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Market Update

APR in the News

How can you tell when a property is overvalued?

February 2, 2016
Agents SOUND OFF
 

Matt Tenczar
San Jose – Almaden Valley
408.605.8124
tenczarteam@apr.com

Question: How might Warrior arena in Mission Bay affect our real estate market?
Answer: My initial response: “Is there such a thing in the Bay Area?” Consider Santa Clara County, where only 545 single-family homes and 171 condos/townhouses are actively for sale and the average home sells at 102 percent of its list price. Is it possible there might not be such a thing as an overvalued home? I often tell buyers when they ask me if a home is worth it that if it isn’t today, it will be tomorrow.
Having said that, the question remains how do you tell if a home is overvalued. It turns out there really is such a thing in the Bay Area. When looking at the statistics of home sales, the average home takes 35 days to sell, so that means not every home sells in one week and receives multiple offers that are hundreds of thousands of dollar more than the list price. So how do you tell? If you are a buyer, you start with looking at the days on market.
Any home on the market for more than 30 days possibly has something wrong with it, and whatever the “it” is, the price will be part of it. Homes that have been on the market for a long time sell for a lower price. So I would define an overvalued home as one that’s been on the market without receiving any offers for more than 30 days.

Read more opinions on SFGate.

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APR in the News

How might Warrior arena in Mission Bay affect our real estate market?

October 20, 2015
Agents SOUND OFF
 

Mark Neuterman
San Francisco
415.885.9986
mneuterman@apr.com

Question: How might Warrior arena in Mission Bay affect our real estate market?
Answer: Our real estate market continues to thrive with projects like the new Warriors stadium in Mission Bay. It’s one more example of an area ready for revitalization and development.
There will undoubtedly be some logistical hurdles like traffic, noise and parking to contend with. However, local commerce will certainly benefit from the influx of additional sports fans.
Any opportunity to increase exposure and revenue to our amazing city of San Francisco is advantageous for homeowners and business owners alike.

Read more opinions on SFGate.

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Market Updates

Luxury is Alive on the Peninsula

April 21, 2014

Author: Rainy Hake, Executive Vice President, Alain Pinel Realtors
This article ran in the April 18th, 2014 Palo Alto Daily News publication Premier Homes, pg 10.

Last week, it was announced that the “Copper Beech Farm” estate in Greenwich, Connecticut sold for $120 million. While the property sold for $70 million below the original asking price of $190, the 51-acre estate still captured the title as the single most expensive home sale in the country ever.
While the Bay Area might not be home to the highest single-family home sale in the nation, it is no stranger to luxury. The highest property currently on the market is the impressive $69.8 million “Flood Estate,” sitting on over 90 acres in Woodside. Communities in the Bay Area – including Atherton, Menlo Park, Los Gatos, Los Altos Hills, and many more are known for their high-end homes that fetch some of the highest average prices in the country. It is no surprise that they are consistently among the most expensive zip codes in the nation.
As we wrap up the first quarter of the year, the report remains much the same as it has in the previous year – with constrained inventory, prices are continuing to elevate, while the number of sales are slightly down when compared to last year. It will really be this next quarter that communicates the true economic direction for the year, as warmer weather and seasonal changes usually draw more sellers to the market.
While this is the case for the general real estate market, when you look at the highest price points in the Bay Area, you will see a more favorable story. If you look at Santa Clara and San Mateo counties – there are a considerable number of homes over $3 million on the market (94 and 95, respectively). While this may not seem like many, when you look at supply and demand at this price point it is reflective of a relatively healthy inventory.

What is most interesting in the numbers is the year-over-year increases we are seeing. While the rest of the market is slightly down when it comes to number of sales (-9% in Santa Clara County and -6% in San Mateo County), we are seeing high double or even triple-digit increases in the number of sales of homes priced over $3 million and $5 million – and 2013 was a good year! For both Santa Clara and San Mateo counties almost half of the quarter’s sales over $5 million happened in March alone.
While these numbers are fairly impressive, they are actually understated because these numbers are taken directly from the MLS – and at the highest ends of the market, we see more “off-market” listings and transactions. So, if anything, this means that the actual activity in the luxury market is even better than statistically reported.
As we enter the spring, one thing is clear – the luxury and high-end market is alive and well in the Bay Area.


rhakeAbout Author:

Rainy Hake currently serves as the Executive Vice President of Alain Pinel Realtors where she plays a role in managing the strategic direction of the company, and also oversees the Marketing, Technology, Training and Strategy departments. She has over 15 years of experience in the real estate industry and holds and MBA from the University of Oxford.
 
