So you have purchased a single-family house that needs work and you’re all set to rehab it so that you can resell it. You have just one little question: “Where do I begin?! I don’t know how to rehab a house!” When you first took on this project, the idea of rehabbing a single family home didn’t seem like that much work. But now that it’s yours, it looks like there are a million things to do. First things first... rehabbing is just like anything else: you need a plan. Let’s make ours!If you are new to the rehabbing business, you need to make sure you’ve purchased the right kind of house—in this case, a property that needs cosmetic rehabs. That means you want to stay away from houses that have structural issues with the foundation or floors; fire damage; dry rot or termite damage; and the like. The same goes for systems: electrical, plumbing, and heating. These can be complicated and costly. For the newbie, there is no sense biting off more than you can chew. Although properties with such defects can often be purchased at a better price, the estimate and cost—not to mention the experience necessary—to make such repairs can quickly eat up the novice investor’s profit margin. And then there’s the stress! So let’s keep it easy.
Now, after you have a good home that needs cosmetic improvements, where should you begin? Here’s our plan for rehabbing single-family homes: 1. Start with the outside: You’ll want to make the property presentable from the street. This includes the major details, like picking up any junk or trash, clipping back overgrown shrubs or trees, and generally making the house pleasantly visible from the street. Save the small details, like planting flowers, for later. For now, just get it cleaned up!2. Evaluate the interior work that is needed: You are going to be concerned with the three primary regions of the house, including the kitchen, baths, and living areas. Depending on the amount of work each needs, the kitchen and baths will be the most expensive rooms to fix. They will often also be the major selling points of the house. Determine what you want or need to do to each, and create a budget. Stick to it. 3. Clean it out: Like you did with the outside of the house, make sure you get rid of everything inside before you start working. It’s much easier to get things done when you don’t have to work around leftover boxes, furniture, or piles of garbage!
4. Make sure you or whomever you hire to do the interior rehab does a quality job. Don’t overlook the details, such as replacing ALL the outlet covers and switch plates, and carefully masking any trim as you paint. Trust us: If you gloss over the little things, buyers will notice.
5.Add the finishing touches and start marketing your house for sale. Actually, you can start the marketing process sooner—oftentimes even while you are still working on the interior rehab (it’s one of the reasons we cleaned the outside first). Then pay attention to the little things like planting flowers outside and replacing the house numbers (curb appeal). Think: “Would I want to buy this house?”6. Whether you decide to market it yourself or enlist the help of a Realtor, make sure you have priced the house correctly based on recent comparable sales. Starting with too high of an asking price can cause a house to languish on the market. Too low and you won’t maximize your profit. And that’s really it. Once you’ve sold the house, you’re ready to begin again. Have fun!
Friday, November 18, 2011
Monday, August 22, 2011
Wall Street volatility and economic issues weigh on housing market
It has certainly been a rough August for the financial markets, and we still have more than a week to go! Wall Street has taken us on a wild rollercoaster ride with volatility spiking to its highest level since the end of the recession. One day the Dow’s down 400 points, the next its up 400, then down again. Much of the turmoil is due to worries about the U.S. economy and whether we’re headed for a double-dip recession, as well as the political infighting in Washington over the debt ceiling, and the European sovereign debt concerns.
The troubled economic backdrop has many people wondering if this is 2008 all over again. And more specifically, what impact will all of this have on the nation’s housing market, and our local markets here in the Bay Area?
Without glossing over our current economic challenges, I strongly believe that we are in a very different place today than we were three years ago. At the depth of the recession we had a liquidity crisis. Today, banks aren't lending as much as we'd like, but their balance sheets are strong with enormous cash reserves. Top 500 corporate earnings continue to be very strong, and capital investment is increasing. Although GDP growth rates are lukewarm, we've nonetheless had eight straight quarters of economic growth.
