in the top 25, with 310 sales above $1 million. Manhattan Beach had the most last year, with 439 sales above $1 million.

In California, there are 8.8 million homes and condos, 270,590 of which are assessed at more than $1 million, DataQuick reports. The real-estate tracker said last year there were 6,440 sales where the price was unavailable, but it could be determined that the deal exceeded more than $1 million because of the size of the mortgage.

Bloomberg News contributed to this report.

Jonathan Horn / UT San Diego / January 30, 2014
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