 
Market Updates

Bay Area Market Summary 2013

February 12, 2014


Overall, 2013 was a banner year in the Bay Area real estate market – especially in the luxury and higher end markets our region is known for. While we have known the real estate market has been rebounding, this past year we saw that recovery dramatically accelerate. While the numbers showed limited inventory and historically low interest rates, the headlines told stories of multiple offers and bidding wars. With an influx of cash from booming tech companies and international buyers, sales and prices reached or exceeded pre-recession peaks in many of our communities. In some areas, year-over-year numbers show double-digit increases. For Alain Pinel Realtors, this meant a record breaking year in which we closed $10.5 billion, a 19% increase over our 2012 sales.
For a more detailed look at 2013 and the year ahead, check out our summaries on specific regions below:
East Bay: Limited inventory of homes for sale continued to keep a lid on the number of sales while driving sales prices upward and time on the market downward. Unlike buying frenzies of the past, overpriced and/or poorly prepared properties didn’t attract buyers, while properties that were priced well received a lot of attention, resulting in many multiple-offer situations.  We anticipate a more moderate increase in home prices as inventory begins to increase and the anticipated increase in interest rates somewhat dampen demand compared to 2013 levels.
Marin: 2013 was the best of times, and it was the worst of times. We struggled with a low inventory of houses all year, yet the number of homes sold was very good. In terms of homes sold, 2013 was significantly ahead of 2012 (California’s first year of recovery after the recession), and in May, July and December, even outperformed pre-recession numbers. All-in-all, this is a very strong indication that the recovery is alive and well.
Monterey Bay: The Monterey Bay is probably one of the most diverse areas of California, with prices ranging from $80,000 to $80,000,000. While total number of sales remained relatively level, we’ve seen an increase in median home price. In Santa Cruz County, we have seen a new energy in sales of $1 million or more. In Monterey County, we are experiencing more sales and fewer listings, which means that prices will go up even more. The overall market is now on solid footing and we project that 2014 should show continued growth.
Peninsula: The entire region is experiencing one of the shortest inventory selections in years. Multiple offers still abound, yet in most cases, fewer than earlier last year. Agents are finding themselves reaching out to their co-workers for upcoming offerings and priming their clients to react as quickly as possible when the right property comes on the market. The coastal area had a phenomenal increase in activity in 2013 and offers tremendous value in 2014 compared to many Peninsula areas. Although multiple offers are somewhat common in that market as well, they are not experiencing the frenzy that many Peninsula communities are.
San Francisco: The market continues to be a seller’s market with price appreciation continuing to rise in 2014. In most San Francisco neighborhoods, there is a shortage of available homes; however, record-low rates continue to drive buyers into the City. In addition, cash offers are plentiful, fueled by Silicon Valley and Pacific Rim buyers. New condominium developments will provide much needed product in 2014 on the Van Ness Corridor and Market Street. Multi-family and apartment buildings will continue to be sought after by value investors, motivated by record high rents paid by newcomers.
Silicon Valley: Because of the shortage of inventory and an excess of buyers, many transactions experienced multiple offers, with most properties selling over the listed price. Although the total number of sales was off slightly from 2012 (-5%), there was a dramatic increase in the median sale price (+23%). It is expected this robust marketplace to continue into 2014, especially during the first six months. Elements that will influence the rate of appreciation and level of activity in 2014 are: interest rates (it is anticipated they will rise), scarcity of inventory, and overall economic health.
Wine Country: While generally speaking the number of sales in the region was slightly fewer in 2013 than 2012, the average sales prices were significantly higher. 2014 is starting very strong as dryer conditions and warmer weather have resulted in many consumers flocking to the region. The hills may be brown instead of their lush winter green, but it’s great for wine country real estate, which traditionally doesn’t take off until the second quarter.
Overall, as we look towards 2014 in the Bay Area, we expect a healthier, balanced market. Lured by increasing prices, and new-found equity in their homes, we expect more sellers to enter the market, slowly increasing inventory. Some wild cards for buyers include interest rates, interest deductions and mortgage reform, and the actions of the Federal Reserve, which all can impact housing affordability. However, we expect sustained demand for home ownership and continued, but slower, growth in sales and home prices – leaving plenty of opportunity for buyers and sellers in 2014.
This article recently published in the Winter 2014 Exquisite Living.