Nationwide, foreclosures have declined for a 10th month in a row. We have not seen the end of the foreclosure pipeline, but these declines are still a good signal to the public. There is no doubt that structural issues remain in our economy. But they are not fundamentally different from two weeks ago, before the S&P downgrade of U.S. debt. As such, there's little justification for the current reaction other than issues of confidence and perception.
Real estate has always been a very local business. And while the national headlines may frighten us, it’s important to remember that the Bay Area has consistently had a stronger economic base and thus a more resilient housing market than most other parts of the country. That’s especially true with Silicon Valley, the Peninsula, and San Francisco.
Why is it that the Bay Area seems to fare better than many parts of the U.S. when economic turmoil strikes? One reason, of course, is the rapid growth of new Silicon Valley companies, and along with them, high-paying jobs. Another is the booming social media sector, which is also being led by Bay Area firms (Facebook, Twitter, LinkedIn). We’re also the center of the rapidly expanding biotech field and the burgeoning “green” technology industry.
According to the Bureau of Labor Statistics, seven of the nine Bay Area counties saw year over year employment growth. Additionally, the jobs being created tend to be much higher-paying positions than elsewhere in the U.S. Santa Clara County recorded the highest average weekly wage in the state, as well as the nation, at $1943, more than twice the national average, followed by San Francisco ($1573) and San Mateo ($1564).
A couple of recent reports by the Bay Area Council underscore why our local region really is at the forefront of job creation.
According to a report released by the Brookings Institution, in partnership with the Bay Area Council Economic Institute, the San Jose-San Francisco-Oakland Bay Area now leads the nation in clean tech jobs, with 11 percent of all US clean tech jobs located in the region. The Bay Area exports more than $1 billion in clean tech products, including building control systems and electric vehicles.
What does this translate into as far as hiring? The Bay Area now supports 70,679 clean tech jobs (51,811 in San Francisco and 18,686 in San Jose). In San Jose, the largest segment is wind energy with 3,000 jobs, and the fastest growing segments were Fuel Cells, where employment grew 24.7 percent in the past seven years, and Wind Energy, where employment grew 17 percent. In the San Francisco-Oakland area, the largest employment is Professional Energy Services with 7,532 jobs.
Likely due to the passage of the Global Warming Solutions Act, and various tax credits and incentives, between 2003 and 2010, clean tech jobs grew by an average annual rate of 5.4 percent in San Francisco and 12.6 percent in San Jose, far outpacing the 4.2% pace of job creation for jobs nationally.
The growth of the clean tech sector in the Bay Area is one more reason why local hiring is one the rise, according to another study by the Bay Area Council. In spite of the economic headwinds at the national level, small and medium Bay Area businesses are still looking to hire over the next six months, researchers found. The business confidence index – the number that distills the survey findings – registered at 62. A reading over 50 signals positive economic times, while below 50 is negative.
“Despite all the national talk about a dreaded double-dip recession, the Bay Area seems to be weathering the recovery much better than other regions,” said Jim Wunderman, President & CEO of the Bay Area Council. While acknowledging the economic concerns, Wunderman said, “Confidence amongst business leaders continues to slowly build.”
All of this is not to sugarcoat our current economic problems. We’re certainly not out of the woods yet and we have a ways to go before we see a full housing market recovery. But we are making progress, even if it’s not at the pace we’d all like to see. And given our region’s track record of economic growth and leading the way in the creation of jobs for the future, I’m confident we’ll continue to see better days ahead.
Rick Turley
President, Coldwell Banker
The troubled economic backdrop has many people wondering if this is 2008 all over again. And more specifically, what impact will all of this have on the nation’s housing market, and our local markets here in the Bay Area?
Without glossing over our current economic challenges, I strongly believe that we are in a very different place today than we were three years ago. At the depth of the recession we had a liquidity crisis. Today, banks aren't lending as much as we'd like, but their balance sheets are strong with enormous cash reserves. Top 500 corporate earnings continue to be very strong, and capital investment is increasing. Although GDP growth rates are lukewarm, we've nonetheless had eight straight quarters of economic growth.
Nationwide, foreclosures have declined for a 10th month in a row. We have not seen the end of the foreclosure pipeline, but these declines are still a good signal to the public. There is no doubt that structural issues remain in our economy. But they are not fundamentally different from two weeks ago, before the S&P downgrade of U.S. debt. As such, there's little justification for the current reaction other than issues of confidence and perception.
Real estate has always been a very local business. And while the national headlines may frighten us, it’s important to remember that the Bay Area has consistently had a stronger economic base and thus a more resilient housing market than most other parts of the country. That’s especially true with Silicon Valley, the Peninsula, and San Francisco.
Why is it that the Bay Area seems to fare better than many parts of the U.S. when economic turmoil strikes? One reason, of course, is the rapid growth of new Silicon Valley companies, and along with them, high-paying jobs. Another is the booming social media sector, which is also being led by Bay Area firms (Facebook, Twitter, LinkedIn). We’re also the center of the rapidly expanding biotech field and the burgeoning “green” technology industry.
According to the Bureau of Labor Statistics, seven of the nine Bay Area counties saw year over year employment growth. Additionally, the jobs being created tend to be much higher-paying positions than elsewhere in the U.S. Santa Clara County recorded the highest average weekly wage in the state, as well as the nation, at $1943, more than twice the national average, followed by San Francisco ($1573) and San Mateo ($1564).
A couple of recent reports by the Bay Area Council underscore why our local region really is at the forefront of job creation.
According to a report released by the Brookings Institution, in partnership with the Bay Area Council Economic Institute, the San Jose-San Francisco-Oakland Bay Area now leads the nation in clean tech jobs, with 11 percent of all US clean tech jobs located in the region. The Bay Area exports more than $1 billion in clean tech products, including building control systems and electric vehicles.
What does this translate into as far as hiring? The Bay Area now supports 70,679 clean tech jobs (51,811 in San Francisco and 18,686 in San Jose). In San Jose, the largest segment is wind energy with 3,000 jobs, and the fastest growing segments were Fuel Cells, where employment grew 24.7 percent in the past seven years, and Wind Energy, where employment grew 17 percent. In the San Francisco-Oakland area, the largest employment is Professional Energy Services with 7,532 jobs.
Likely due to the passage of the Global Warming Solutions Act, and various tax credits and incentives, between 2003 and 2010, clean tech jobs grew by an average annual rate of 5.4 percent in San Francisco and 12.6 percent in San Jose, far outpacing the 4.2% pace of job creation for jobs nationally.
The growth of the clean tech sector in the Bay Area is one more reason why local hiring is one the rise, according to another study by the Bay Area Council. In spite of the economic headwinds at the national level, small and medium Bay Area businesses are still looking to hire over the next six months, researchers found. The business confidence index – the number that distills the survey findings – registered at 62. A reading over 50 signals positive economic times, while below 50 is negative.
“Despite all the national talk about a dreaded double-dip recession, the Bay Area seems to be weathering the recovery much better than other regions,” said Jim Wunderman, President & CEO of the Bay Area Council. While acknowledging the economic concerns, Wunderman said, “Confidence amongst business leaders continues to slowly build.”
All of this is not to sugarcoat our current economic problems. We’re certainly not out of the woods yet and we have a ways to go before we see a full housing market recovery. But we are making progress, even if it’s not at the pace we’d all like to see. And given our region’s track record of economic growth and leading the way in the creation of jobs for the future, I’m confident we’ll continue to see better days ahead.
Rick Turley
President, Coldwell Banker
Monday, February 7, 2011
Financial markets hit 2 ½ year highs – will real estate follow?
The financial markets continued to improve over the past few weeks with both the Dow Jones Industrial Average and the S&P 500 reaching and surpassing two key milestones. The Dow eclipsed the 12,000 threshold and the S&P climbed over the 1300 level for the first time in two and a half years. Both milestones are viewed by market watchers as important barometers, not only of the health of Wall Street but consumer sentiment on Main Street.