About Exquisite Living

Exquisite Living is a premier digital luxury magazine presented by Alain Pinel Realtors. The magazine immerses readers in the luxuries of the Bay Area and beyond as one flips through luxury trends, market updates, community spotlights, and of course some of the most magnificent homes and estates.
 
 
 
 
Buyer / Seller Information Market Updates

In SF: Cash is Not Always King

July 10, 2013

Author: Tim MurrayVice President and Regional Manager of the firms’ San Francisco and Sonoma offices.

Buyers in San Francisco need to be patient and work with an outstanding real estate agent to get into escrow these days. From entry level one bedroom condominiums to luxury properties above $4 million – cash is king unless the buyer is work with an institutional lender and is willing to offer substantially over the list price. A recent example on entry level is a condominium listed for just under $500,000 which sold for $640,000. The offer was accepted without an appraisal contingency and with a 30-day close of escrow.
In the mid-range of the market, a single family home near Noe Valley, the hot spot for Silicon Valley buyers who choose to live in San Francisco, was listed for $899,000 and settled at $940,000. The deal fell through with the buyers getting cold feet. However, the property was re-listed a week later and sold for $1 million.
On the luxury end of the market, a cash offer was submitted for about $3 million on a home listed for $2,495,000 with no contingencies and a six-day close. The buyer was not successful in getting the property, as the seller accepted a higher offer. Cash is not always king and doesn’t guarantee success. Price is trumping cash right now – even with a loan contingency. If a buyer is willing to offer substantially over the list price, they can be successful.
This is our modern day version of Tales of the City. A convergence of wealth from Asia and wealth from Silicon Valley has created a seller’s market par excellence. Invariably, more homes will be coming on the market in San Francisco due to the rapid increase in prices. Buyers will be able to purchase in the lowest interest environment in our lifetimes which will continue to fuel sales.
Luckily, many of our agents at Alain Pinel Realtors are able to get buyers into properties even in this extremely competitive market in San Francisco. Buyers should not feel discouraged even if they have missed out on a few good opportunities.
Sellers are also contacting us to get market evaluations of their properties. Since prices have risen substantially in the last year, many sellers are planning to put their properties on the market this summer or early autumn 2013.
See homes and condos for sale in San FranciscoVisit our community page.
 


About Author:
Tim Murray manages the San Francisco and Sonoma offices of Alain Pinel Realtors, is responsible for day-to-day operations at both locations, and is charged with growing the firm in the City and North Bay. Previously, he was President and CEO of Pacific Union GMAC Real Estate from September 2003 to early 2007. In addition to his passion for luxury real estate and international marketing, Tim is also very committed to public service and local philanthropy.
 

Buyer / Seller Information Market Updates

Possible Relief For Buyers? A Look at San Mateo County

July 2, 2013

Author: Rainy Hake, Executive Vice President, Alain Pinel Realtors

As the summer heats up – so has the market! At Alain Pinel Realtors, we just finished our best month on record – writing and closing just over $1 billion in a single month. This was aided in large part to the increases we are seeing in home prices across the Bay Area. According to DataQuick, a reporter of MLS data, the median home price in the nine-county Bay Area hit a 5-year high last month at $519,000. This is the highest median price seen since March 2008.

The story on the Peninsula is very similar, but magnified due to the highly desirable Peninsula neighborhoods and communities that are able to garner top dollar. Let’s take a look at the numbers from the most recent month in San Mateo County:


Prices are up. The numbers on the Peninsula are clear – prices are rising. In May 2013, the median price of sold homes hit $957,000 – not only a 25% increase from last year, this also marks the 4th consecutive month that prices are up over the previous month.

Sales are up. While sales overall are down slightly (2.9%) from last year, we are still seeing large increases month-to-month (up 13.7%). In fact, this month represents the 5th consecutive month that the number of sales has increased.