Steady improvement in the financial markets is putting the Great Recession even farther behind us. It means that retirement accounts for millions of Americans have erased much of the losses inflicted by the sharp downturns of 2008 and early 2009. Two years ago next month the Dow stood at 6,547 and the S&P at 676. Since then, they’ve nearly doubled in value. It’s an encouraging signal that the economic recovery is gaining traction, albeit slower than most of us would like.
So what about the real estate market? In general, the nation’s housing market remains fragile. While there has been improvements in many communities since the depths of the recession, including here in the Bay Area, the market overall continues to be challenged by high unemployment rates and the shadow inventory of additional homes that could fall into short sales or foreclosures.
While acknowledging all of the economic headwinds, Rick Newman, chief business correspondent for U.S. News and World Report, wrote this week that the stage could be set for a solid recovery in the housing market this year. “A buzzer won't go off when it happens, but 2011 could be the year that the housing bust officially ends,” he said.
Nationwide, prices have fallen by about 30 percent since the peak in 2006, and Moody's Analytics thinks they could fall another 5 percent or so in 2011. “But improvements in the overall economy will lift the housing market sooner or later, with many buyers who have been sitting on the sidelines finally deciding to take the plunge,” Newman writes. “In a few markets, that already appears to be happening.”
U.S. News says home buyers are tiptoeing back into the market, amid an increasing number of signs that the fifth year of the housing bust might be the last. “Economists are watching closely for an inflection point at which the housing market turns upward for good. But for buyers planning to live in a home for years, precise timing matters less because they also need to take into account the direction of interest rates and their own personal need for housing,” Newman said.
“With flippers and speculators largely out of business, most buyers simply want to know that the home they buy won't plunge in value once they own it. In many U.S. cities, that now looks to be the case,” he adds.
U.S. News points to four reasons that home buyers may be feeling more confident that it's safe to step off the sidelines:
In some markets, homes are now undervalued. According to the Case-Shiller home-price index, overall prices nationwide have fallen 30.3 percent since peaking in 2006. Moody's, for instance, says that homes are undervalued in many cities, based on the ratio of home prices to median income.
Affordability is excellent. Falling prices, plus falling interest rates, have made homes more affordable than they've been in decades. The National Association of Realtors' affordability index, which goes back to 1970, is at the highest level it's ever been. The typical family today needs to spend just 13 percent of its monthly income to pay the mortgage on a median-priced home, compared with nearly 25 percent at the peak of the housing bubble.
Economic factors that affect housing are improving. Most economists believe the recession is over for good, with the risk of a double-dip fading rapidly. Consumers are spending again, and the economy is growing. Big companies have lots of cash and are in a good position to hire once business picks up. A rally in the financial markets is helping many Americans recover some of the wealth they've lost through falling home values. Those trends all support increased higher demand for homes.
The government will continue to support housing. There will likely be continued political debate over Fannie Mae and Freddie Mac, the troubled housing agencies now operating under government control. But despite some calls for a private system to finance housing, it's likely the government will remain a key player in the mortgage market until at least 2013, after the next presidential election. And once policymakers figure out how to replace Fannie and Freddie, it will probably happen slowly, so as not to upset the housing recovery.
While it’s still too early to tell for sure where we are in the recovery, anecdotal reports from our field offices tell us that things are gradually moving in the right direction. Buyers are easing back into the housing market in many Bay Area communities. As we approach the spring buying season it will be interesting to see how this translates into sales. Stay tuned! http://www.cloneyrealestate.com/
Steady improvement in the financial markets is putting the Great Recession even farther behind us. It means that retirement accounts for millions of Americans have erased much of the losses inflicted by the sharp downturns of 2008 and early 2009. Two years ago next month the Dow stood at 6,547 and the S&P at 676. Since then, they’ve nearly doubled in value. It’s an encouraging signal that the economic recovery is gaining traction, albeit slower than most of us would like.
So what about the real estate market? In general, the nation’s housing market remains fragile. While there has been improvements in many communities since the depths of the recession, including here in the Bay Area, the market overall continues to be challenged by high unemployment rates and the shadow inventory of additional homes that could fall into short sales or foreclosures.
While acknowledging all of the economic headwinds, Rick Newman, chief business correspondent for U.S. News and World Report, wrote this week that the stage could be set for a solid recovery in the housing market this year. “A buzzer won't go off when it happens, but 2011 could be the year that the housing bust officially ends,” he said.
Nationwide, prices have fallen by about 30 percent since the peak in 2006, and Moody's Analytics thinks they could fall another 5 percent or so in 2011. “But improvements in the overall economy will lift the housing market sooner or later, with many buyers who have been sitting on the sidelines finally deciding to take the plunge,” Newman writes. “In a few markets, that already appears to be happening.”
U.S. News says home buyers are tiptoeing back into the market, amid an increasing number of signs that the fifth year of the housing bust might be the last. “Economists are watching closely for an inflection point at which the housing market turns upward for good. But for buyers planning to live in a home for years, precise timing matters less because they also need to take into account the direction of interest rates and their own personal need for housing,” Newman said.
“With flippers and speculators largely out of business, most buyers simply want to know that the home they buy won't plunge in value once they own it. In many U.S. cities, that now looks to be the case,” he adds.
U.S. News points to four reasons that home buyers may be feeling more confident that it's safe to step off the sidelines:
In some markets, homes are now undervalued. According to the Case-Shiller home-price index, overall prices nationwide have fallen 30.3 percent since peaking in 2006. Moody's, for instance, says that homes are undervalued in many cities, based on the ratio of home prices to median income.
Affordability is excellent. Falling prices, plus falling interest rates, have made homes more affordable than they've been in decades. The National Association of Realtors' affordability index, which goes back to 1970, is at the highest level it's ever been. The typical family today needs to spend just 13 percent of its monthly income to pay the mortgage on a median-priced home, compared with nearly 25 percent at the peak of the housing bubble.
Economic factors that affect housing are improving. Most economists believe the recession is over for good, with the risk of a double-dip fading rapidly. Consumers are spending again, and the economy is growing. Big companies have lots of cash and are in a good position to hire once business picks up. A rally in the financial markets is helping many Americans recover some of the wealth they've lost through falling home values. Those trends all support increased higher demand for homes.
The government will continue to support housing. There will likely be continued political debate over Fannie Mae and Freddie Mac, the troubled housing agencies now operating under government control. But despite some calls for a private system to finance housing, it's likely the government will remain a key player in the mortgage market until at least 2013, after the next presidential election. And once policymakers figure out how to replace Fannie and Freddie, it will probably happen slowly, so as not to upset the housing recovery.
While it’s still too early to tell for sure where we are in the recovery, anecdotal reports from our field offices tell us that things are gradually moving in the right direction. Buyers are easing back into the housing market in many Bay Area communities. As we approach the spring buying season it will be interesting to see how this translates into sales. Stay tuned! http://www.cloneyrealestate.com/
Wednesday, January 26, 2011
Marin County Market Update!
http://www.cloneyrealestate.com
Here's what we have seen so far:
Single Family Residence (SFR)
Overall inventory increased from 740 on January 6 to 770 on January 19 and percentage in contract increased from 27.8% to 29.8%. Homes under $1 million did even better with an increase from33.96% in contract to 36.49% while number of listed homes in that price range increased from 480 to 496. Homes in the $1million to $1.99 million range relatively stable at 21.38% in contract while listed units did increase by 11, to 159. Upper-end homes doing somewhat better than previously, with 9 of 44 listed units in contract as of Jan 19, or 20.45%. This compares to 17.39% at last report. Homes over $3 million also enjoying greater sales activity, with 6 of 71 homes on the market in contract (8.45% compared to 4.55% on January 6). YTD sales of SFR's as of January 19 were 38 units, compared to 51 in 2010, or down 25%, and DOM for homes sold during that period were 112, compared to the year-ago figure of 97. Average sold price at $885,616 compared to $1,233,119 in the same period a year ago. This appears to be an inauspicious start to the year but the number of sales is still very low so a "market mix" of lower-priced or less desirable homes can have an unbalancing effect on early-in-the-year statistics. In addition, we will have to remember during the first half of this year that we are comparing to 2010's skewed 1st and 2nd quarter sales resulting from the homebuyer tax credits.