A lot of the numbers can be explained because of inventory. Inventory, measured by months of inventory (the amount of time it will take to eliminate all current inventory in the market based on current sales), has remained constrained for well over a year now. It currently stands at 1.3 months in San Mateo County and we have not seen anything higher than 1.8 in the past 15 months. 

With such low inventory, buyers have seen an incredibly competitive market that has driven up prices. It is worth noting that houses are still selling – they’re just selling at a very quick pace, not allowing the inventory to build up. This means there are still many new listings coming on the market for buyers; they just don’t stay long.

While the numbers are able to tell you a decent amount about the market today, we are starting to hear about some changes from our agents on the ground. Interestingly, while the past several months have been filled with stories of multiple offers, we’re hearing that is beginning to slow down. Instead of the 10 offers we have been seeing, our Palo Alto office has reported seeing 3-5 offers on well-priced homes. However, the buyers are still motivated, coming in with strong competitive offers. Hopefully for well qualified buyers, the slight drop in the number of multiple offers coming in offers some relief. Previously we were seeing buyers making around 9 offers before finally landing their dream home.

Another interesting development for buyers to watch is interest rates. According to FreddieMac, the rate of 30-Year Fixed-Rate Mortgages ticked up to 3.93% earlier this month, whereas it has been hovering around 3.5% all year. While this is a minor uptick, it does emphasize a point we’ve made here before: these historically-low rates are not permanent. While I’ve noticed several articles about the interest rate increase that may scare off buyers, these rates are still incredibly low and should be taken advantage of. Increasing interest rates could still result in some buyers (especially investors) exiting the market.

While there are still great opportunities for sellers, there seems to be some movement opening opportunities for buyers. With the recent surge in prices, it likely will bring a surge of potential sellers, looking to list their home and take advantage of their new equity. There is no doubt about it – this still is a very competitive market. However, with some buyers exiting the market, a decrease in multiple offers, and a possible increase in inventory coming, we might finally be seeing some welcomed relief for potential buyers. While the overall effect all of this will have on the market will not be known for some months – it does seem that hints of change are in the air.

This article recently ran in the July 28th, 2013 Palo Alto Daily News publication Premier Homes.


About Author:

Rainy Hakecurrently serves as the Executive Vice President of Alain Pinel Realtors where she plays a role in managing the strategic direction of the company, and also oversees the Marketing, Technology, Training and Strategy departments. She has over 15 years of experience in the real estate industry and holds and MBA from the University of Oxford. 
Buyer / Seller Information Market Updates

Market Update: The Scoop in Saratoga

June 7, 2013

Author: Carol BurnettVice President and Manager of Alain Pinel Realtors Saratoga office.
Check it out:  The most expensive home to hit the residential market is a 50-acre waterfront estate in Greenwich, Connecticut at a list price of $190 million. If you are looking for something to top that, take a look at the Monaco penthouse that is being completed (with a rooftop infinity pool!).  It is anticipated to come on the market next year for £256 million (or around $390 million) – taking the title of “World’s Most Expensive.”
The good news – a lovely property in Saratoga, consistently named one of the premier luxury communities in Silicon Valley, can be purchased for much less! The bad news – I recently read a report that claimed San Jose and the Silicon Valley was the fastest moving market in the United States in April, where nearly two-thirds of new listings were under contract within two weeks.
Currently, the list price of single-family properties in Saratoga ranges from a low $1.1 million to a high of $14.8 million. Inventory, measured by “months of inventory” (the amount of time it will take to eliminate all current inventory in the market based on current sales), remains low. For the past 15 months, the “months of inventory” has ranged from a low of 1.1 months to a high of 3.9 months – and currently sits at 1.8 months.
There continues to be steady appreciation in Saratoga – a testament to how “sought-after” this area is. The median price has gone from $1.448 million in February 2012 to the current median price of $1.830 million.
As is common in a lot of Bay Area marketplaces right now, we continue to see multiple offers on most properties, with the exception of those at the highest price points (about $3 million and above here in Saratoga). Recently a property set against the Saratoga foothills and listed at just under $1.8 million – which received 7 offers – and sold nearly 30% over the list price to an all cash offer with a 3 day close of escrow!
Silicon Valley continues to be a place of distinction for both work and lifestyle. Take a look …
See homes for sale in Saratoga. Visit our community page.
 