Condo's
Overall inventory increased from 266 on January 6 to 271 on January 19, but the number of units in contract remained static at 94, pulling the percentage in contract down slightly from 35.34% to 34.69%. There was only one condo over $1million in contract of the 10 units on the market on January 19, or 10%, matching the level on January 6 when we last reported. YTD sales of condo's as of January 19 were 16 units, compared to 20 in 2010, or down 20%, and DOM for condo's sold during that period were 126, compared to the year-ago figure of 114. Average sold price at $321,006 compared to $334,841 in the same period a year ago. Please see remarks above under SFR's regarding these statistics which one would hope are not a harbinger of the year ahead!
http://www.cloneyrealestate.com
Here's what we have seen so far:
Single Family Residence (SFR)
Overall inventory increased from 740 on January 6 to 770 on January 19 and percentage in contract increased from 27.8% to 29.8%. Homes under $1 million did even better with an increase from33.96% in contract to 36.49% while number of listed homes in that price range increased from 480 to 496. Homes in the $1million to $1.99 million range relatively stable at 21.38% in contract while listed units did increase by 11, to 159. Upper-end homes doing somewhat better than previously, with 9 of 44 listed units in contract as of Jan 19, or 20.45%. This compares to 17.39% at last report. Homes over $3 million also enjoying greater sales activity, with 6 of 71 homes on the market in contract (8.45% compared to 4.55% on January 6). YTD sales of SFR's as of January 19 were 38 units, compared to 51 in 2010, or down 25%, and DOM for homes sold during that period were 112, compared to the year-ago figure of 97. Average sold price at $885,616 compared to $1,233,119 in the same period a year ago. This appears to be an inauspicious start to the year but the number of sales is still very low so a "market mix" of lower-priced or less desirable homes can have an unbalancing effect on early-in-the-year statistics. In addition, we will have to remember during the first half of this year that we are comparing to 2010's skewed 1st and 2nd quarter sales resulting from the homebuyer tax credits.
Condo's
Overall inventory increased from 266 on January 6 to 271 on January 19, but the number of units in contract remained static at 94, pulling the percentage in contract down slightly from 35.34% to 34.69%. There was only one condo over $1million in contract of the 10 units on the market on January 19, or 10%, matching the level on January 6 when we last reported. YTD sales of condo's as of January 19 were 16 units, compared to 20 in 2010, or down 20%, and DOM for condo's sold during that period were 126, compared to the year-ago figure of 114. Average sold price at $321,006 compared to $334,841 in the same period a year ago. Please see remarks above under SFR's regarding these statistics which one would hope are not a harbinger of the year ahead!
http://www.cloneyrealestate.com
Wednesday, January 12, 2011
Realtors Encouraged by Signs that Economic Recovery
With the holidays behind us and a brand new year underway, Realtors, home sellers and buyers are all wondering what 2011 will bring to the Bay Area housing market. After a choppy 2010 that saw strong activity early in the year and a softening in the second half, Realtors are encouraged that recent improvement in the economy could bode well for the housing market.
The real estate market is so closely aligned with the fate of the overall economy, the stock market and consumer confidence. In general, all three of those economic indicators have been recovering in recent weeks. And this week in particular gave housing market professionals reason for encouragement.
In his first appearance before the new Congress, Fed Chairman Ben Bernanke gave a more upbeat assessment of the economy than he has in the past. "We have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold," the central bank chief told lawmakers.
Bernanke and another senior Fed official, New York Fed President William Dudley, said today that leading indicators for the labor market are pointing to a likely pickup in the pace of employment gains over the course of the year.
At the same time, the financial markets have rallied in recent months. The S&P 500 and the NASDAQ have risen 10% and 12%, respectively, over the past three months. Many Silicon Valley companies continue to report strong sales and profits over the past year. All of this undoubtedly is having a positive impact on consumer confidence.
Finally, this past year’s holiday season provided some welcome news for retailers. U.S. retailers posted the strongest revenue growth since 2006. A Thomson-Reuters index of 28 leading retailers showed sales rose 3.1% at stores open less than a year.
But in all likelihood, the road to recovery will continue to be slow and occasionally bumpy. Don’t be surprised to see extremely upbeat economic numbers one month and a small setback the next.
For example, the Labor Department reported that the nation's economy added 103,000 jobs in December and the unemployment rate dropped to 9.4% last month, its lowest level in 19 months. But the job growth fell short of expectations based on a strengthening economy. And the drop in unemployment was partially due to people dropping out of the labor force.
Nonetheless, despite two steps forward and one back, the overall economy appears to be trending upward. I’m cautiously optimistic the same will be true for our housing market in 2011.
http://www.cloneyrealestate.com
The real estate market is so closely aligned with the fate of the overall economy, the stock market and consumer confidence. In general, all three of those economic indicators have been recovering in recent weeks. And this week in particular gave housing market professionals reason for encouragement.
In his first appearance before the new Congress, Fed Chairman Ben Bernanke gave a more upbeat assessment of the economy than he has in the past. "We have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold," the central bank chief told lawmakers.
Bernanke and another senior Fed official, New York Fed President William Dudley, said today that leading indicators for the labor market are pointing to a likely pickup in the pace of employment gains over the course of the year.
At the same time, the financial markets have rallied in recent months. The S&P 500 and the NASDAQ have risen 10% and 12%, respectively, over the past three months. Many Silicon Valley companies continue to report strong sales and profits over the past year. All of this undoubtedly is having a positive impact on consumer confidence.
Finally, this past year’s holiday season provided some welcome news for retailers. U.S. retailers posted the strongest revenue growth since 2006. A Thomson-Reuters index of 28 leading retailers showed sales rose 3.1% at stores open less than a year.
But in all likelihood, the road to recovery will continue to be slow and occasionally bumpy. Don’t be surprised to see extremely upbeat economic numbers one month and a small setback the next.
For example, the Labor Department reported that the nation's economy added 103,000 jobs in December and the unemployment rate dropped to 9.4% last month, its lowest level in 19 months. But the job growth fell short of expectations based on a strengthening economy. And the drop in unemployment was partially due to people dropping out of the labor force.
Nonetheless, despite two steps forward and one back, the overall economy appears to be trending upward. I’m cautiously optimistic the same will be true for our housing market in 2011.
http://www.cloneyrealestate.com
Friday, October 8, 2010
New Homes in Petaluma!
Lennar homes are in the process of building a brand new subdivision in desirable west Petaluma. Having just sold a property in the subdivision, I know a lot about the process. This home offered four good sized bedrooms, an open kitchen with granite counters, stainless steel appliances and hardwood floors. My clients were happy with buying a new home because with my help, they were able to negotiate a good price on the home and also because they were able to pick some of the finishing touches. Lennar is building 7 unique split level floorplans ranging from 2,396 sqft to 3,376 sqft. Homes range form 3-4 bedrooms and up to 3.5 baths.
If you are wanting a new home, close to desirable downtown, and to be in the Mcnear school district, this is your opportunity. Call Shad Cloney at 415-328-2158 for more information. You can also visit me on the web at http://www.cloneyrealestate.com
Monday, June 28, 2010
Douple Dip?
Double Dip means that real estate values, which have been going down since about 2006, may have another hit coming in the next couple of years.
Now as we all know, supply and demand determine value. So these 2 factors will determine future rises and falls in home prices. Supply and demand vary considerably as you travel around the Bay Area, and throughout California. The likelihood of a declining real estate market in the less desirable areas of California is very real! Lets focus here, on just Marin County.