About Author:
Carol Burnett serves as Vice President and Manager of Alain Pinel Realtors Saratoga. Bringing more than 30 years of real estate experience to APR, Carol is widely recognized as one of the top 50 women in Silicon Valley business circles.  She not only leads the day-to-day operations and marketing of one of APR’s largest and most profitable offices, she also orchestrates the Estates Tour of Saratoga, Los Gatos and Monte Sereno every spring that launches the primary home buying and selling season for luxury-class properties.

 
 

 

Buyer / Seller Information Market Updates

Now Is The Time To Buy and Sell

February 13, 2013

Author: Rainy Hake, Executive Vice President, Alain Pinel Realtors
How is the market? Is it a good time to buy? Sell? These are the questions every real estate professional hears at the start of the year. While people asking often want a quick answer, the reality is almost all markets have opportunities for both buyers and sellers – and in 2013, the San Francisco Bay Area is no different.
First, let’s reflect on what we saw here at Alain Pinel Realtors (APR) in 2012. We saw high sales volume and closed units, resulting in our best year on record – and we’ve been around since 1990. Almost every one of our 32 offices around the Bay Area increased their year-over-year sales.
While our skilled real estate professionals absolutely played a huge role in this tremendous accomplishment, the market also was at work. According to the California Association of Realtors, prices are up as much as 25% year-over-year in some Bay Area neighborhoods. Looking specifically at San Mateo County, year-over-year transactions increased 10% and the average price rose 7%. This trend was reflected in the high-end market as well. According to DataQuick, in the nine counties that make up the Bay Area, the number of sales that were above $1 million rose 29% year-over-year to 11,041 – and 162 of them were above $5 million!
A lot of these statistics are reflected in what our agents were seeing day-to-day on the ground with their clients. With many of our local markets having less than 1 month of inventory, homes that were on the market were selling quickly. In San Mateo, the average days on market dropped 28% in San Mateo County, according to TrendGraphix. It also seems like every REALTOR® has a story of helping their clients through an intense multiple-offer situation. With interest rates incredibly low, the buyers in the market were taking advantage of their increased buying power.
2013 has started off with many of the same characteristics as 2012. Let’s look at what that means for buyers and sellers.
Sellers – The market in the Bay Area is extremely strong and prices are the highest we have seen in years. While not everyone has regained the equity lost in their homes, well positioned sellers are taking advantage of their selling power now. While there is no guarantee to how long your house will be on the market, on average, we are seeing homes move quicker than the previous year. With restricted supply and high demand, we are seeing an increase in the number of motivated buyers in the marketplace, with well-priced homes receiving multiple offers – the most in the last 12 years.
Buyers – While it sounds like it is a great time to be a seller, there are plenty of opportunities that exist for patient buyers. We are experiencing some of the lowest interest rates in history, increasing buying power and making home ownership more affordable for many. Rental rates, especially in the Bay Area, also continue to climb making it very attractive for those who can qualify for financing to purchase rather than rent. And as we look ahead, these conditions might not last forever. The Mortgage Bankers Association expects the 30-year fixed mortgage rate to rise almost a full point over the next two years. Also, nearly 30% of all Bay Area home sales in 2012 were cash buyers illustrating that investors are recognizing the buying opportunities that currently exist. With prices rising and investors trying to capitalize on low interest rates, the time to jump into the market is right now.
Casual observers of the market and the media at-large often try to simplify the market as a buyers’ or sellers’ market. However, in almost any market, there are opportunities on both sides of a transaction. As outlined, 2013 has potential benefits for buyers and sellers – consulting a REALTOR® and looking at your specific situation is the first step to capitalizing on them. Happy New Year.
This article recently ran in the February 8th, 2013 Palo Alto Daily News publication Premier Homes.


About Author:

Rainy Hake currently serves as the Executive Vice President of Alain Pinel Realtors where she plays a role in managing the strategic direction of the company, and also oversees the Marketing, Technology, Training and Strategy departments. She has over 15 years of experience in the real estate industry and holds and MBA from the University of Oxford.