The Supply Side:
Some areas of Marin experienced little to no new construction in the last decade. With a limited supply of homes, these markets have an advantage. Northern San Rafael, and Novato had a significant amount of new homes built in the last 10 years, and have also seen the most significant declines. Don't believe the press when you hear that foreclosures are slowing down. There are dozens of filings in Marin County every month, in all price ranges.
There are likely hundreds of additional homeowners that have stopped making their mortgage payment and have not been filed upon by their lender, even though they are 6+ months delinquent.
The government, and super rich investors now own controlling interests in many of the banks and mortgage servicing companies. They can regulate when to foreclose on homeowners, when to approve short sales, and when to release foreclosed homes out on the market to be sold. They have an interest in controlling the supply of new listings.
In the last 10 years, the vast majority of houses and condos in San Rafael and Novato were purchased with 20% down or less. Most of these properties have gone down in value 20% or more. If you purchased a home for $600,000 with a loan of $540,000, and it's now worth $500,000, what are the chances that this might not work out in the future?
The Demand Side:
The real estate boom of the late '80's took place while interest rates hovered around 8%-- higher than they are today. So rates don't have near the impact on a rally as employment and consumer confidence. When a higher percentage of prospective home buyers feel more confident that their high paying jobs are safe, that is when demand will increase, and inventory can decrease, resulting in higher home prices.
Consumer confidence and higher employment rates are the keys to turning this around for good.
The price of many million dollar homes in San Rafael and Novato have come down 30%. There is some pretty good evidence that parts of Novato have already gone down 10% this year. The cause is limited demand. Even Sausalito, which has nearly a one-year supply of homes for sale over $1,000,000, is likely to have another round of equity loss.
The conclusion:
Marin County has done better than most of California, but for the next couple of years is still at risk for more equity loss in some areas.
Now as we all know, supply and demand determine value. So these 2 factors will determine future rises and falls in home prices. Supply and demand vary considerably as you travel around the Bay Area, and throughout California. The likelihood of a declining real estate market in the less desirable areas of California is very real! Lets focus here, on just Marin County.
The Supply Side:
Some areas of Marin experienced little to no new construction in the last decade. With a limited supply of homes, these markets have an advantage. Northern San Rafael, and Novato had a significant amount of new homes built in the last 10 years, and have also seen the most significant declines. Don't believe the press when you hear that foreclosures are slowing down. There are dozens of filings in Marin County every month, in all price ranges.
There are likely hundreds of additional homeowners that have stopped making their mortgage payment and have not been filed upon by their lender, even though they are 6+ months delinquent.
The government, and super rich investors now own controlling interests in many of the banks and mortgage servicing companies. They can regulate when to foreclose on homeowners, when to approve short sales, and when to release foreclosed homes out on the market to be sold. They have an interest in controlling the supply of new listings.
In the last 10 years, the vast majority of houses and condos in San Rafael and Novato were purchased with 20% down or less. Most of these properties have gone down in value 20% or more. If you purchased a home for $600,000 with a loan of $540,000, and it's now worth $500,000, what are the chances that this might not work out in the future?
The Demand Side:
The real estate boom of the late '80's took place while interest rates hovered around 8%-- higher than they are today. So rates don't have near the impact on a rally as employment and consumer confidence. When a higher percentage of prospective home buyers feel more confident that their high paying jobs are safe, that is when demand will increase, and inventory can decrease, resulting in higher home prices.
Consumer confidence and higher employment rates are the keys to turning this around for good.
The price of many million dollar homes in San Rafael and Novato have come down 30%. There is some pretty good evidence that parts of Novato have already gone down 10% this year. The cause is limited demand. Even Sausalito, which has nearly a one-year supply of homes for sale over $1,000,000, is likely to have another round of equity loss.
The conclusion:
Marin County has done better than most of California, but for the next couple of years is still at risk for more equity loss in some areas.
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